The hidden cost of getting your accounting migration wrong - and how to avoid it

In episode 33 of the Empowering Law Firm Leaders podcast, Claire discusses with Amy Bruce, marketing director at Osprey Approach, the most common financial and compliance pitfalls firms encounter during system migrations, the practical steps required to clean and validate data, and how strong financial controls can underpin lasting profitability.

In this conversation, Claire Ellis, certified chartered accountant and founder of JJ&H Accounting Services, shares candid, firsthand advice on how law firms can successfully implement new accounting and billing software to strengthen their financial foundations.

In this conversation we cover:

• The one piece of advice every firm leader needs before switching systems
• How to spot the early warning signs that your current accounting setup is failing
• Practical steps to clean and validate financial data before moving
• The financial controls that have the biggest impact on profitability and cash flow
• Emerging trends that will define well-run law firms over the next five years

The one piece of advice every firm needs before switching systems

When asked for a single, non-negotiable piece of advice for any firm leader considering a switch of case management or billing software, Claire’s answer was immediate. “It’s being really clear why you’re moving,” she says. “It could be that you’re moving because prices are high in your current system and you actually just want to have it scalable for the firm. Or it could be that you’re actually having struggles with reporting or processes in the system, and it’s not really fit for what you’re doing now. So it is being really clear and identifying what that is.”

It sounds straightforward, but in practice many firms overlook this foundational step and find themselves mid-migration without a clear benchmark for success. A move carries significant cost – not only financially but in the time and disruption it demands from the whole team. “There is a lot of cost and challenge in moving systems,” Claire explains, “so really understanding the reason why you’re doing it is probably the key thing.” Without that clarity, there is no way to measure whether the investment was worth it.

That ‘why’ also acts as a safeguard against the appeal of the new and shiny. As Claire notes: “Especially lately, there’s a lot of legal tech, there’s a lot of shiny new – it can be very enticing to just jump. But actually, the cost of that, not only in money but in time… the amount of time it takes to migrate is always underestimated.” The answer to the problem may not always be a new system. It could lie in better training, an updated configuration, or a conversation with the current supplier about features that are already available.

When people understand what the firm is trying to achieve, they are better placed to contribute meaningfully, raise concerns early, and measure progress honestly. As Claire summarises: “When you do move, then you can measure whether it was worth it.” That simple principle – start with intention, finish with evidence – is what separates successful migrations from those that fizzle out.

Early warning signs that your current accounting setup is failing

Not every firm that is struggling with its accounting setup needs to move systems, and Claire is clear that the first job is always to diagnose the real problem. “If your finance team are really struggling, it may be time to get trainers in before you think, ‘oh, we need to move systems.’” Pinpointing the specific pain point – and distinguishing between a system problem, a training or process problem – is what allows firm leaders to make decisions based on evidence rather than frustration.

The most telling warning sign, in Claire’s experience, is when reporting is being completed outside of the system. “If you’re extracting data to be able to get the reports that you want. Now, that can cause a lot of issues for the finance team, and  the data’s out of date very quickly.” Live trackers maintained in spreadsheets, figures pulled from one tab and pasted into another, calculations done manually outside the platform – all of these signal that the system is no longer doing the job it should be.

A second red flag is a managing partner or COFA who feels they have lost visibility of what is happening in the firm. “If the managing partner’s saying, ‘I never know what’s going on’, they haven’t got their finger on the pulse, they’re not getting the reports they want” Monthly reporting cycles, Claire argues, are no longer sufficient: “Your month-end figures are out of date within a week. You’re moving on. You want to be looking forward, know what’s in the pipeline, what’s going through, rather than looking backwards all the time. You want to be using it to forecast.”

Beyond timing, there are four areas that warrant careful attention. The first is client account balances. “You should be looking at your client account balances to make sure that you’ve cleaned up and archived any old matters, so that you’re not bringing anything over.” Data must be kept for six years, but that does not mean it needs to be active in the new system. “You don’t need it in your new system as a live matter, because otherwise it just clogs up.”

