Leadership In Law Podcast

S03E111 Why Clean Books Are a Growth Tool with Victoria Blanc

• Marilyn Jenkins • Season 3 • Episode 111

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We sit down with Victoria, a law-firm-focused bookkeeper and trust accounting specialist, to unpack how clean books transform guesswork into growth. From eliminating compliance risk to using ROI to drive hiring and marketing, this conversation turns financial fog into a step-by-step roadmap you can act on today.

We start with the biggest hidden cost: misclassifying client trust funds as revenue. Victoria explains how that single error inflates income, spikes tax bills, and misleads owners about what they can afford. She walks through trust accounting fundamentals, client-level ledgers, invoicing before transfers, and true monthly three-way reconciliations, so you stay audit-ready and confident. Then we connect the dots between numbers and decisions: which ad campaigns earn their keep, when to hire a VA or associate, and how to price work to include overhead and recover case costs.

Victoria also shares a jaw-dropping fraud catch, daily account reviews flagged repeated $1,000 withdrawals via an ITM tied to an EIN, stopped before losses exploded. That story underscores why timely, detailed reporting beats end-of-month surprises. For new and growing firms, we outline simple systems to capture every expense, track KPIs by role and location, and turn monthly reports into clear actions. You’ll learn how to pay yourself a steady salary, smooth tax obligations, and decide whether a second location is a growth lever or a cash drain.

Reach Victoria here: 
www.mga-tx.co
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SPEAKER_00:

We connect you with successful firm leaders and industry experts who share the proven strategies and hard block with the whether you're a statement leader or just starting your journey as a law firm owner. The Leadership in Law Podcast is here to equip you with the knowledge and tools you need to build a successful and fulfilling legal practice.

SPEAKER_03:

Welcome to another episode of the Leadership in Law Podcast. I'm your host, Marilyn Jenkins. Please join me with a bookkeeping firm dedicated to helping law firms across the country eliminate compliance risks, gain financial clarity, and grow with confidence. With over a decade of experience, Victoria specializes in trust accounting, financial cleanups, and monthly reporting that gives attorneys actionable insights, not just numbers. She's passionate about helping law firm owners move from chaos to clarity so they can scale without second-guessing their decisions or worrying about hidden compliance issues. Her clients have saved thousands in missed revenue, avoided costly trust the counting penalties, and growing their firms gasing the clear, reliable financial systems she builds for them. When she's not balancing boats, Victoria is traveling with her family, hiking, or planning her next outdoor adventure. I'm excited to have you here, Victoria. Welcome.

SPEAKER_01:

Thank you. I'm excited to be here.

SPEAKER_03:

Awesome. Tell us a bit about how you got to where you are, your leadership journey.

SPEAKER_01:

Yeah, so I started working in accounting really young when I was 19. And that kind of gave me the ability to be where I'm at today. I at that time was working at a staffing agency and later started working with law firms. And in working as a W-2 employee with a law firm, I found how bookkeeping is super important for law firms. And I was given the opportunity to start working for myself to help multiple law firms. And so that's what I'm doing today is just helping law firms all over the country with their bookkeeping.

SPEAKER_03:

And that is an incredibly important task. I absolutely agree.

SPEAKER_01:

It absolutely is.

SPEAKER_03:

So tell me why you look at flame books as a growth tool.

SPEAKER_01:

Because honestly, if you don't know your numbers, you don't know what's coming into your firm, you don't know what's going out of your firm every month, you can't grow. You don't know if you can hire somebody. A lot of times lawyers are working by themselves and when they really should be able to outsource administrative work, bookkeeping, that sort of thing. But if they don't know what's coming into their firm and they don't know what's leaving their firm every month, they don't know, they can't grow, they can't add to their staff. And so they just get bogged down in all of the administrative tasks and other things that really is not practicing law or growing their firm.

SPEAKER_03:

That is true. And there's you always hire professionals. That's why we hire attorneys when we need legal work done.

SPEAKER_01:

Oh, absolutely. Yeah. I'm not going into a courtroom by myself, that's for sure.

SPEAKER_03:

Absolutely. So what is it? What are the few examples of hidden costs of bad bookkeeping?

