Accounting for Legal Practices

Accounting for Legal Practices 2017-10-11T10:31:18+00:00
If you operate a legal practice you will have a range of basic accounting needs that Hoffman Kelly specialise in.  These needs include:
  • Preparation of financial statements
  • Preparation and lodgement of income tax returns
  • Preparation and lodgement of BAS
  • External Examination (audit) of trust accounts

All accountants should be able to assist with these requirements, however as director of our legal practice team, Tom Aitkenhead has put together many legal-centred programs and his team are experts in offering more advanced services to legal firms.

SETTING UP A LEGAL PRACTICE

When establishing a practice there are more things to consider than basic asset protection and income tax minimisation when choosing your structure.  Getting it right from the start means avoiding a restructure later and takes into account possible future events such as bringing in new owners and ensuring yours is an attractive practice to purchase.  The structure also must allow you to meet the ATO’s professional firm benchmarks to avoid costly ATO reviews and audits that can result from not being assessed as low risk.

RESTRUCTURING A LEGAL PRACTICE

Often when we review an established practice the structure is not working properly from all angles and the principals are:

  • paying too much tax
  • unnecessarily exposing their assets to creditors;
  • attracting unwanted ATO attention by failing to meet the new ATO benchmark guidelines; OR
  • holding their business back by not having a structure that allows the proper reward or advancement of their key staff or a partial sale by the current owners.

After consideration of all relevant aspects it might be time for a restructure and Hoffman Kelly can hold-your-hand to navigate the CGT, GST, duty and income tax consequences of such a change to allow you to move forward with an optimal structure.

VALUING OR SELLING A LEGAL PRACTICE

A legal practice is a business like any other, but we find that practice owners often have little idea of what their practice’s value is, or how to improve it.  Hoffman Kelly helps owners to understand valuation methodology and where the current value likely stands.  We can also assist to improve profitability and with your business succession planning so that you achieve proper value for the firm you’ve built.

Whether you are thinking about starting your own practice or have been running an established firm for years, Hoffman Kelly’s team have the knowledge, practical expertise and the desire to be exactly what is needed in a modern accountant.

Contact us now to see how we can help?

We are pleased to offer an initial (no obligation) consultation in which we review existing structures & processes and provide recommendations to enhance and optimise tax outcomes, asset protection

book now