Apply Credit Notes and Write Offs

Credit notes in Clio Manage allow you to forgive or reduce an amount owed on an approved, unpaid bill. Reducing or writing off a bill amount without deleting the bill maintains an accurate, auditable record of why a client owes less than the original invoice amount. Each credit note is a standalone document with its own sequential ID number, which you can view, download, and send to your client independently of the bill. You can credit a blanket amount across a whole bill, or credit specific time entries and expenses so that the tax on the credit note matches the tax on the items you credited.

If your client pays less than the amount due and your firm does not expect to collect the difference, you can write off the remainder at the time you record the payment. You can also apply a write off to a trust request. Writeoffs allow you to track if your client pays less than the amount due and your firm does not expect to collect the difference. You can write off a partial unpaid amount at the time you record a partial payment on a bill or trust request, or write off the full amount on the bill if the client does not pay.

It is also relevant to understand the difference between a credit note and discount and when to use which option.

Discount:

Apply Discounts to individual activities or a whole bill while the bill is in draft or pending approval. The discount applies to pre-tax amounts.

Credit note:

Apply to an approved, unpaid bill to reduce its total amount owed.

Create credit notes

You can create credit notes for a total amount on a bill or for a specific line item or line items on a bill.

• General credit note: Enter one total credit amount and Clio Manage distributes it across the bill's line items, inheriting their tax. Use this when you have agreed on a single figure and do not need to control how it splits, for example a disputed total or a post-approval discount. You can narrow which items the credit is spread across by selecting specific fee earners or an activity type.
• Line item credit notes: Choose individual line items and enter the amount to credit against each one. Use this when specific amounts must land on specific items, for example when a vendor refunds part of a disbursement and the tax credited must match that disbursement.

In Clio Manage you can create a general credit note that applies to a bill generally, for example when a client disputes the total or you want to apply a “discount” after you have approved and sent the bill.  Clio Manage distributes the credit across the bill’s line items, and calculates the tax credited from the bill’s overall tax rate. Use this option when you want to reduce the bill by an amount and do not need to control how much is credited to each line item. You can narrow which line items the credit is distributed across by selecting specific fee earners or an activity type, but you still do not control the amount per line item.

Alternatively, you can choose individual line items and enter the amount to credit against each one, for example when a vendor refunds part of a disbursement and the tax credited must match that disbursement. Crediting a line item directly credits that item’s own tax.

If a bill contains items at different tax rates, the tax credited by a general credit note will not match any single line item’s rate. Credit the line item directly when the tax credited needs to match a specific item.

In both cases, Clio creates a standalone credit note document.

View and download credit notes

To view credit notes that apply to a particular bill:

1. Open the bill, then select the Credit notes tab.
2. In the Actions column, click View, or click the down arrow and select Download.

Edit a credit note

You can edit a credit note while the parent bill is unpaid.

1. Open the bill, then select the Credit notes tab.
2. In the Actions column, click the down arrow and select Edit.
3. Make your changes and save the credit note.

Send a credit note

You can send a credit note to your client as a standalone PDF, without resending the bill.

1. Open the bill, then select the Credit notes tab.
2. In the Actions column, click Send. You can also click Send from the credit note page.
3. Review the Recipients. These are the contacts from the parent bill. Add or remove recipients as needed.
4. Optional: Clear the box for Send credit note to all recipients in one email to send a separate email to each recipient.
5. Review or edit the Subject and Body. Click Add autofill fields to insert details from the parent bill.
6. Review the email preview, which shows the credit note number, the bill it was issued against, and the credit total.
7. Click Send credit note.

Delete credit notes

Credit notes cannot be modified or transferred from one bill to another. Once applied, a credit note can only be deleted (for unpaid bills). If you need to edit the credit note, delete it and then create a new one. To delete a credit note:

1. Go to Billing or select the Bills subtab in a matter or contact.
2. Select the Unpaid quick filter.
3. Click the bill ID to open the bill. You can also click the down arrow next to Send and select View bill.
4. Select the Credit notes tab and, in the Actions column click Delete or click the down arrow and select Delete.
5. When the warning prompt appears, select Delete.

Apply a write off while recording a payment

1. Go to Billing, or select the Bills subtab in a matter or contact.
2. Select the Unpaid quick filter.
3. For a bill or trust request, click the down arrow next to Send and select Record payment. You can also click a bill or trust request ID to open it, then click More actions > Record payment.
4. Complete the fields as necessary.
   • Payment source: Select the appropriate option about the payment. Enter information about the source or destination of the payment, e.g., information about the vendor's bank account.
   • Payer: This optional field should be used if the person making the payment is not the client
5. Enter the Payment amount.
6. Check the box under Write offs. This box appears only when the payment amount is less than the bill or trust request amount.
7. Click Record payment.
8. When the warning prompt appears, select Write off and record payment.

Up next

• Apply Discounts: Reduce a bill or individual line items before it is approved.