After capturing fee entries, by far the greatest number of transactions captured into legal practice management systems are bank account entries.
Capturing bank transactions and reconciling bank accounts (and law firms can have large numbers of these) to the bank statement can be a long and tedious process. Some medium size law firms can have up to two or three staff that only process bank transactions and reconcile bank accounts – every day, all day! That is equivalent to over 500 hours/month. Even in a small or solo practitioner firm bank transactions and reconciliations will take up more than 90% of a bookkeeper’s hours.
Most legal practice management systems allow bank statements to be imported, thereby reducing the volume of raw data capture, however, all the imported entries still need to be allocated – either to an invoice or a matter or a ledger account – and then reconciled back to the statement they were imported from. So there is still a significant amount of work to be done, even though the bank statements have been imported.
We at Drive Revenue felt there was a better way, a more efficient way, which reduces the time accounting staff spend on tedious data capture and frees them up to focus on tasks that actually make the firm money. And that way is to use AI to do most of the work for you.
When bank statements are imported in any of the Drive Revenue solutions, the artificial intelligence (AI) engine automatically matches bank entries to their appropriate documents or G/L accounts. Invoices (either receipts from clients or payments to suppliers) are matched on reference and amount, and items such as debit orders, bank charges, LPFF Levy and the like are allocated based on learning from historic allocations.
Reduced Costs, Improved Accuracy
What does this mean for law firms? With most of the grunt work taken care of, law firm accounting staff, whether in-house or outsourced, get more time to analyze the practice, or work on other areas that will add more value to the firm.
Since the release of the AI engine a few months back, clients are reporting that an average of 50 – 60% of transactions are being auto allocated (and up to 100% with small process tweaks).
The Bank Statement Import function also marks all imported entries as reconciled, further reducing the effort required to balance so many bank accounts.
This means that at least half of the time that bookkeepers and accountants spend processing bank account transactions and reconciling them is saved providing law firms with the opportunity to improve their accounting function and save costs in doing so.
In summary, the benefits of the implementation of this technology in the solutions translate into:
- more accurate and faster capture and reconciling of bank accounts;
- saved processing hours and saved costs; and
- more time for bookkeeping and accounting staff can focus on the performance of the practice rather than just keeping processing up to date.
Drive Revenue is committed to fundamentally improving the efficiency and profitability of law firms and the AI engine is just one of the innovative offerings to our enterprise grade practice management solutions which are affordable for small practices and robust, stable and comprehensive enough for larger practices.