Clio and QuickBooks Integration for Law Firms: Is It Worth It?

We Used To Say Yes. Here's Why We Changed Our Minds.

If you run a small law firm on Clio, one of the selling points was the ability to sync with QuickBooks. Maybe you already turned it on. It sounds like a no-brainer: Clio talks to QuickBooks, your books update themselves and you get back to practicing law.

We've now worked through this with several small firms on Clio, all with the QuickBooks Online sync running. In one case we left the sync alone. In the others, we've disconnected it.

Here is what we learned, what worked, what didn't and the approach we use instead.

What the Sync Is Supposed to Do

Clio's help center states that bills, payments and trust activity you record in Clio are copied over to QuickBooks so nobody has to type them twice (Clio Help Center). Every bill in Clio becomes an invoice in QuickBooks. Every payment shows up as a payment. That’s good, right?  Well, not necessarily.

The Good Part

When the sync works, it accomplishes several goals. 

• No manual input. The transaction sync cuts out the typing and input errors you might incur otherwise. That’s good practice, but do you really need every transaction in QuickBooks?

• Every client shows up in QuickBooks. You can run a report of who owes you money in QuickBooks, not just in Clio. Sounds good in theory, but is it? 

• Your books show what you billed, not just what you collected. In other words, syncing puts your books on an accrual basis. Some firms may need that, particularly larger firms with complex partnership reporting or financing requirements. But that's not really Clio's target market, in my opinion. Most attorneys want cash basis books.

The Not-So-Good Part

• Transactions fail to sync, and nobody tells you. A client record gets entered in Clio with extra identifying information in a field, QuickBooks won't accept that format, and every bill tied to that client does not sync. No notification. No warning. Clio does have an integrations page listing what is held up and why but most of the issues noted are simple programming hurdles Clio could eliminate in the integration coding.

• Some errors don't clear even after you fix them. This is the one that troubles me. You correct the record in Clio to clear the error, and the transaction might still not sync to QuickBooks. That's a real deal-breaker. A sync has to work. Period.

• More than one trust account? The sync can't handle it. Small firms often may have more than one trust account (an IOLTA account plus a separate account for a large settlement or for garnishments). There is no mechanism to sync more than one trust account from Clio to QuickBooks. In those instances, you're doing it by hand anyway.

• Your practice areas don't carry over. Want to know how much revenue came from estate planning versus family law versus real estate? Clio knows. QuickBooks doesn’t. The sync dumps everything into one income bucket on the profit & loss report. That's the report most firm owners actually want and the sync doesn't give it to you.

• You end up reconciling the work twice. This is the biggest issue caused by the Clio | QuickBooks integration methodology itself and the integration syncing problems noted above.

  
  

  You are already reconciling your trust account: the trust bank account, Clio's trust account and the individual client trust ledgers; all of which must agree. When QuickBooks duplicates Clio's detail, you are forced to reconcile all of these details a second time. When you throw in random sync errors, attempting to reconcile Clio activity in QuickBooks can turn into a quagmire and depending on the volume of Clio transactions, one could spend many wasted hours tracking down missed transactions, fixing sync errors and hoping the next sync pulls them in.

The Key Takeaway

In Kansas, attorneys are required to perform a three-way trust reconciliation monthly in Excel. For firms on Clio, that means reconciling the overall trust account in Clio, the individual client trust ledgers and the firm's trust bank account (and by direct contra-relationship, the trust liability account).

Nowhere in this compliance requirement is it required to completely duplicate your client trust detail inside your accounting system. Unfortunately, Clio's QuickBooks integration is designed to do exactly that. Sync failures and transaction volume often turn this functionality into a nightmare to manage.  And, it simply isn't necessary.

What We Do Instead

For our clients, we run the three-way trust reconciliation weekly and QuickBooks isn't part of it at all. Any recon issues get corrected within a few days, whether that's making a bank adjustment or recording a missed payment in Clio. 

Once the trust bank activity matches Clio for the week, we record the bank transactions in QuickBooks from the connected bank feed using the total transaction amounts. Deposit slips and online payment records get attached as PDF support that ties back to Clio. Simple entries that match the actual bank activity, which not so coincidentally ties to Clio. Remember, Clio is where the real detail lives. QuickBooks just carries the trust bank account transactions generated by the sum of activity in Clio itself. 

Monthly, we run Clio's built-in trust account reconciliation, made far simpler by the weekly work where we already caught and corrected any problems. All part of a normal month-end close process. The result is a cash-basis accounting system that's far easier and cheaper to run and gives our legal clients confidence their trust accounts are in compliance, not just monthly, but week-to-week. What goes away are fruitless hours spent hunting down missing transactions in QuickBooks created by a sync process that can't fully be trusted.

The Bottom Line

Clio is an incredible, feature-rich legal management system for small law firms. It really is a fantastic tool! Through our experience with it, though, we’ve found the QuickBooks integration to be more of a nuisance than actual help. Complete transaction duplication of Clio inside QuickBooks shouldn’t be the goal. The goal is books you can trust without spending untold hours hunting for a Clio bill or payment that never synced. For most small firms, disconnecting Clio from QuickBooks is a smart move that gets you that peace of mind faster, with fewer surprises and far less stress.

If you're a Clio firm with QuickBooks integration turned on and your trust account never seems to reconcile, it could be a sync issue you're fighting.

We would be happy to take a look. Call 785-914-5414 or Schedule a Free Consultation Call and let's bring some clarity to your firm's books!