SPEAKER_01:

Outside of just the obvious of paying somebody to fix what somebody else has messed up or not done. I have seen, I was working with a law firm last week that all of the money that came into their trust account was counted for last year as revenue instead of a liability. And so their income was way overstated. And so that that law firm owner ended up paying significantly more in taxes than they obviously should have because that money was not income. Not yet, anyway. It's been so it shouldn't have been counted as income. It counted as income in their trust account and also in their operating account. So that's a problem. But then also not taking into account all of the expenses that you should at the end of the year. And overall, you're paying more in in taxes. Your taxable income is higher when you're not taking all of the expenses that you should take, when you're not counting your revenue correctly or your liabilities correctly, when it comes to your trust account and that sort of thing. So it can add up to a lot. And I don't think anybody wants to pay more in taxes than they have to, or then they should. So it becomes a return all of that. Yeah, absolutely.

SPEAKER_03:

Yeah. Wow, that's a major mess up there. And you're saying that clean books are non-negotiable for law firms. So it makes a lot of sense to know where I can grow, where I can market, where I could spend money, or am I making enough money?

SPEAKER_01:

Yeah, or I'm paying this person X amount of dollars a month and this is my return on that, and it's not as high as what I'm paying them. And maybe I need to find another way to do that, or this marketing company isn't working. The amount of money that I'm spending in ads or this sort of thing is not returning anything to me. And learning when to be able to adjust or make adjustments or hire or any of that is important.

SPEAKER_03:

Excellent. I love that. Because you you need to know the ROI on each piece of your business before you can move forward and grow. Because I know a lot of people love where they are. You have to continue to grow, or you're just not going to stay in business.

SPEAKER_01:

Oh yeah, absolutely. And I just like taxes, nobody wants to waste money on things that aren't working either. So whether that's a virtual assistant or somebody who a marketing company or and a printer contract that it costs you too much money that you don't really need, that sort of thing. Just knowing what everything costs and what you're actually bringing in and how much of that you're keeping. Cause I don't think anybody is working just to spend money on things. So you want to be able to make money off of the money that you're spending.

SPEAKER_03:

Exactly. Now, when you work with a a firm and do you go in and find out like you obviously before we jump into everything, what are your goals? Where do you want to go? What do you want to do?

SPEAKER_01:

Yeah, I do. The first thing is getting the books clean and usable and figuring out, okay, this is the money that's coming in, this is the money that's going out, here's your net income for the month, the year, and then figuring out, okay, most of the time people want to clean up their books because they need to hire somebody and they need to find out if they have the money to hire somebody, or they want to hire a marketing company, or they want to do something. There's some kind of goal. It's usually not just I want clean books, although it should be. But there's usually some kind of goal. And so cleaning up the books and then figuring out, okay, this is your goal and here's where you want to go. And yes, you have the ability to do that now, or no, we don't, but we can get to that point. And here's here's the things that we can cut. Here are the things that we need to look at. Here are the things that maybe you're double paying for that you probably didn't realize you were double paying for, that sort of thing, and drawing a roadmap for these law firm owners to get to that point to be able to accomplish their goal.

SPEAKER_03:

Okay. That makes sense. Absolutely. And you're talking about the trust attorney. I had a problem with that, with the trust. What are some common mistakes, accounting mistakes that are made in those types of accounts?

SPEAKER_01:

Yeah. A lot of times hiring a bookkeeper, especially if they don't know anything about your trust account, doing things like counting what's in your trust account as revenue, not invoicing before you transfer the money from your trust account to your operating account, not documenting when you do make those moves. And it's truly a liability. So you can't just do the transfers and mark them as transfers. You have to keep a ledger of every client that has money in your trust account and continue to add and or take away from that ledger as the case goes on and as deposits are made or transfers are made into your operating account, that sort of thing. So just making sure to keep really good records of that stuff instead of I have it on a spreadsheet. And sometimes I up update the spreadsheet and not keeping good records is really the biggest problem.

SPEAKER_03:

Okay. And then that's also a compliance issue as well, to make sure that if anyone comes to check, you've got everything, your ducks in a round.

SPEAKER_01:

Oh, absolutely. And you don't want to have to be trying to scramble to put that stuff together because it is it's not easy. That's for sure. Especially if you it's been a long time since you've reconciled all of that.

SPEAKER_03:

I know I ran into a problem when I moved from one accounting software to another. The person at the site at the new software didn't create right categories and ended up throwing everything they didn't understand instead of asking us about it, threw it all into a loan to partners. And we didn't realize that until after a file, our taxes were filed. So it required, oh my God, the thousands of dollars to get that fixed, plus refiling your taxes.

