Clio Releases Law Firm Accounting Software for Small Firms

Traditionally, one of clearest divisions in web-based law practice management systems was between products that supported billing and trust accounting, and those that offered billing, trust accounting, and general ledger accounting. Products that included general ledger accounting didn’t require synchronization with a business accounting package, such as QuickBooks or Xero, because those features were already incorporated into the law practice management system (“LPMS”).

Impetus for this Product

Most LPMS tools do not offer “full accounting,” providing only billing and trust accounting. Until July, Clio, one of the earliest, best-known, and most successful LPMS products stood in this category. Subscribers to Clio Manage track billable events, send invoices, receive electronic payments, and track trust account activities. But seeing a complete picture of the firm’s financial health required integration with either QuickBooks or Xero. But now that has changed.

This month Clio released Clio Accounting, an add-on product for Clio Manage subscribers that allows firms to see their entire financial picture natively within the Clio system-no need for an integration or sync with a third-party accounting tool.

What Does This Change for Clio Users?

Clio users can expect three things from Clio Accounting: convenience, familiarity, and reliability.

Convenience

With accounting functionality built directly into Clio, users have one source for their entire financial workflow. By connecting their Accounting product to the existing Manage system, Clio eliminates the need for duplicative entry of client contact information, matter information, invoices, payments, and trust accounting activity. All firm finances live in one place, making it easier than ever to see a clear, timely picture of how well the firm’s business is doing.

Switching between the Manage and Accounting modules is as simple as switching between Manage and Grow. Just click the dropdown and select the tool you want to use.

Familiarity

Built-in accounting adds the consistency of not learning multiple program interfaces. Using the same layout lowers the learning curve for users.

Accounting mirrors Clio Manage’s design language of tabs down the lefthand side, representing core functions like Accounts Receivable, Banking, Hard Costs, Operating Expenses, and Reports. Like Manage, Clio Accounting’s home screen is a dashboard view, highlighting key metrics like bank balances, accounts receivable, and current profit and loss numbers.

Plus, Clio approaches accounting with their customary user-first mindset. Getting started with Clio Accounting requires just a reconciliation report from your existing accounting tool, opening balance figures for each account, and the most recent bank statements. Any operating or trust accounts you’ve created in Manage map over automatically.

Reliability

One of Clio’s hallmarks is its ability to serve as the hub of your practice, being the central connection between the programs and services you use . They partner with great companies and build on sound technologies.

For Accounting, Clio relies on Plaid to connect to your bank accounts. Plaid, a leader in banking data and security, supports over 12,000 financial institutions. The partnership with Clio means that Accounting has compatibility and dependability on day one.

Additionally, knowing your business means knowing your numbers. For attorneys, there are no numbers where reliability and precision matter more than trust accounting. “As law firms navigate the complexities of trust accounting and compliance, the need for a specialized solution has never been greater,” states Hemant Kashyap, Chief Product Officer at Clio. “With Clio prioritizing trust accounting compliance, legal professionals can manage their finances with ease and confidence, while remaining focused on the practice of law.”

More to Come for Clio Accounting

As released this month, Clio Accounting is a strong step forward towards Clio users having a “single source of truth” for client, matter, and financial information. Still, Clio Accounting is also essentially a “version 1” product. If you are a power user of your current accounting solution, you will notice gaps.

Cash Basis Only

This first iteration of Clio Account supports only cash basis accounting. Those using accrual accounting should wait.

Permission

Unlike Clio Manage, Accounting does not yet support fine-grain permissions and access controls. If you give a user access to Clio Accounting, they can see everything in the system.

Reports

With the initial release, Clio Accounting supports only six core financial reports: profit and loss statement, balance sheet, cash flow statement, reconciliation, general ledger, and trial balance. Clio understands users want additional report types and customizations. More are on the roadmap, including three-way reconciliation for operating and trust accounts, according to Ryan Ward, group product manager for Clio Accounting.

Starting with Hourly and Flat Fee Practices

Accounting’s financial reporting and recording support only hourly or flat fee arrangements. Contingency-based practice areas, like personal injury, and those using deferred revenue and escrow accounts, like real estate, should wait.

What Does This Mean for Lawyers?

Debbie Foster, CEO of Affinity Consulting, commented that Clio Accounting is a major step forward for small firms: “We worked closely with Clio throughout the development and beta testing of Clio Accounting. We believe the approachable user interface and tight integration with Clio Manage provide solos and small firms an excellent opportunity to improve their accounting system.”

Clio’s accounting package targets firms with between one and four attorneys . Current Clio users, especially those frustrated with sync-based connections and those relying on Excel or paper spreadsheets, should consider Clio Accounting. Its focused approach to simplifying accounting for law firms may appeal to those intimidated by traditional accounting software.

According to Affinity Consulting cofounder Steve Best, “While it doesn’t break new ground with its initial feature-set, being an integral part of the popular Clio family makes it groundbreaking. Clio Accounting’s easy synchronization with financial institutions, glanceable dashboard overview, and connection to Manage should put it on the “must consider” list for current Clio firms.”

How to Get Clio Accounting

Clio Accounting is available to U.S. subscribers on the EasyStart, Essentials, Advanced, and Complete tiers. Those on yearly renewal subscriptions pay $29/user per month. Monthly subscribers pay $39/user per month.

Clio Accounting provides one free user license per subscription. Clio envisions the free license as what each firm would give to their outside accountant. Effectively, this means each firm gets one “free seat” of Clio Accounting if it pays for at least one user.

Learn more about Clio Accounting by visiting Clio’s website.

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