Book Callback

Cash flow management for law firms: How to secure your law firm’s cash flow ahead of a difficult 12 months

In the wake of the Covid-19 pandemic, and with the spectre of a global recession looming, finances are a growing concern for law firms large and small. The Solicitors Regulation Authority reports that a particular set of circumstances – including the pressure to repay the government’s Covid support packages and a lack of appetite to provide additional funding by high street banks this has led to a recent spike in law firms declaring some financial difficulties. 

While there is little that can be done to mitigate the recession or the cost-of-living crisis, the good news is that with careful financial planning, cash flow management and law firm funding options, it will be possible for many law firms to ride the storm of the next 12 months whilst also spreading liabilities away from their primary bank. 

Here we’ll explore the art of financial planning for law firms, outlining your options for managing cash flow and budgets for the coming year.

 

Cash flow management on laptop

 

Financial planning for lawyers: all you need to know

Law firm financial management is a requirement under the SRA Standards and Regulations 2019. It’s your responsibility to monitor your financial situation and business viability, which includes identifying financial risks. Of course, carrying out this duty will also help you to keep your law firm credit in the black and secure your future.

  • Law firm budgeting is an essential component of financial management. It should include all of your predicted expenses, including projections of seasonal spending. This will help you when managing cash flow.
  • Your financial plan will set out how much income you need to bring in, set against your law firm expenses. You can then work towards monthly revenue targets, which will help you to ensure that your firm remains profitable.
  • Financial projections are a realistic estimate of the income you are likely to achieve, based on how much you are currently charging, and how much work you predict that you will be able to take on.
  • Even if you are on target to make a profit, cash flow can often be an issue for law firms. If you are needing to spend beyond your means during certain peak periods, you will need to find a sustainable way to fund this.

 

tall bank buildings

 

Cash flow management for law firms

Cash flow comes down to having enough money in the pot to meet all of your expenses. The trouble comes when the money doesn’t come in at the right time to be paid out again, even though on paper you should be able to afford to meet all your costs. Law firm cash flow issues may occur if you don’t get paid until a case is over, or if several expenses all come in at once, such as staff salaries, VAT and corporation tax. 

One of the most popular forms of cash flow management for law firms is to take advantage of finance options. Taking out a short term business loan, such as a VAT loan to cover the cost of your expenses can be the easiest and most cost-effective approach to managing cash flow. 

acorn business finance

 

Law firm finance: options to improve your cash flow

There are a number of choices when it comes to law firm finance.

  • VAT loans are designed to cover the cost of this quarterly expense. This can help to free up the cash flow within your law firm.
  • Other business loans can help you to spread the cost of different expenses such as practising certificates, professional indemnity insurance and more.

 

Find out more

For more information about VAT loans and business loans from Acorn Business Finance, contact us on +44 (0) 1242 395507 or email hello@acornbusinessfinance.co.uk 

Alternatively,  you can read more about the other business loans and products we offer.

Nicki was very helpful and kept us up to date with everything - even when she had time off she made sure we were updated. Whenever there was a query she got to it quickly and helped us understand the issue so we could answer and solve it straight away. It became a very simple process so we could focus on our business.
Very helpful and kept up to date with everything
Stuart was quick to understand our requirements and was able to recommend a cost-effective solution. The process was professional and efficient from start to finish. Each stage was explained thoroughly and our documents checked by the team, so we could get things right first time - we would not hesitate to go back to Acorn Business Finance for any future requirements.
A really positive experience
5 stars from start to finish. Stuart and his team were fantastic!
5 stars from start to finish
Stuart at Acorn was superb. Understood our fully requirements, engaged with us pro-actively throughout. Could not have been more helpful. Organised all the funding requirements we needed at excellent rates. Could not recommend enough.
Engaged with us pro-actively throughout
All the team have been extremely helpful and kept me in the loop with progress reports as we have gone along. I would definitely recommend Stuart and Cathy for their helpful attitude, nothing has been too much trouble during a time that has been stressful for our business.
Taken the stress away
Amazingly quick to get the deal done from start to finish, and to get the money into the bank. A breath of fresh air and the wonder why everyone else can't work like this. Thoroughly recommended.
Amazingly quick
I have dealt with Stuart and his team at Acorn Finance for a number of years now and they are very efficient, always keep you updated, and you receive a personal service. They understand our business needs. The CBILS Loan from initial enquiry to funds in the bank less than a week. I would highly recommend them.
Speedy Personable Service - Highly Recommend
Truly fantastic and dependable service. In such turbulent times and with the criteria for meeting CBILS loans incredibly high, having a dependable broker that is willing to spend the time to truly understand your business needs as well as having a deep-rooted understanding of ever-changing requirements from such a vast array of providers is invaluable. Highly recommended.
Truly fantastic and dependable service
Trustpilot

Get in touch

To discuss financing for your business, contact us either by phone 01242 395 507, email hello@acornbusinessfinance.co.uk or book a callback.

Please note, calls may be recorded for training and quality purposes.

  • +44 (0) 1242 395507
  • hello@acornbusinessfinance.co.uk
  • Suite 1.27, Clockwise Offices, Festival House, Jessop Avenue, Cheltenham, GL50 3SH
Linkedin Instagram

Acorn Business Finance strives to provide clients with the highest level of service. If you feel that our service fails to meet your requirements and you would like report a complaint, get in touch via hello@acornbusinessfinance.co.uk

Acorn Business Finance is the trading name of SJT Corporate Finance Limited. SJT Corporate Finance is registered in England and Wales, number 10919713. Registered office, Festival House, Jessop Avenue, Cheltenham GL50 3SH. SJT Corporate Finance Limited is authorised and regulated by the Financial Conduct Authority, reference number 822913. ICO registration ZA301050 and you can check via www.ico.org.uk.

We are a credit broker, not a lender. We work with a panel of funders to find a potentially suitable arrangement for your consideration.

We will receive commission from these funders, different funders pay different amounts depending on their commission model. For transparency we normally work with the following commission models – a percentage of the amount you borrow. Further details of the commission model, calculation and amount will be disclosed to you throughout your customer journey.

Eddie

Eddie

Eddie brings a wealth of experience and knowledge from the finance sector.
Since building up and successfully selling on his own vehicle leasing brokerage, he joined Acorn Business Finance 5 years ago as a consultant covering the North of the country. Based in South Cheshire, he is ideally located to assist SME clients
around the whole area. 

He enjoys building long term relationships with clients and helping them achieve their targets by providing creative funding solutions and watching their businesses grow. Outside of work Eddie enjoys escaping to North Wales to get wet and cold up various mountains, sampling some good food and beer once he gets down again, and spending time with his family – mainly chasing his 2 young sons around.