In any business, relationships are everything. For a legal professional specializing in real estate law, some of the most important relationships aren’t necessarily the ones that generate profits. Establishing a mutually beneficial, long-term relationship with a bank or other lender offers financial stability and the ability to capitalize on opportunities as they arise. Ann Irons, a CPA, explains how real estate lawyers in Bellingham, MA can foster healthy relationships with financial institutions.
Ask the Right Questions
Each practice has different needs, just as each lender has different policies and specialties. Choosing a financial institution as a business requires you to look for different services and benefits than you might consider when choosing a bank for, say, a personal checking account. As you compare your options, keep the following questions in mind:
- Does the institution employ a banker who understands the unique needs of a law firm?
- Is there a possibility that the bank could also serve as a source of referrals, i.e. Does the bank provide services affecting real estate transactions, such as mortgages or new home loans?
- How flexible are interest rates?
- Can I make deposits after business hours?
- Does the bank handle IOLTA (Interest on Lawyers Trust Accounts)?
Line of Credit Considerations
Think of a line of credit as a proving grounds for the lender-lawyer relationship, especially in a newly established practice. At some point, even a thriving real estate law firm finds itself in need of extra cash, whether for an expansion, new computer equipment or office furnishings, or following an unforeseen obstacle. Your goal will be to borrow as little as possible, paying the lowest interest rate possible. The best way to achieve this is by having a solid, established relationship with your bank. Otherwise, you may find yourself resorting to using lenders who charge exorbitant rates as a form of insurance against potential defaults.
Maintaining a Separate Operating Account
It’s tempting to use a single account for personal and professional financial transactions. Resist the temptation, advises Irons, who offers tax return preparation services. You can use the same institution for both types of accounts, but keep the two separate. Nothing raises a red flag at the IRS more than questionable deductions and transactions. If you’re concerned about your ability to maintain financial records for your practice, consider outsourcing your bookkeeping and accounting to a Massachusetts CPA and tax professional.
Need Bellingham, MA accounting or bookkeeping services for your real estate law practice? To learn more about our financial services, or to schedule a consultation with Ann Irons, CPA, LLC, contact us at 508-966-0700. Our team provides financial reporting, tax preparation, and investment advice for businesses and individuals in Bellingham, Medford, Woonsocket, Boston, and the surrounding areas.