Four ways law firms can get ahead this EOFY

With the end of the financial year (EOFY) less than two weeks away, now is the time to get your law firm prepared. Navigating EOFY during a pandemic poses its own unique considerations, many of which you may not have explored yet. Before July 1 rolls around, consider the following four ways that you and your firm can get ahead.

1. Understand your obligations as a business and an individual

If you’re a sole practitioner or the owner of your firm, it’s important to remember that while you’re a lawyer or conveyancer, you’re also a business owner. As a business owner, it’s important to be aware of your obligations at tax time. With a range of pandemic-specific allowances recently introduced by the Australian government to alleviate the financial burden of working from home, ensuring you’re aware of what you can and cannot claim on your tax return has never been more important. The Australian Tax Office has a range of resources available to help you track expenses and make deductions if you’ve been working from home during COVD-19. You can find this information here.

2. Refresh your understanding of your trust accounting obligations

The EOFY is a busy time, particularly for lawyers. Not only are you required to meet your obligations as a business owner, but as a lawyer too. A key aspect of this responsibility involves meeting your trust accounting obligations. Before the financial year is over, consider using the remaining time to ensure your trust account is in order, all transactions are properly accounted for and any discrepancies are promptly rectified. Doing this now will alleviate any headaches when it comes to issuing trust statements for your clients after 30 June as required in most Australian jurisdictions.

3. Ensure you're familiar with the EOFY trust accounting process

If you’ve never conducted the EOFY process in LEAP, or simply want to refresh your skills in this area, use the remaining few days of the financial year to get yourself up to speed. Doing this now will allow you to work through the process after June 30 without any roadblocks.

The EOFY process in LEAP is straightforward and involves three key tasks. These are reconciling your trust account, running the trust end of month (EOM) reports and printing trust account statements for all clients at 30 June if required to do so in your jurisdiction. Once these three tasks have been completed, you’ll be able to continue entering transactions for the new financial year.

If you’d prefer some guidance throughout this process, refer to the dedicated LEAP Community article, ‘End of Financial Year Procedure - Trust Accounting’. This article guides you through each of the three key tasks with step by step instructions. Alternatively, take advantage of your complimentary access to LEAP University, included with your LEAP subscription. LEAP University is an on-demand, online training portal that allows you to learn more about LEAP at a time and place that suits you. Simply log in to LEAP University with your existing LEAP credentials to get started.

New to LEAP University is the dedicated LEAP EOFY Procedures course. This complimentary course covers everything you need to help prepare your firm for the new financial year. Covering both office and trust accounting, the dedicated EOFY course includes videos, activities and quizzes covering:

• Office accounting procedures

• Trust reconciliation

• Trust end of month reporting

• Printing trust statements

4. Plan for the upcoming financial year

While it’s important to ensure you end this financial year having completed the correct procedures, it’s just as important to prepare your firm for the upcoming new financial year. This is something often overlooked by law firms of all sizes.

With many firms facing new or altered operating models owing to COVID-19, it’s imperative to factor these considerations into your firm’s financial plan for the 2020-2021 financial year. Take some time to analyse your firm’s financial performance in 2019-2020 to guide your plan.

Will your staff be working from home more? Will your overheads be reduced? Have your fees changed? Could you benefit from self-service technology? Do you need to focus on digital marketing? These are the types of questions you should ask yourself and factor into your firm’s financial plan for the upcoming financial year.

While many Australian states still have a number of COVID-19 related restrictions in place, now is the perfect opportunity to use any additional time you may have to prepare yourself for the end of the financial year. Consider implementing these four strategies to alleviate any stress or roadblocks you may face once June 30 passes.