SPEAKER_01:

Yeah. And keeping track of your trust account too is there's a lot of people who don't know how to do it. So the people who do do it, especially if you need all of that in a pinch, it's not cheap either to fix that.

SPEAKER_03:

So getting it right to start with, absolutely. Yeah. And I love that you compare busy versus profitable and underscore your numbers. Because I think we all get stuck in busy. So give us your ideas on that.

SPEAKER_01:

Yeah, I think filling up a calendar and filling up a schedule and making sure that you are busy is important. But if you're not one, charging what you should be or two, keeping track of your overhead and making sure that's accounted for in what you're billing, it you can be, you'll be busy in until the day you die and you won't make any money doing that. And so making sure that what you're doing is actually profitable, the fees that you're charging include the overhead for your paralegals, your assistance, that sort of thing. Making sure that you're billing for their time, making sure that you're not just you're billing for ex any case expenses and that sort of thing. A lot of times those things get left off. And so your firm ends up eating that when really that should have been passed on to the client and you should have been reimbursed for that. And being busy doesn't always equal being profitable. And so really just again, it's about knowing your numbers and keeping track of those things. And a lot of times law firms don't know their numbers and don't know, okay, and so you have a conversation, you're like, okay, how are you tracking case expenses or keeping track of them so that you know that they're being billed? They're like we're not. Yeah. So making sure that there's a system in place. And that's something that I help with too. You can do that in QuickBooks or in accounting software or even in case management softwares, but having somebody who's keeping track of those things is important.

SPEAKER_03:

And I'm sure you get into and you dive into their books, you can find out if they're actually undercharging for their services or, you know, how to adjust that to make it be more correct for what they should be doing.

SPEAKER_01:

Yeah, absolutely. And making sure that again, everybody's time is being billed for and overhead is being taken into consideration and that sort of thing. Yes, absolutely.

SPEAKER_03:

Fantastic. Yeah, and the confidence of knowing that your books are in good in hand. So I'm that that's something that's amazing. And after that kiasco, I do have an amazing bookkeeper. So I'm glad to have met you as well. So it's just sounds like this is you may you give somebody then a way to sleep peacefully at night.

SPEAKER_01:

Yeah, absolutely. And you want to be able to say, oh, let me ask my bookkeeper and not, oh, let me ask my bookkeeper about that. You want to know that they know what's going on for sure.

SPEAKER_03:

Absolutely. And how would you how do you know if your bookkeeper's doing a good job?

SPEAKER_01:

Yeah, so my biggest thing is reporting and making sure that one, you're getting monthly reports. You can't make any decisions about growing or going in a different direction or any of that. You can't really make any decisions without actual information, financial reports. But two, making sure that you understand what you're looking at. You can't just, oh no, I get reports monthly, but it doesn't mean a whole lot to me. So making sure that you understand that finding somebody that you can actually have a conversation with and talk to about your reports and making sure that they're explaining the numbers that are on the page, making sure that not only your bank reconciliations are done, but your trust accounting reconciliations are done, those three-way reconciliations that are so important for compliance and making sure that those are done monthly. And then if you're if depending on the relationship with your bookkeeper, if you're coding transactions or you're you're have some kind of hand in it, making sure that they're reviewing those things and that they're catching errors that might occur or things that might not be done correctly and saying, hey, what was this transaction for? But also I think having them ask questions. I think as when you first start out with a bookkeeper, there's a lot of questions there. They're trying to learn your law firm and the transactions that regularly occur through your that come through your accounts. There's inevitably transactions or things that happen and you're like, hey, did you mean for this to happen? Or was this you? Or I was working with a law firm and they had certain cash withdrawals that they did not normally have. And I I asked them about that. And be it happened, it happened once, and I was like, okay, maybe they did that. And then it happened for the next two days after that. And they weren't small transactions. And turns out their bank sorted a system with a different type of an ATM kind of thing. And so somebody who had their EIN was able to go to one of these, it's called an ITM, was able to go to one of these machines and just withdraw cash. And they were not aware of it. And because I was going through their accounts every day, I was able to catch that before it was. It was already thousands of dollars that they took. It was about a thousand dollars a day before it got to be astronomical. And so that they were able to contact their bank and their bank was able to shut that access down so that didn't continue. So it's the value of having somebody look into your look at your accounts daily is really important as well.

SPEAKER_03:

Well, as a business owner, you probably wouldn't even notice that until your statement comes out.

