Trust Account Management

Trust account management is the process of tracking client funds given in trust separately from your law firm's operating funds. If your firm accepts trust funds, there are industry rules that you need to follow when managing these funds in order to remain compliant. Clio can help you do everything from creating and retaining trust funds to using trust funds to pay client invoices and disbursing funds in accordance with industry rules. Learn more about Client Funds Account Compliance.

Create trust accounts

Before creating a trust request and accepting payment, you will need to create a trust account in Clio Manage where the paid trust funds will be stored.

To create a trust account:

1. Go to Accounts.
   • If this is the first account you are creating, you will first have to confirm your compliance region. The compliance region field will be preselected to the region as per your firm’s address. Click Confirm & create a bank account to confirm your compliance region. If you are migrating from a previous practice management 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.
2. Click New account.
3. For the Account type, choose Trust Account.
4. Enter the remaining details.
5. Click Create New Bank Account.
6. Optional: If you have Clio Payments enabled, click Connect to payments to accept debit and credit card payments.
   • Enter your bank account numbers for this bank account, and then click Connect bank account.

Create trust requests

In Clio Manage, you can create trust requests to collect initial trust funds deposits or retainers from your clients for their matters, or to add more trust funds to a matter if the trust funds reach a minimum threshold. Trust requests do not include any time or expense activities. You can create a trust request from the matter's Dashboard, the main Billing tab, or the global Create new menu.

Protect trust funds

Managing trust funds comes with numerous industry rules. Your firm may need to have strict control over trust funds for various reasons, such as covering counsel fees, undertakings, expenses, or future invoices. In Clio Manage, you can protect specific client fund amounts for future use. Protected funds will be reduced from the overall matter funds balance and only available for future fees and expenses.

Step 1: Enable the protected funds setting

Before getting started with protected trust funds, an administrator on the firm account needs to enable the setting. 

1. Go to Settings > Billing.
2. Select Protected funds.
3. In the Protected funds section, turn the toggle to the on position.

Step 2: Add and manage protected funds

• If you have Accounts permissions, you can add, edit, or delete protected funds, or apply protected funds to invoices.
• If you do not have Accounts permissions, you can view protected funds, increase the amount of existing protected funds, and send a request to a user with Accounts permissions to release protected funds back to the client or to pay an invoice.

Users with Accounts permissions

If you have Accounts permissions, you can add, edit, or delete protected funds from a matter's Dashboard. Once added, you can apply protected funds to an invoice from the main Billing tab or the Bills subtab in a contact or matter. Any changes made to protected funds will be recorded in the matter's Timeline card in the matter's Dashboard. The record will show which user made the change with a date and time stamp.

Note: You can only protect funds if your client has available trust funds to protect. You can add trust funds by creating a trust request and recording a payment. 

Add protected funds to a matter

1. Go to a matter.
2. In the Dashboard subtab, open the Financial card and go to the Matter trust funds box.
3. If this is the first time you are protecting funds for this matter, click Add next to Protected funds. If you already added protected funds to this matter, click the protected funds total and then click Add funds.
4. Enter the amount that you want to protect and add a protected fund name for easy future reference.
   

   Tip: You can include the reason for protecting the fund in the name.

5. Click Add.
   • The amount of the trust funds that you protected will be subtracted from the total amount of available trust funds on the matter You can view the protected funds by clicking the amount of the protected funds in the Available trust funds box.

Edit protected funds

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds.
4. Click the pencil icon to edit a protected fund.
5. Make any changes to the amount or fund name and then click Save changes.

Delete protected funds

Important: Deleting protected funds will not delete them from the matter but will instead remove the protection on the fund amount and return the amount to the matter trust funds. The amount that was deleted or unprotected will then return back to the available matter client funds balance.

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds.
4. Click the trash can icon to "unprotect" a fund amount.
5. Click Delete to confirm.

Apply protected funds to invoices

1. Go to the main Billing tab or the Bills subtab in a contact or matter.
2. Find the invoice to which you want to apply the protected funds. You can use the quick filters to find invoices that have not been paid yet or the keyword search box.
3. Click the down arrow next to Send and then select Apply protected funds.
4. Select the destination account for the protected funds to move into, the name of the protected fund that you want to use to pay the invoice, and the payment type.
   • If the client has only one protected fund, the selection will be locked in and cannot be changed because there are no other protected funds.
5. Click Apply funds.

Users without Accounts permissions

If you do not have Accounts permissions, you cannot add protected funds, but you can view all protected funds for a matter, edit the reason for currently protected funds, and increase the amount of the protected fund. Any changes made to protected funds will be recorded in the matter's Timeline. The record will show which user made the change with a date and time stamp.

You can also send a request to users with Accounts permissions to release protected funds back to the client or request that protected funds be used to pay an invoice. Once you send the request, all users with Accounts permissions will receive an email about your request.

View protected funds

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds to view all protected funds for the matter.

Edit protected funds amount and reason

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds.
4. Click the pencil icon representing Edit to edit a protected fund.
5. Increase the amount or change the reason, and then click Save changes.