The second area is your office accounts. “Have a look at your nominal accounts and ensure that your prior year accounts are accurate and match whatever was filed.” The third and fourth areas are debtors and WIP. “Look in your debtor’s ledger through your aged debtors report, just seeing if there’s anything on there that actually isn’t going to be recoverable – you may as well get rid of it, write it off and clean it up before you come across.” The goal throughout is simple: “it just gives you a clean slate before you start on your new system.”

Financial controls that protect profitability and cash flow

For SME firms navigating sustained profitability pressures, Claire is direct: financial controls are not just a compliance requirement, they are a commercial lever. The firms that manage profitability well are those that monitor the right metrics, assign clear accountability, and act on what the data tells them. The starting point, she says, is credit control. “First one would be to have a really strong credit control policy  and you’re actively following it, because having it set up is one thing, but it might be living in a drawer and doesn’t get used.”

The specific metrics Claire recommends keeping a close eye on are debtor days and lock-up: “what are you doing about your debtor days? Are you actively reviewing those?” Industry benchmarking figures, broken down by matter type, give firms a reference point against which to measure themselves. “Once you understand where the money is stuck, you can start to make little tweaks, which can make a big difference.

One of the most impactful – and often overlooked – changes Claire recommends is introducing a cash-in target alongside billing targets. “Quite a lot of firms will have a billing target, but actually, you need to really have a cash-in target as well, because it’s all well and good saying, oh, billing target, but that isn’t cash for the firm until it’s paid.” Fee earners who are only measured on billing may assume that unpaid invoices become a finance problem.

On the compliance side, client account hygiene deserves regular, documented attention.” Small, consistent habits in this area prevent larger compliance problems from building quietly over time.

Emerging trends that will define well-run law firms

Looking ahead to the next two to five years, Claire identifies three developments she believes will increasingly define the best-run firms – all of them rooted in a shift from reactive financial management to deliberate, forward-facing strategy.

1.     Stronger financial reporting: “Really understanding what’s going on in the firm, building budgets, forecasts, and cash flows.” Cash flow in particular is an area where many firms are still working reactively. Planning for cash flow across the year, with a view to seasonal patterns and matter type timelines, removes those moments of scramble that many firms know too well.

2.     Granular profitability analysis: “Looking at profitability by matter type, or partner, or area of law – it’s good to understand where you may have some areas propping up others, where there’s a longer timeframe for cash to be out of the business.” With good reporting in place, firms can run mini P&Ls by department and see precisely how each part of the firm is performing. Claire cautions against drawing simple conclusions from this data, however: “you can’t just go, oh, well, that’s not profitable, we’ll get rid of that, because actually that could be helping in other areas.”

3.     Cross-selling from existing clients: “It happens quite a lot where firms don’t think of [cross-selling]. So there’s always opportunities, rather than thinking, oh, I’ve got to actually go and get more clients – it could be there’s opportunities within your client base at the moment, so using the reporting to drill into that is always good.”

Building financial resilience through planning, people, and process

Across the conversation, a clear theme emerges: the firms that navigate financial system migrations successfully – and sustain profitability over the long term – are those that treat every major change as an opportunity to be more deliberate. Clarity of purpose, early involvement of the right people, and a willingness to do the groundwork that others skip are what separate successful outcomes from costly ones.

People sit at the heart of this. Finance teams that are excluded from major decisions, or handed a new system the day before go-live, will struggle – and the firm will feel the consequences. Firms that bring their finance professionals in early, give them time and space to test and adapt, and support them with training and clear policies will find that the transition is not only smoother, but genuinely transformative.

The ambition, ultimately, is to move from a firm that reacts to its financial position to one that actively shapes it. With the right data, the right controls, and the right culture, that is well within reach for firms of any size.

Watch the full interview with Claire Ellis now to discover more advice and guidance on successfully migrating your firm’s financial data and implementing new accounting software. You’ll also hear Claire’s exclusive insights on supplier selection, managing the human side of change, and the financial controls that are making the biggest difference to firms right now.