Sunday, April 29, 2012

PCLaw and an Error Correction Riddle


Every once in a while I come into contact with hands on lawyers, who are very knowledgeable of bookkeeping procedures. The reason they are calling me is because their previous bookkeeper left, or they have been struggling to do the work themselves, and things are not balancing.

The Setup

With deference to the LSUC, Leslie Lawyer has been in practice for 15 years, and opened her own firm 5 years ago. The rate she bills out at is $350 per hour. She has an intimate knowledge of all of her clients and matters. This is to be expected; after all, it is her business we are talking about. She has a good understanding of basic bookkeeping, including bank reconciliations. Her working knowledge of PCLaw is limited to the minimal on-the-job training she received to complete daily tasks. She has received no extra training, and has no advanced knowledge of error correction procedures. She has not been able to balance her books, but if she set aside the time, she could probably work through all of the problems. She does not know how to correct the errors, but could do some work-around adjusting entries to balance. The work-arounds’ may not be to LSUC standards, and even with her intimate knowledge of individual matters, it will still take her 30 hours to finish this project.

Bobbie Bookkeeper is a self-employed bookkeeper who works for many different lawyers. She charges $35 per hour. She has received extra PCLaw training, and has advanced knowledge of error correction procedures. She has no knowledge of Leslie’s clients or the individual matters. She will need to ask lots of questions to gain the required information, but these could be directed to a member of Leslie’s staff. She has reviewed the status of Leslie’s books and advised that properly removing the past 5 years’ of errors and balancing the books to LSUC standards could take up to 100 hours of her time.

The Riddle

How much money does Leslie lose by doing the work herself?

As always, I invite your comments and suggestions for future post topics. Next Week – PCLaw and Work-In-Progress Disbursements From Trust.


Sunday, April 22, 2012

PCLaw and Excel

When you run reports in PCLaw, the normal practice is to print them and/or save them. The report toolbar at the top also displays an icon for Excel, which allows you to convert the static report information into a spreadsheet.

PCLaw reports already have a lot of variables available to you, especially if you select the advanced options. But exporting the report into a spreadsheet allows you to manipulate the data in ways limited only by your imagination.

To get the most out of this feature, you need to have a good understanding of how to write formulas. The “Help” in Excel is very good, and there are many online forums that can assist you even further. The idea is to develop standard formulas for the results you want. You can then copy this formula from your old spreadsheet into a new one, thereby instantly obtaining the new information that you want.

I use these worksheets often for error correction. If you want to know what is different on two reports, export both of them into spreadsheets. I usually delete the columns I do not need, keeping only those columns will help me.

For example, try comparing the trust bank journal with the trust bank general ledger. Doing a True or False comparison with the “Entries” numbers in both reports will quickly locate the missing or extra entry. You can also sort the entries from largest to smallest, thereby allowing you to quickly locate a number that only appears on only one report.

As always, I invite your comments and suggestions for future post topics. Next Week – PCLaw and an Error Correction Riddle.


Sunday, April 15, 2012

Year-end Review and PCLaw

Last week, our concern was getting your books cleaned-up for your accountant.  Typically, you will want to meet with you accountant after your taxes have been prepared. After reviewing your financials, your accountant will be in a much better position to offer you advice. However, for you to get the best advice, you need to come to the meeting fully prepared.

Print off a copy of your financials. Make a list of any questions you have. Is there any specific area you need advice on? Do you have an issue that you are concerned about?
The goal is to seek ways to reduce your expenses and increase your sales, and thereby increase your net income. Year-end is also a time to review your fee structure. Rising costs can mean that you need to raise your hourly rate just to maintain the same income as last year.

Besides the obvious financial statements, PCLaw can also generate other useful reports to help you improve your business. By selecting different options on standard reports, you can learn a great deal. For example:

You can run you billing fees journal and select to sort matters by type of law. This type of information is useful for planning your marketing efforts. Do you need to increase your marketing in some areas where you want to grow? Did your marketing decisions from last year pay off in increased billings in the area of law you were targeting with your advertising dollars?

Run an Client Costs journal report, on the “Other” tab select the expense code for photocopies. Typically, your fax machine is now part of an all-in-one printer, so you need to add this result to the photocopies amount. Compare this with your photocopy expenses for the machine, toner, paper, etc. Do you need to adjust the amount you are charging?

Can you reduce your telephone expenses by bundling into one invoice?

Are your staffing levels appropriate to the volume of work you do? Virtual assistants can provide additional support without the overhead of an on-site employee. It can be as simple as differentiating work that has to be done in the office.  Filing, faxing, photocopying, etc. has to be done where the documents are physically present. Documents – letters, pleadings, etc. – can be typed anywhere.

These are just a few of suggestions. The point is, all the data has already been entered into your PCLaw program, There is a wealth of information contained within this data which is freely available to you. Your bookkeeper can assist you with mining this data and running comparative reports.

As always, I invite your comments and suggestions for future post topics. Next Week – PCLaw and Excel.


Sunday, April 8, 2012

Year-end Clean-up in PCLaw


It is tax season – time to get your financial statements cleaned-up, so that you can forward them to your accountant.

First, make sure all of your reconciliations have been completed. Your December bank accounts should have already be reconciled by January 25th.

Run “Verify Data Integrity”. This should correct most hidden or imbalance errors.

Then run a G/L Reconciliation report, and correct any errors found on here.

Your accountant can offer you great advise, but you are the person with the most knowledge of your own business. Prepare and review draft financial statements. Look for:

- Items posted in the wrong G/L accounts.
- Multiple accounts of a similar nature - consolidate into one?
- Are there negative expense or income accounts?
- Missing any purchases made with petty cash or credit card?

Now that everything has been entered, and you have confirmed your ledgers have no errors, you can run your HST report and remit it or post it as a payable.

You are now ready to forward your financials to your accountant.

You can close out any open months, up to and including November. Now is also a good time to archive matters that have been completed.

While your accountant is working, you have time to take a second look at your financials - Next week’s topic.

As always, I invite your comments and suggestions for future post topics.


Sunday, April 1, 2012

Bank Errors and PCLaw


In many cases, my clients retained my services after their previous bookkeeper changed careers, moved, or retired. As such, I get to see the work product of many other bookkeepers.

It has come to my attention that a lot of bookkeepers are misusing the bank error feature, when doing the monthly bank reconciliations. In many instances, the bank error feature was used to record bookkeeping errors. The bank errors feature should only be used to record errors actually made by the teller or bank, and nothing else.

Obviously, no one likes to admit they have made a mistake, but we are all human beings, and therefore fallible.

PCLaw has build in checks and balances to prevent things like overdrawn client trust ledgers while writing trust cheques. Bookkeeping errors do occur more often when using handwritten cheques, so I would encourage the printing of your cheques if possible. With handwritten cheques, the entry is often made after the fact, and only then is the error revealed.

When you make a mistake, resist the urge to record it as a bank error. Instead, record the events as they actually occurred. Then enter a correcting entry. That way, the transactions appear on the bank journal and other reports, making it easy to monitor outstanding issues. Entering the mistake as a bank error means that it is not searchable, and therefore much more likely to be forgotten until the next month’s bank reconciliation.

For situations involving overdrawn client trust ledgers, PCLaw should prevent you from entering the transaction. But, since the ledger is overdrawn, you will need to return some funds to trust, to at least bring the ledger back to a zero balance. Simply enter the required general to trust transfer first, then you can enter the mistaken transaction.

As always, I invite your comments and suggestions for future post topics. Next week – Year-end Clean-up in PCLaw.