Cash. All businesses need it, and the pressures on this precious resource are particularly weighty for legal firms, who have: (more…)
The SRA has published its response to the June 2016 “Looking to the Future: Accounts Rules Review” consultation. This is the third and final phase of the review of the Accounts Rules. Included within the response documents is a new draft of the Solicitors Accounts Rules 2018.
The SRA have certainly simplified and shortened the rules. Whilst the rules currently in force are some forty pages long, this new draft contains 13 rules and is just 7 pages long! (more…)
Hot on the heels of the Budget, the questions being asked by many partners at solicitor practices across the country are, “Should we consider incorporation to obtain limitation to liability or not?” and, “What are the consequences now?”
The majority of the legal practices that we see are predominantly partnerships and partners are looking at how to structure their practice in order to attract and obtain potential future partners. (more…)
Cybercrimes and scams include: (more…)
A common business structure for a professional practice is a traditional partnership or an LLP. This is the case even though using a company typically reduces the tax payable on the income of the practice.
The 2017 Spring Budget has brought in increases to the rate of Class 4 National insurance contributions (NIC’s) from 9% to 10% from April 2018 and then to 11% from April 2019, which swings the pendulum further towards incorporation. This is balanced to some extent by the reduction in the 0% dividend allowance from £5,000 to £2,000, meaning that more tax will be payable on dividends from a company. (more…)
We have previously looked at the roles for accountants in dispute resolution and forensic accounting is another area where accountants can provide expert support and advice.
Forensic accounting is the investigative process by which financial information is gathered, analysed and presented in a clear, unambiguous way, with conclusions as to events and outcomes. It is similar to a due diligence process, although the scope is often narrowed to a particular area of concern, which is investigated in much more detail, rather than a broader investigation into areas of potential risk. Common situations for engaging a forensic accountant include suspected theft or fraud, insurance claims for loss of earnings e.g. from a fire, or the losses incurred with the breach of a non-compete clause.
The new rules are far more generous than many thought would be the case and offer some new planning opportunities.
Under the new rules, the key factor is the age at which a member dies.
A recent consultation by the Solicitors Regulation Authority (SRA) proposes a complete revamp of the Rules. The current Accounts Rules have not notably changed for many years and can be difficult to fully understand. The SRA have recognised this and have reported that ‘of the approximately 9000 firms that hold client money, in the period June 2012 to December 2013, over 50% received a qualified accountant’s report but only 179 were referred to consideration for further regulatory action’.
This would suggest that many of the breaches reported on in the past have been technical in nature, rather than breaches which signified a risk to client money.
Strong and sustainable cash flow is essential for any successful business regardless of size. Poor cash flow management continues to be one of the most common reasons for business failure, regardless of how productive the business is. Strong billing procedures can be a major contributing factor to maintaining financial stability. Here are some changes you could make to your firm’s systems and behaviours to help improve cash flow and keep control of your finances.