Setting up Business Central for law firms that bill by the matter

How Business Central for law firms models matters

A matter becomes a project in Business Central. It links to the client as the bill-to customer. Project tasks split the work into phases such as advice, drafting, discovery and hearings. So a fee earner books time to the right stage. A partner can also watch a fixed fee being used up.

Practice area, office and responsible partner sit on the project as dimensions. So every posted hour and invoice carries them, and nobody types a code. The firm then sees profit by practice group and by partner. It comes from the same ledger that produces the statutory accounts.

Time capture that fee earners actually complete

Each lawyer and paralegal is a resource with a cost and a billing rate. Rates can differ by client or by matter where an engagement letter says so. Fee earners fill in time sheets in the browser or the mobile app. They submit them at period end. The supervising partner then approves them.

Unbilled time is only useful if it is complete. So we keep the matter list on each time sheet short and relevant. We add a Power Automate reminder for missing entries. We also give partners a view of unsubmitted time. Lost time is the quietest leak in a legal practice.

Billing and work in progress with Business Central for law firms

Posted time and disbursements sit on the matter as billable lines. They wait until the billing partner decides what goes on the invoice. The partner can write lines down, hold them for the next bill or combine them. Then the sales invoice comes from the project. So the amounts match what the team recorded.

Work in progress is calculated for each matter by the method the firm chooses. Posting it to the ledger shows unbilled value on the balance sheet at month end. You enter court fees, expert costs and travel as purchase lines against the matter. So the firm recovers them and does not absorb them.

Where Business Central for law firms needs an add-on

Client trust money has rules that the standard product does not enforce alone. You need a separate ledger for each client and no overdrawn balance. You also need to reconcile the trust bank account to those ledgers. Firms that hold client funds are usually better served by a legal accounting add-on than by a workaround.

Conflict checks, court deadline calendars and document assembly belong in a practice management tool. They do not belong in the accounting system. We help you decide which tool owns which record. Then we connect the two. So a matter opened in one place appears in the other without being keyed again.

The numbers partners want at month end

Partners rarely ask for a trial balance. They ask what was billed, what was collected and what is still unbilled. They also ask who is behind on time. We build those views in Power BI and in Business Central financial reports, filtered by practice area. So the monthly meeting starts from one set of figures.

Collections matter as much as billing. Aged receivables by responsible partner help here. So do reminder terms for overdue invoices and a record of payment promises. They give the finance team something firm to chase with. Bank feeds also keep cash posting quick. That keeps receivable figures current.

Questions about Business Central for law firms

Is Business Central a good fit for law firms?

It fits firms that want strong accounting, project-based matter tracking and Microsoft 365 links in one place. Matters, time sheets, billing and reporting work with standard features. However, firms that hold client trust funds should plan for a legal add-on beside it. We look at your practice areas and your billing habits first. So you know the true scope before you commit.

Does Business Central handle client trust accounting?

Not in the way bar rules expect. You can open separate bank and ledger accounts. But ledgers for each client trust, with protection against overdrawing, come from a legal accounting add-on. We help you compare the options on the Microsoft marketplace. Then we set up the one that matches your duties. Your own adviser should confirm the rules for your state.

Can lawyers enter time from a phone?

Yes. Time sheets work in the Business Central mobile app and in the browser. So a lawyer can record hours against a matter between meetings. The lawyer submits the entries for approval. They only become billable once the approver accepts them. That keeps billing clean, and it gives partners a quick way to see who has not yet submitted their time.

Which license do law firm users need?

Accounting and billing staff normally use Essentials. Fee earners who only enter time sheets and approve documents can often work on the Team Members license. It covers light tasks only. We map each role to a license type before you order. So you do not pay for more than you need. Microsoft publishes the current prices, and we count users by role with you.

Can we keep our practice management software?

Often yes. Many firms keep matter intake, documents and calendars in a practice management tool. They run accounting in Business Central. We connect the two through the Business Central API. So clients, matters and invoices stay in step without double entry. We also agree which system owns each record, so that no one fixes the same detail twice.

Related pages for Business Central for law firms

Law firm projects lean on time sheets, project accounting and receivables. These pages go deeper into each of those areas. The professional services page covers firms that bill in a similar way. Start with the area that costs your partners the most time. Then ask us how Business Central for law firms can fit your matters. For the product detail, see Microsoft's guide to managing projects in Business Central.