SPEAKER_01:

Yeah. Yeah. Especially because this was not a small firm and$1,000 a day wasn't that big of a deal. But obviously, when it's fraudulent, it means and whoever that person was figured out that they were able to do that and they would have continued to do that.

SPEAKER_03:

Yeah, that's amazing. You could do that with an EIN. That's just so insecure for a bank too.

SPEAKER_01:

Yeah. And so there were a lot of things put in place for that law firm after that with that bank. So that way that didn't happen starting with that access being shut off.

SPEAKER_03:

You're watching, that's amazing.

SPEAKER_01:

Yeah, absolutely.

SPEAKER_03:

So if we're thinking about obviously hiring a bookkeeper is a number one thing, but financial habits for successful law firm or things that it's say you haven't done it or you're getting ready to start your firm. What would you say is your the steps you would take to be to have the right financial habits?

SPEAKER_01:

Yeah, so finding either a bookkeeper or an account accounting software is really important. Making sure that from the beginning you have somewhere to record everything. There's a lot of startup costs that come when you start any type of business. So making sure that those costs are accounted for, that you have a record of those. So that way, again, when it comes to tax time, you're not just handing your CPA a bank statement or maybe a shoebox of receipts. You're gonna buy that. Yeah. Yeah. It happens a lot. It happens a lot with small businesses, but it surely happens with law firms too. Making sure that you have some kind of software. And then also, like we talked about before, making sure that there is some kind of system that you have in place. Maybe it is an Excel spreadsheet, maybe it's a case management software that you start out with, something where you are recording your trust transactions, the money that every penny that comes into that account and every penny that leaves that account, and making sure that you're not keeping a client's money at the end of a case or you're not leaving the case with them owing you money is very important. So you don't want your somebody's trust accountant to be balanced somebody's trust balance to be negative and you not know it until months after their case is over. If you're starting a law firm, that those are probably the two biggest things I would say. Even if you don't start with QuickBooks or any of that, making sure that you have some kind of system because paying a CPA at the end of the year to to reconcile everything and go through your shoebox of receipts is way more expensive or will be way more expensive than having a bookkeeper or somebody to help you throughout the year getting that stuff done.

SPEAKER_03:

I absolutely can agree with that. I paid way more than I needed to clean that up. But yeah. And I love the way that you approach bookkeeping with law firms. It's more of a true financial partnership. So you know what the manager or the managing partner, their goals are what they want to do. And so you can see if that's viable based on the reports that you can pull from the books.

SPEAKER_01:

Yeah, absolutely. And that's honestly, that's my goal for everybody that I work with is just making sure that we can accomplish your goal. Having clean books is great, but if you're not doing anything with that information, it's as useless as not having that information. You have clean books so that you can make decisions about your business, about growing your business, about what direction you want your business to go in. A lot of times it's should we open a separate another location? Or hey, we have two locations and you're tracking your profit by both locations and figuring out that, hey, this location over here is just draining money when it's not worth it. So do we close it, do we move it? What do we do with that? And just helping the managing partner, the business owner, make those decisions and come up with those things. And or sometimes it's okay, we know that this location is just starting out. And so we know that we're gonna spend we have a budget of what we're gonna spend to start up this location and figuring out, okay, we that budget was too small or too big, or we didn't need as much as we budgeted for this project. And those are always good. Those are always good conversations. Yeah.

SPEAKER_03:

So I'm Tori, so you help turn the numbers into a strategy for growth because it could be they just need a bigger office, or you'll be able to tell them that they can afford an associate and grow in that way.

SPEAKER_01:

Yeah, absolutely. Or hire an assistant and start out with, especially if you're just starting and it's just you, making sure that you can afford to hire an assistant, or hey, you can afford to hire somebody part-time. And then that ends up freeing up your time to be able to go out and actually increase your revenue because you're paying somebody$20 an hour to do something that you, if you're billing, you know,$300 an hour and you're doing those tasks, but you could pay somebody$20 or$30 an hour to do those tasks, and obviously that would be worth it. And so making sure that, okay, yes, you can afford to pay somebody to do this stuff, and so you can increase your revenue. Or starting out figuring out, okay, you you are you're able to pay yourself a salary now, and here's what you should what you can pay yourself. And instead of just especially when you start out, you're just taking owner draws and you're not really sure about a consistent salary and that sort of thing. And so those are good and exciting conversations to have and definitely growth conversations. So absolutely.

