The legal cashiering edit: utilising people, processes and technology for compliance
Legal cashiers perform the most important back-office role in any law practice. The criticality of keeping your accounts pristine and compliant cannot (and should not) be overstated.
Stories proliferate on law firms making grave legal accounting errors and facing the wrath of industry regulators, for example two claims firms being closed down in Liverpool, a solicitor struck off for having client pay money into his personal account, a specialist sports firm fined £36k for accounts misuse, an office manager banned for propping up his business with client money, to name a few headlines from recent weeks alone (source: Legal Futures).
There’s an alarmingly common thread running through these news articles, this being legal cashiers or those performing legal cashiering duties making mistakes – accidentally or deliberately. In the vast majority of cases, accounts breaches are entirely intentional. They’re entirely avoidable too.
A series of internally directed queries
To improve your practice’s accounting procedures and meet regulatory obligations, ask yourself the following questions…
#1: Have I hired the right staff in key accounts-related jobs?
There are several strands to this element – skills, experience, qualifications and trustworthiness.
To clarify, individuals responsible for your business’s cashiering should possess essential skillsets spanning double entry bookkeeping, client and office accounts, SRA Accounts Rules (or equivalent guidelines), banking and reconciliations, internal and external reporting, annual audits and inspections, VAT returns, invoicing and credit control, and proficiency with legal accounting software.
In terms of experience, your recruitment exercises should hone in on candidates who’ve spent sufficient time bookkeeping in a legal setting, with knowledge of solicitors’ accounting rules in various jurisdictions, as well as awareness of wider accounts and anti-money laundering regulations and requirements.
Qualifications to look out for are those pertinent to law, finance and legal cashiering, ideally accreditations from the Institute of Legal Finance & Management (ILFM), Chartered Institute of Legal Executives (CILEX) or similar, however, these certifications can be gained on the job. It’s a bespoke career path and people may not arrive in full possession of requisite attributes.
As you’re placing your finances in this person’s ministration, seek reliable applicants with a strong track record and first-rate recommendations. Consider the not-insignificant sums of money held in your office and client accounts. These are monies you’re mandated to safeguard. The pressing need to appoint someone who’s dependable with moral standards and a clean history is absolutely crucial.
#2: Do I have the proper software security permissions?
The fact you’ll have software to manage your accounts is a given. Echoing the earlier hint about staff being the weakest link in your financial protection armoury, are you maximising the security functionality in your legal accounting software as an extra deterrent against fraud?
The slightest chink in your application defences is all it takes for a deviant employee to obtain funds from your bank illegally. You’d be surprised (and shocked) by how easy it can be for money to go astray. It doesn’t have to be this way.
Review your software features which introduce greater conservation measures. This could be anything from anti-money laundering reports during new client onboarding, to proof of bank details when submitting payment requests, to setting up authorisation levels and cross-referencing checks on particular accounting activities – all of which combine to create boundaries and stop corruption from happening.
#3: Am I investing in ongoing staff training and regular software audits?
Even with the best employees in situ and optimal software configuration in place, make it your mission not to simply sit on your laurels thereafter. It’s a constant work in progress necessitating training (of your teams) and tweaks (to your software) for ultimate financial control always.
It’s worth noting how third-party trainers and consultants such as InQuo can assist hugely by enabling you to refocus on the human factor, realign processes and harness the power of technology for robust legal accounting outcomes.
At InQuo, we offer services ranging from cashier mentoring and financial health checks, to super user training and workflow design, plus everything in between. Browse our extensive service options at www.inquo.co.uk/services.
We’re recommended by law firms globally for overcoming accounting challenges and introducing mechanisms to recover from messes in the present day while simultaneously averting issues arising in the future.
A shout out to InQuo’s credentials
If you’re in any doubt about our team’s abilities, we’d like to highlight our respected reputation fuelled by acclaimed competences in the field of legal accounting. These begin at board level with our chief executive officer Nicola Moore-Miller being a chartered accountant by trade and having 20+ years of experience in the law sector, and filter down to our multiple cashiering experts and trouble-shooters whose SRA Accounts Rules know-how is truly exceptional.
For clients, this is reassurance that their accounting function is healthy and secure – thanks to InQuo’s valuable input from a training and consultancy perspective. Access client stories to learn how businesses the same as yours have used our services for accounts-themed projects at www.inquo.co.uk/client-testimonials.
A final word about cashiering and compliance
In conclusion, it’s imperative to recognise your accounts team as the integral element of the smooth financial running of your law office, with techniques and systems assuming close second. Employ carefully, compose processes prudently and configure applications thoughtfully – and invest in them continually by tapping into training and consultancy support from the likes of InQuo.
By doing so, you’ll never find yourself in the unfortunate situation of a staff member abusing his/her position to steal money and your business subjected to regulatory investigation with ensuing sanctions and punishments, the result of which could force your law firm to shut down forever.
For further guidance on this urgent-and-critical topic, visit our earlier blogs titled ‘SRA Accounts Rules compliance: A how-to guide’ and ‘Master client trust accounting. Avoid violations. Your license is at stake’ (amongst others) at www.inquo.co.uk/blog.