Xero and Clio

Xero is a cloud-based accounting software. With Clio’s integration with Xero, you can sync your Clio contacts, time and expense activities, bills, credit notes, interest, and Clio Payment transactions to Xero for accounting purposes.

Integration at a glance

Clio's integration with Xero allows you to integrate your business accounting with Xero. During set-up, contact and bank account data export automatically, and you can customise your sync. Below, you can review how key data flows depending on your account settings.

Bidirectional data flows between Clio Manage and Xero

1. In Clio Manage, create or edit a contact.
   • Contacts are synced to Xero once they are associated with approved bills in Clio. Updates to contacts are bidirectional.
2. In Xero, edit a contact.
   • Contact is updated in Clio.
3. In Clio Manage, record a disbursement expense.
   • The expense is tracked in Xero as a "spend money" transaction in Xero.
4. In Clio Manage, approve the bill.
   • The bill is synced to Xero. If you uncheck Only sync bills after they are approved in Clio during set-up, all Clio invoices sync to Clio.
5. In Clio Manage, edit an approved bill.
   • The bill is updated in Xero.
6. In Xero, edit a synced bill.
   • The bill is updated in Clio (if bidirectional sync is enabled).
7. In Clio Manage, pay the bill.
   • The bill is marked as paid in Xero, and the income is recorded in your Chart of Accounts.
8. In Xero, pay a synced bill.
   • The bill is marked as paid in Clio.

Set up integration

To sync data between Clio and Xero, you first need to connect the two platforms. Once the integration is established, data will sync automatically. This guide will walk you through setting up the integration, configuring the sync for bills and payments, and syncing disbursement expenses.

To start the initial sync: 

1. Go to Settings > Bill Syncing.
2. Click Connect next to Xero.
3. Click Link Xero Account.
4. Log in to Xero and authorise the integration.
   • Contacts sync automatically when you link your Xero account to Clio.

Set up bill any payment sync

Configure the sync settings to sync bills, payments, and entries between Clio and Xero. You can choose which bills to sync, how line items on that bill are categorised in Xero, and whether to sync edits between the platforms. Once set up, Clio will sync updates approximately every 15 minutes.

1. 1. 1. Go to Settings > Bill Syncing > Xero.
      2. Check the box for Sync bills from Clio to Xero. 
         • Optional: Uncheck Only sync bills after they are approved if you want to sync draft and voided bills.
      3. Select the Xero accounts for time entries, expenses, interest, and credit notes.
         
         • Optional: Before set up, if you want detailed categorisation, go to Activities > Manage Categories in Clio, and create or edit a category. Assign a Xero account code to the category.
      4. To sync payment transactions, select a Xero bank account under Match Clio payments to Xero bank account.
         • Bank accounts must have unique codes in Xero to sync with Clio. Learn more about setting up unique codes here and about Xero's unique codes and chart of account components here.
      5. Optional: Enable Sync bill updates from Xero to Clio to reflect updates from Xero, including payments, back to Clio, and select a bank account. 

         Note: The Xero integration sync respects the following Clio bill settings: Allow edits on approved bills (Billing Settings) and Only sync bills after they are approved (Xero Sync settings).

      6. Select the date range for bills to sync from Clio to Xero.
      7. Click Update Sync Settings.

Understand disbursement expenses sync

Disbursement and recovery expense tracking is essential for law firms to classify expenses accurately, which is important for business intelligence, compliance with audits by law societies or bar associations, and tax reporting. The section below will help you understand billable expenses and ensure accurate data.

Disbursement

Disbursements are expenses paid on behalf of a client to a third-party vendor. Examples include:

• Court filing fees
• Translator fees
• Medical records

Anticipated disbursements

Anticipated disbursements are expenses you can track in your Clio Activities. These expenses sync Xero with a bill and appear as a credit in the Xero Cost of Goods Sold account until linked to a payment from your bank account to the third-party vendor.

 Expense recovery

Recoveries are indirect expenses that do not involve payments to third-party vendors. Examples include:

• Photocopying costs
• Postage fees

Set up disbursement sync

You can enable or disable disbursement tracking in Clio to meet your firm's accounting needs. When enabled, categorise all new expenses as disbursements or recoveries. If you disable this feature, existing expenses will remain unchanged, but future expenses will default to generic expenses without classification

Disbursements in Clio sync to Xero as "spend money" transactions. Key fields to for spend money transactions in Xero include:

• • Vendor: Ensure the Vendor field is completed when creating the expenses in Clio.
  • Amount: Enter the correct amount for the expense.
  • Account: Assign the correct Xero account for tracking the expense

To enable or disable the disbursement sync:

1. Go to Settings > Bill Syncing > Xero.
2. To enable, confirm the box for Sync bills from Clio to Xero is checked.
3. Under Sync Disbursement Expenses, check the box for Sync Hard Cost Expenses.
4. Select a date for when disbursements should sync from Clio to Xero, the disbursement expense account in Xero, and the Xero account for the bank account.
5. Optional: Select Sync tax data on disbursement to Xero Spend Money Transaction

   Note: Firms in AUS, UK, NZ, or South Africa can enable sync tax data on disbursement to Xero Spend Money Transaction. Clio will map tax rates (either primary or secondary) to the set default tax rates in Xero.

6. Click Update Sync Settings.

Sync tax data on disbursements 

Firms in Australia, the UK, New Zealand, or South Africa can sync tax data on disbursement to Xero Spend Money Transaction. Clio will map tax rates (either primary or secondary) to the following default tax rates in Xero.

Manage credit notes and VAT

In Clio Manage, a credit note or a write-off is tracked as a non-revenue-generating payment. In Clio, VAT charges apply to the total bill before deducting a credit note or write-off. Before you can sync credit notes to Xero, you need to select an account to accept the payment. You can track credit notes in Xero in either a Revenue or Asset account, depending on the mapping with your Xero account.

To properly reflect VAT, you can edit the credit note in Xero to be tax-inclusive or match credit notes to an Xero account with a tax rate of 0%.

View sync errors

You can view sync errors, including disbursements, contact, and bill sync errors, on the Xero settings page in Clio Manage. Similar errors will be grouped together. You can access the relevant records by clicking the link below the error. Where possible, the error message will tell you the source of the issue and give advice on how to fix the error.

1. Go Go to Settings > Bill Syncing > Xero.
2. Select the Status tab.
3. Scroll to Sync Failures to view grouped errors.
4. Use the links provided to address the issues in Clio or Xero.
5. Optional: Set up email notifications for sync errors under Notification > Settings > Integrations to stay updated on sync issues.

Perform client funds reconciliation

Due to limitations in Xero, client funds account transactions cannot sync from Clio to Xero. To perform client funds account reconciliation, you can generate the client funds ledger, client listing, and bank account activity reports in Clio and then compare the amounts to your bank statement or the information in Xero.

1. In Clio Manage, go to Reports > Reports.
2. Click Client under Categories.
3. Select the Client ledger report.
4. Choose your parameters
5. Select Generate report.
6. Repeat steps 2, 4, and 5 for the client funds ledger and bank account activity reports.
7. Go to Xero and compare the amounts.