Attorney Bookkeeping: FAQ’s on Clio and Law Firm Accounting Workflows
Aug 21, 2023At law firms, Clio software has emerged as a leading solution for attorneys seeking efficient practice management. With its two main components, Clio Grow and Clio Manage, this software offers a comprehensive platform for lead management, document management, calendaring, and billing. In this blog post, we will delve into the intricacies of Clio software, discuss its significance in the legal field, and shed light on best practices for utilizing this tool effectively.
The Power of Clio Software
Clio software, renowned as the number one choice among attorneys, is an integral practice management tool. While Clio Manage is the primary component used by law firms, Clio Grow complements it by providing lead management capabilities similar to popular platforms like Mailchimp, HubSpot, or Salesforce. As a legal professional, understanding the functionalities of both parts is crucial when working with attorneys who rely on Clio software.
Sharing User Access and Entry Management
Law firms often share login credentials with their accountants when accessing Clio software. However, this practice has its limitations. Since Clio does not distinguish between user entries, it becomes challenging to identify who made specific entries. To address this, it is recommended that attorneys purchase separate user seats for their accountants. By doing so, accountants gain their own login credentials and can seamlessly manage entries, ensuring accuracy and accountability.
Ensuring Data Accuracy and Corrections
Occasionally, mistakes may occur in Clio software, such as discrepancies between transfer amounts or incorrect transaction bookings. Having separate logins allows accountants to rectify these errors promptly, eliminating the need for back-and-forth exchanges with attorneys. It is essential to remember that Clio has a one-way sync with accounting software like QuickBooks. Therefore, any changes attorneys make in an invoice or transaction will trigger a separate transaction. Accountants must diligently review and address these additional transactions during reconciliations.
Expense Classification and Chart of Accounts
To appropriately classify Clio software expenses, it is crucial to understand that they fall under overhead costs rather than the cost of goods sold. Unlike manufacturing businesses, where the cost of goods sold refers to individual components required for creating a final product, Clio software is an indispensable tool for legal operations. Therefore, it should be categorized as a software expense, which has become a significant portion of law firms' budgets. Employing a preferred chart of accounts tailored for law firms helps streamline expense tracking and reporting.
Conclusion and Resources
In conclusion, Clio software has revolutionized practice management for attorneys, offering a comprehensive suite of tools for efficient legal operations. Legal professionals can harness the software's full potential by understanding Clio Grow's and Clio Manage's nuances. Moreover, adopting best practices such as separate user access and diligent data management ensures accurate and reliable financial records. For further guidance and resources, consider joining our free Facebook group or exploring our Mastermind group, where you can engage with industry experts for personalized assistance.
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