SPEAKER_03:

And plus taking the salary and pay your taxes along the way instead of having a big tax bill at the end of your taking owner draws.

SPEAKER_01:

Yeah, yeah, absolutely. And that that's a conversation too, in in including your CPA who's going to be doing your taxes, but having those clean numbers, you can be able to make those decisions to to figure out, okay, here's tax-wise, here's the smart move to go.

SPEAKER_03:

So they talking about the the monthly reports that we get from our bookkeeper, how do I know the difference between just an informational report or a paginable report?

SPEAKER_01:

And again, it's just making sure that everything is clean. I like to provide reports of transactions so that you can see as a law firm owner, okay, here's all the transactions that were categorized as office supplies or as a rent expense or the different marketing expense. And so they can just breeze through that and overview that and say, yes, this is what these things are, or I know that we typically pay this company this for this certain category, but really this should have been this or what have you. So making sure that you under you understand your reports, making sure that they're clean and they're on time and that the everything is categorized correctly is your first step in that. And then I think a lot of it is honestly just a conversation of hey, this is our overhead is too high, or your overhead is this percent of your your income, or that sort of thing, or hey, your marketing expenses are really high this month, or have been really high for the last couple of months, and your revenue isn't really going up. And a lot of that is just is done through a conversation, I think.

SPEAKER_03:

Okay, yeah. So it's not just as simple as a PL or a detailed PL to that highlights what's going on and gives more about an idea of where the money's going.

SPEAKER_01:

And yeah, absolutely. Yes.

SPEAKER_03:

Excellent. And when it comes to taking our PLL and we've got our expenses, obviously you're categorizing those. Are you tracking do you help her set up tracking expenses so that they can see and planning to grow? Is that something that would be different categories or whatever? How would you handle that? What do you mean by that? So every firm has expenses and you're talking about are you charging enough for your time and keeping all those within the book so it's a clear picture of each case? That's something you help set up for that.

SPEAKER_01:

Yeah, absolutely. And as far as coming up with and tracking KPIs as well, when you have different when you have multiple attorneys or you have other staff members coming up with, okay, this these things should be done by this person, there's ways to track all that, especially in accounting software is that like QuickBooks that are super helpful. So again, if a location or a person or that sort of thing is meeting those goals that you have set for them.

SPEAKER_03:

I love that. It's so imperative to get your books right. So anybody that's listening, if you don't have your books right, you don't know your numbers, you gotta reach out to her. Oh, yeah, absolutely. Orion, definitely. It's such an important thing. And I ran into it thinking I had it in under control. And to have a bookkeeper out me through that and then a CPA, it was a lot of money, but everything is right now. And I love my monthly reports. I understand them, and that's important to have that as well. So I love what you do for firms. I know the audience are probably gonna want to reach out to you and connect with you. Where would be the best place for them to do that?

SPEAKER_01:

Yeah, so I have a I have a website, it's nga-tx dot co. Or on Facebook, I have a you can just search Victoria Blanc and find me there. Or we have a group of law firm owners called Law Firm Success Circle. And so you can reach out on either of those, either of those ways.

SPEAKER_03:

Fantastic. We'll have both of those links in the show notes. And this has been so informative. I really appreciate you being here and giving us such good advice today. Thank you, Victoria.

SPEAKER_01:

Absolutely. Thank you.

SPEAKER_02:

Thanks for joining me today for this episode. As we wrap up, I'd love for you to do two things. First, subscribe to this podcast so you don't miss an episode. And if you find value here, I'd love it if you would rate it and review it. That really does make a difference in helping other people to discover this podcast. Second, you can connect with me on LinkedIn to keep up with what I'm currently learning and thinking about. And if you're ready to take the next step with a digital strategist to help you grow your law firm, I'd be honored to help you. Just go to Lawmarketingzone.com to book a call with me. Stay tuned for our next episode next week. Until then, as always, thanks for listening to Leadership in Law Podcast, and be sure to subscribe wherever you listen to podcasts so you don't miss the next episode.

SPEAKER_00:

Thanks for joining us on another episode of the Leadership in Law Podcast. Remember, you're not alone on this journey. There's a whole community of law firm owners out there facing similar challenges and striving for the same test. Head over to our website at lawmarketingstone.com. From there, connect with other listeners, access valuable resources, and stay up to date on the latest episodes. Don't forget to subscribe and leave us to review on your favorite podcast platform. Until next time, keep leading with vision and keep growing your firm.

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Marilyn Jenkins

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