Actionstep offers built-in accounting to users on our Practice Pro + Accounting plan. This article covers functionality only available with that option.
When it comes to Accounting there are a number of different functions and tools you have to use to keep your business financially viable. In this article, we will try to explain what you need to do as a concept to do good accounting and direct you to articles which will explain how to do them in Actionstep.
This is a basic introduction. We won't cover anything too complex.
Types of accounting transactions
Your day to day business is making sure you deal with the money that comes in and the money that goes out. For the most part, these are controlled through invoices. Either the invoices you send to clients to get them to pay you or the invoices that vendors or suppliers send to you to pay.
In Actionstep we call the bills you send to others 'Billing' - the creation of, sending, managing and paying the bills that you send to your client. It is a core function for law firms. So important, that we separate it from day to day accounting.
Please see our section on Billing for all details on how to handle the bills you send to customers.
Supplier invoices / Vendor invoices
Dealing with the invoices that other people send you to pay is dealing with 'Vendor invoices' or'Supplier invoices'. Anytime you get a bill to pay, you should enter it as a Supplier invoice into Actionstep. Once you are ready to, you can process a payment against it.
Please see our section on Supplier Invoices / Vendor invoices for all details on how to handle the Bills you get given to pay.
Withdrawals and Deposits
Some of the accounting transactions you enter will not be for a bill you send to a client or a payment for an expense you got an invoice for. Sometimes you will have incidental transactions that you never gave or received an invoice for. These don't happen very often for money coming into your bank but they are more common for money going out.
In these instances, you want to create either a Firm deposit for money coming into your bank or a Firm withdrawal for money going out of your bank account
Transfers between bank accounts
Sometimes you need to transfer money from one bank account to another or from a bank account to a credit card. If you have a trust bank account, transfers between your different trust bank accounts and transfers between your trust bank accounts and your business bank accounts are handled under Trust Accounting section.
If you are not using trust you can use our Transfer funds function.
Please see our section on Transfer funds for all details on how to transfer funds from one bank account or credit card to another bank account or credit card.
Occasionally, you might need to make some corrections to your accounts that do not affect your bank account. This is not an everyday transaction but is normally something your accountant gets you to do after running a month-end or year-end audit.
These are called General Journal Entries and they take money from one or many non-bank accounts on your General Ledger and put it under another non-bank account on your General Ledger.
Accounting items related to the transaction
As you create accounting transactions, you will have some tools to help you monitor and control certain types of transactions. These are options such as managing the cash and checks that you receive and have to bank with a deposit slip or managing the checks that you print and send to others.
Deposit slips are what you take to the bank and hand over when depositing cash or checks. They help the bank and you process the transaction faster. In Actionstep, you can create a deposit slip that will list the relevant transactions that you want to bank.
Please see our article on Deposit slips for how to create these.
When you make a payment it can be made in a number of different ways (cash, check, transfer, etc). To speed up processing, many banks will offer the ability to for a firm to print details of a payment onto a check. These are called printed checks.
As you enter a payment, Actionstep will allow you to set it as a printed check. When you do this, you can then print this and any other similar transactions onto your check paper.
Please see our section on Printed checks for more details on how to set up your system to use printed checks, how to generate and print those checks and how to void or manage your checks.
Checking your books
You will often want to check that everything is in good order and good accounting practice would be to do this at least once a month.
To ensure you have accounted for everything, you should run a bank reconciliation at least once a month. A bank reconciliation checks that the transactions in your bank have all been entered into Actionstep.
Please see our article on bank reconciliations for details.
There is also a recommended process you can take to ensure your reporting and accounting is complete.
Please see our article on Month end process.