Clio recently introduced Clio Accounting on July 16, 2024. This is Clio’s attempt to incorporate law firm accounting functionality into their repertoire of products.
Clio Manage, their foundational case management platform, connects with Clio Accounting as well as other modules such as Clio Grow, and Clio Document Management, each module priced separately and in addition to the subscription price of Clio Manage.
By contrast, Caret Legal, a Cloud-based practice management application, has always had complete accounting functionality built into their application and through conversion during implementation, can bring in AR Balance Forward, Trust Balances, Opening Retainer Balances, and any WIP (unbilled time and soft costs).
Other management features such as CRM, Contacts, Matters, Calendar, Communications, Tasks, Documents, Analytics, and many other features are all included in a Caret Legal subscription.
Prior to the release of Clio Accounting, firms were required to use third-party software to perform accounting functions. QBO, the online version of QuickBooks and Xero, as well as other accounting products, were needed to integrate with Clio Manage in order to provide full accounting functionality. For example, to issue a cost check or other case-related transactions, the payment details would have to be executed in QBO. The transaction would then have to be imported into Clio Manage. This release is the baseline foundation. It utilizes double-entry bookkeeping and includes 3-way reconciliation. Bank feeds are available through Plaid.
Due to peculiarities in state laws this initial release is not recommended for personal injury or real estate practices.
Since this is the first release, the features are limited, with promises of additional features included in future updates. For now, this release is targeted at solo and small firms. It is limited to cash accounting. The accounting module is primarily configured to record entries from other modules. Issuance of vendor payments, cost checks, and trust checks must still be performed by third-party accounting applications.
Unfortunately, there are several drawbacks. There is no conversion path available from QBO or other third-party accounting applications into Clio Accounting. Beginning balances and the chart of accounts would have to be manually entered. Firms would have to continue to both use QBO or other accounting application side-by-side with Clio Accounting until all outstanding transactions have been cleared.
There is no accounts payable module. This would again require running Clio Accounting along side with a third-party accounting product.
Upon this initial release the number of accounting reports is limited and basic. There is also no ability to customize the reports other than date range. It is unknown whether Clio Accounting has met compliance requirements.
Clio has always targeted the solo and small firm market. The release of Clio Accounting further demonstrates their preferred niche.
Other Cloud products such as Caret Legal are aimed at the mid to large sized firms although small firms can certainly appreciate the features and will benefit from its adoption.