Record and Manage Expenses

Expenses in Clio Manage help you track costs related to matters, such as barrister fees, court filing fees, and expert witness costs. By default, all expenses are recorded as standard expenses without categorisation. If your firm needs to differentiate between expenses paid to third parties (disbursements/ anticipated disbursements) and internal costs billed to clients (expense recoveries), you can enable these options in Settings.

Enable expense tracking options

By default, Clio Manage tracks all expenses as standard expenses. You can enable expense tracking options to categorise reimbursable expenses as disbursements and track anticipated disbursements before they are paid. If your firm needs to track vendor payments against recorded expenses, you can link bank transactions to standard expenses. This ensures that payments made from your operating account to third-party vendors are correctly recorded and appear in financial reports.

Record expenses as disbursements

1. Go to Settings > Billing > Expenses.
2. Toggle on Record expenses as disbursements.

Record anticipated disbursements

Once disbursements and expense recoveries are enabled, you can enable this feature to record, manage, and report on vendor expense estimates before receiving payments. Once enabled, if you turn off this feature, all existing anticipated disbursements will return to standard disbursements.

1. Go to Settings > Billing > Expenses.
   • To record anticipated disbursements, first enable Record expenses as disbursements and Link disbursements to bank transactions. 
2. Toggle Record anticipated disbursements.

Link disbursements to bank transactions

With this feature, you can link standard and anticipated disbursements to bank transactions. If your firm is located in Ireland or the UK, this feature is automatically turned on. Otherwise, if your firm is required to link transactions and disbursements for compliance reasons, you can turn this feature on by following the steps below.

1. Go to Settings > Billing > Expenses
2. To record anticipated disbursements, first enable Record expenses as disbursements.
3. Toggle Link disbursements to bank transactions.
4. Optional: Toggle Record anticipated disbursements. Learn more about anticipated disbursements above. 

Add new expense entries

In Clio Manage, you can record expenses to track costs related to a matter. You can create expenses from different areas in Clio to fit your workflow.

You can create a new expense entry from the main Activities page, the Activities tab within a matter, and the global Create new button in the top right corner of Clio Manage.

1. In Activities, click New expense.
   • From the global Create new button, select Expense entry.
2. If you previously enabled expense tracking, select the expense type and complete the required fields.
   • When recording Disbursements, enter any value up to the total value of the disbursement in the Prepayment field.
3. Under Expense category, select a pre-created category to auto-populate certain fields.
   • Learn more about expense categories.
4. Optional: If your firm uses UTBMS codes, select the relevant UTBMS expense code.
   • UTBMS (Uniform Task-Based Management System) codes help standardise expense tracking for improved analysis and billing. Learn more about UTBMS codes.
5. Under Tax rate, choose how to apply tax to the expense. 
   • No tax.
   • Primary tax, secondary tax, or both.
   • Use tax applied to invoice (this inherits the tax setting chosen when generating the bill).
     • Learn more about setting up tax.
6. Complete the remaining fields.
   • When entering the date, you can select a past, current, or future date.
7. Click Save entry.
   • Save and create another: Saves the expense and opens a new entry form.
   • Save and duplicate: Saves the expense and opens a new entry form with the same details.

Add new anticipated disbursements

You can track third-party expenses that you expect to incur but have not yet paid by using anticipated disbursements. Record these anticipated disbursements to monitor upcoming payments. To update the vendor bill status, record vendor transactions then link the transaction to disbursement. 

1. Create a new expense entry.
2. Under Expense type, select Anticipated disbursement.
3. Optional: Under Invoice Status, select if the expense is ready to be billed or included in the next bill. 
4. Click Save entry. 

Record vendor transactions

Once an anticipated disbursement has been added to a matter, you can record a transaction to pay funds to a vendor and link the disbursement to that transaction. You can manually record funds out of your operating accounts to track payments to non-clients, such as payments to vendors related to your clients. Once recorded, your operating account balance will show the deducted amount.

1. Go to Accounts and select an operating account. You can also go to the Transactions subtab in a contact or matter.
2. Click New transaction.
3. Complete the required fields.
   • Under Amount, enter the amount that will be paid to the vendor as a negative number (e.g. -200).
   • Under Date, select the transaction date.
   • Under Account, check that the appropriate operating account is selected. The funds will be deducted from this account.
4. Complete the remaining fields as necessary. Adding information to these fields can be useful when viewing transactions and when generating relevant reports.
   • Client and matter fields: You are not required to select a client or matter, but completing these fields will allow you to track which client and matter the vendor payment is connected to.
   • Source/Destination: Enter information about the payment's source or destination (e.g., the vendor's account).
   • Payer/Payee: Enter the vendor
   • Description: Enter information about the purpose of the transaction (e.g. "Payment for bill [bill number]").
5. Click Record transaction.

Record non-billable expenses

Tracking non-billable expenses can help record costs that might not be charged to a client. These expenses are automatically set to £0. For transparency, you can choose to display non-billable expenses on a bill.

1. Create a new expense entry or edit an existing expense entry.
2. Under Billable status, select Non-billable.
3. Optional: To display the non-billable expense on a bill, select Show this entry on the bill.

   Important: Non-billable expenses marked as Show on bill will only appear on bills generated using bulk billing (Billing > New bills). They will not appear on invoices generated using Quick bill.

4. Complete the remaining details and click Save entry.

Duplicate and edit expenses

You can edit and duplicate an expense activity from the main Activities page in Clio Manage or from the Activities subtab within a matter. 

Delete and recover expenses

You can delete an unbilled expense from the main Activities page in Clio Manage or from the Activities subtab within a matter and recover expenses from the Recovery Bin. You can also track deleted expenses in the Recovery Bin, a matter timeline and from the Firm Feed.

Deleted items will remain in the Recovery Bin for six months. The best practice is to ensure the item is not needed before deleting it, with the recovery bin available as a failsafe.

Link disbursements to transactions

Linking vendor transactions will update the Vendor Bill Status of anticipated disbursements. You can view the transaction showing funds out in the transactions table of your operating account, the bank account activity, client ledger and disbursement payment reports.

1. Go to Accounts and select an operating account. You can also go to the Transactions subtab in a matter.
2. Click New transaction.
3. Select the client and matter. 
4. Under Disbursement, select the disbursement that you want to connect to the transaction.
   • The dropdown will show all disbursements for the matter. Disbursements that have already been linked to transactions will show £0.
   • You are not required to pay the entire disbursement in one transaction. You can always record multiple transactions for the remainder of the disbursement amount. 
5. Complete the following required fields.
   • Under Amount, enter the amount to be paid to the vendor as a negative number (e.g. -£200).
   • Under Date, select the transaction date.
   • Under Account, check that the appropriate operating account is selected. The funds will be deducted from this account.
   • Under Invoice reference, enter the reference for the payment. This field will only appear once a matter and disbursement are selected.
6. Complete the remaining fields as necessary.
   • Disbursements: The Source/Recipient field cannot be changed. When you create a disbursement, you are required to select a vendor. This vendor is automatically added to the Source/Recipient field.
   • Anticipated disbursements: The Source/Recipient field will automatically populate with the vendor selected when creating the anticipated disbursement. If it does not automatically populate, you can select a vendor or create a new contact.
7. Click Record transaction.