As a bookkeeper, I frequently recommend using QuickBooks Online for law firms because of the fantastic capabilities it has for effectively managing law firm finances and because of its ability to aggregate financial information that can be really helpful for growing law firms. For attorneys, accounting is especially important because it must be done a certain way to meet ABA requirements and to maintain legal compliance. That means that the risk of double entry data errors associated with using multiple softwares at once can be a major pitfall for attorneys who fail to correctly set up Clio and QuickBooks integration – or any other practice management software for that matter!
Because these integrations are so specific for each software, I’m going to be focusing exclusively on the way to properly set up the Clio QuickBooks Online Integration. Keep in mind that the Clio integration with QuickBooks Desktop is different from this integration process, so if you’re using the desktop version this guide may not be the best resource for you.
Step One: Setting up your law practice accounting using QuickBooks
Before you start the Clio QBO integration, you’ll want to make certain that your books are set up correctly to be able to work with Clio. The first step is ensuring you have the appropriate software. You must be subscribed to Essentials, Plus, Accountant, or Advanced and have the ‘Company Administrator’ permissions in order to complete this integration, so check your subscription level before you get started. While the self-employed version can generally be a decent option for QuickBooks for lawyers who are practicing on their own, it does not allow you to set up this type of integration.
Step Two: Set up your Chart of Accounts in QuickBooks Online
If you already use Quickbooks for your law office, then you may already have set up your chart of accounts. This is the accounting ledger that is used to record a firm’s financial transactions and is truly the building block of all of your law firm’s financial and tax reporting. If you do not have your chart of accounts set up already, then we highly recommend reaching out to us in order to get that set up.
Clio will interact with a few specific accounting ledgers in QuickBooks Online, so it’s important to ensure that you have the following set up:
- Income ledger
- Contra revenue ledger
- Tax payable ledger
- Trust bank account ledger
- Liability ledger
Step Three: Set up your Services in QuickBooks Online
One of the best parts about Clio is that it allows you to to send invoices from the platform you’re already using to communicate with clients. However, this can get messy if your QuickBooks Clio integration isn’t set up properly to link your invoice items with services in Quickbooks Online. When you’re syncing an invoice from Clio, QuickBooks Online needs to have the ability to recognize line items in order to correctly categorize your income. In order to do this, your “products and services” in QuickBooks and your line items on Clio invoices must match and be linked to the corresponding ledger in your QuickBooks Online account. This is an important step when setting up QuickBooks for attorneys whether you use Clio or not because it gives you the ability to track income by type and see what makes your firm profitable more clearly.
Here’s how to set it up:
- Click the gear icon in the top right corner of your screen.
- Click “products and services.”
- Create a new service for each type of income you want to categorize from your invoices
- Categorize each income type to the corresponding ledger using the “income account” dropdown menu.
Step Four: Setting Up Your Clio QuickBooks Integration
QuickBooks Online for attorneys works best when it’s fully integrated with your practice management software. Now that you have your key systems in place, you’re ready to connect your Clio and QuickBooks Online accounts. First, you’ll need to log into your Clio account and go to “settings.” From there, you’ll click on “bill syncing.” Please note that only account administrators can access this feature, so make sure you have the correct permissions!
Once you go to bill syncing, you should see an option to connect QuickBooks Online. Click the connect button to be directed to the QuickBooks Online website, where you’ll login to continue the connection process.
Step Five: Configure Your Integration Settings
Once you finalize your connection, you will arrive back at the bill syncing page. A button for “Configure settings” should appear at this point. The integration has several features you can enable, giving you the opportunity to choose which features meet your firm’s needs. The features include:
- Export approved bills and recorded payments
- Export trust transactions and check printing
- Import hard costs
To learn more about each of these features, click here to download a comprehensive set up guide courtesy of Clio, or reach out to us to learn how we can get these systems set up and working for your practice!
