For law firms in the United Kingdom (UK) that handle client funds and need to comply with legal client funds accounting regulations, effective client funds account management is crucial. This article provides information about how Clio’s features help you remain compliant. For information about how to manage client funds effectively and compliantly in Clio Manage on a day-to-day basis, refer to Client Funds Management.
Enable enhanced client funds accounting
To start managing client funds accounts in Clio Manage according to UK compliance rules, you first need to ensure that your firm's business address is correctly set for your country. Your address determines your compliance region, and when you first create account ledgers in Clio Manage, you will be able to confirm your compliance region. Refer to Manage Account and Payment Information to learn more about updating your account information, including updating your firm’s address.
If you are new to Clio, you simply have to confirm your compliance region before creating your client funds accounts in Clio Manage. This automatically enables enhanced client funds accounting. If you are migrating from another system to Clio Manage, you will also have to import any client funds account balances from your previous system to Clio.
- If you are not migrating from a previous practice management system (for example, if you are a new firm), and you have no non-zero client funds balances to enter, you can learn how to manage your client funds in the article, Client Funds Management.
- If you are migrating from a previous system, click Contact Clio. A Clio Migrations Specialist will help you to ensure all balances from your previous system are correctly entered into Clio Manage.
Record client funds account balances in Clio Manage
After enabling client funds account compliance, and once you have set up your client funds accounts in Clio Manage, you can record any existing client funds balances from a previous system.
Important: Do not complete this workflow if you are mid-migration. Contact your migration specialist before proceeding to avoid potential data discrepancies.
Step 1: Prepare data
Before importing client funds balances into Clio, reconcile your client funds account in your previous system for the last full month, and generate a Client Account Trial Balance Report (the name may vary in other systems). This report will provide the matter client funds account balances you need to record.
Tip: Consult with a client funds accountant or expert during the migration process to ensure all financial details are handled correctly.
- Reconcile the client funds account in your previous system at the end of the month or the day of your choosing.
- Run a Client Account Trial Balance Report from your previous system.
- Locate the matter balances from the report at the end of the month, and continue to Step 2.
Tip: Individual matter balances from the end of the month will help with accurate receipts in Clio. If you cannot locate the appropriate report, contact your previous system support team to ensure you export the correct balances.
Step 2: Record existing matter client account balances
Once you complete the client funds balance reconciliation in your previous system, you will need to create a new receipt in Clio for each matter listed on the report to record the balance.
- Go to Accounts and select your Client Funds Account.
- Click Funds in and complete the required information in the modal:
- Date: Enter the end date of your last reconciliation.
- Payment type: Select EFT.
- Received from: Enter the client's name.
- Select the appropriate Client and Matter.
- Amount: Enter the amount from the Trial Balance Report.
- Description: Enter "Balance brought forward from [previous system]".
- Click Record transaction.
Step 3: Reconcile and review
The reconciliation process at this stage is optional. While not required, we suggest reconciling the closing balances from your previous system to match the opening balances in Clio Manage. Learn how to do the first reconciliation on the client account here.
- For the opening date, use the closing date from your reconciliation in your previous system.
- Use an opening balance of 0 and closing balance that matches the closing balance from your reconciliation in the previous system.
Tip: You can generate a Trial Balance report in Clio if you need to cross reference the balances recorded in step 2 with the balances from your previous system.
Important: If there are any uncleared payments not included in the reconciliation from your previous system, record them as new Funds in transactions using the original transaction date. You can use “Uncleared transaction brought forward from [previous system]” for the description.
Perform client funds account reconciliation
Client funds account reconciliation is an essential part of working with client funds. Clio Manage makes it easy for you to verify that your client funds ledger in Clio matches your bank account statement, helping you maintain compliance. Make sure that you regularly perform reconciliations according to compliance requirements applicable to your region.
Learn more about Client Funds Reconciliation in Clio.