Send request to release protected funds

1. Go to a matter.
2. In the Dashboard subtab, open the Financial section.
3. In the Matter trust funds box, click the protected funds total next to Protected funds.
4. Click Request fund release.
5. Select the protected fund and the reason for requesting the release.
   • Under Reason, select Release back to the client or Pay an invoice. If you selected Pay an invoice, you will also need to select the invoice that should be paid.
6. Optional: Enter a memo to add more details about the release request.
7. Click Request fund release.

Sort and filter trust requests

Once a trust request is created, you can find it in the main Billing tab or the Bills subtab within a matter or contact. The trust request is differentiated from normal bills when viewing the bill Id. The bill Id will have the word "Trust" written in parentheses next to the bill Id number. To view only trust requests:

1. Go to Billing.
2. Select the All subtab.
3. Click Filters.
4. Optional: Select the matter or contact.
5. For the Type field, select Trust.
6. Click Apply filters.

Edit trust requests

You can only edit a trust request if it is in draft and the trust request approval process has not been skipped. Generated trust fund requests in draft have limited edit functionality compared to generated bills in draft. To edit a generated trust request:

1. Go to Billing or the Bills tab in a contact or matter.
2. Click the Draft subtab.
3. Click Edit.
4. Make your changes.
5. Click Save trust request.

Approve trust requests

When a trust request is created and you do not check the box to skip the trust request approval process, the trust request can be found in the Draft subtab in the main Billing tab. While in draft, you can edit the trust request and send it for approval, and approve the trust request. Once approved, you can accept payment for the trust request.

Send trust requests

Once a trust request is approved, you can send it to the client. You can also send the trust request to other related contacts.

1. Go to Billing or the Bills tab in a contact or matter.
2. Click the Unpaid subtab.
3. Click Send.
4. Review the recipient's email, select the appropriate message details (e.g., the trust template) and make any changes if necessary, and select the send method. Learn more about sending bills and bill options.
5. Click Send trust request.

Delete trust requests

If a trust request is still in draft, you can still delete the request. A trust request that has been approved but does not have a recorded payment can only be voided.

1. Go to Billing or the Bills tab in a contact or matter.
2. Click the Draft subtab.
3. Click the down arrow next to Edit and select Delete trust request. You can also view the trust request, click More actions, and select Delete.
4. When the warning prompt appears, click Delete trust request.

Void trust requests

Follow these steps to void an approved and unpaid trust request:

1. Go to Billing or the Bills tab in a contact or matter.
2. Click the Unpaid subtab.
3. Click the down arrow next to Edit and select Void trust request. You can also view the trust request, click the More actions dropdown, and select Void.
4. When the warning prompt appears, click Void trust request.

Record payments on trust requests

You can record a payment as a direct payment in Clio Manage once payment is received. Due to regulations for trust fund management, you will be unable to edit or delete a payment recorded for a trust request.

Follow the steps below to record a trust request payment.

1. Go to Billing or the Bills tab in a contact or matter.
2. Optional: Select the Unpaid subtab.
3. Click the down arrow next to Send and click Record payment. You can also click Record payment in the upper right corner
4. Complete the details.
5. Click Record payment.

Record new transactions (receipts)

If you need to record a new trust funds transaction without creating a trust request, you can do so from within the contact or matter's Transactions subtabs or from the main Accounts tab. When you receive trust funds in the form of a cheque or cash, compliance rules require that you also create a deposit record at the time that you receive these funds. Learn more about this requirement below.

Send, view, and download trust receipts

You can view or download any recorded trust receipt. You can also send an email of the receipt to your client.

1. Go to Accounts.
2. Select the trust account where the funds are held.
3. Select the Receipts subtab.
4. Find the trust receipt record that you want to view.
5. Send, view, or download the receipt.
   • Send: Click Send, choose the client and send method, then click Send receipt.
   • View: Click the down arrow next to Edit and select View.
   • Download: Click the down arrow next to Edit and select Download to download a PDF copy to your computer. You can also download the receipt while viewing it.

Create, view, and download trust deposits

When you receive trust funds in the form of a cheque or cash, compliance rules require that you create a deposit record at the time that you receive these funds. Clio helps you to stay compliant by allowing you to create a deposit record quickly with all the information that is required to ensure compliance and a proper audit trail. You will be required to provide a copy of this record to your banking institution at the time that you physically deposit the funds into your (trust) account, so Clio also makes it easy for you to download this record from Clio.

Transfer trust funds

Trust funds added to a matter can only be applied as payment for bills associated with that matter. However, you are able to transfer funds from one matter to another and then use those funds for the matter to which the funds were transferred.

1. Go to Accounts.
2. Select the client account where funds are stored.
3. Click Transfer funds.
4. Choose the relevant option for transferring funds between matters (i.e., Between bank accounts, Between matters, or Between matters of different clients).
5. Select a client, matter, payment source, destination, amount, and description.
   Note: For options to appear in the Source field (where trust funds should come from), a client must have a matter with available trust funds.
6. Click Record transfer.

Release trust funds

If you need to return any remaining trust funds to your client or if you need to adjust mistakenly applied trust funds, you can disburse these funds back to the client.

1. Go to the matter or contact, depending on where the trust funds are stored.
2. Click the Transactions subtab.
3. In the Transactions table window, use the down arrow to select the client's trust account.
4. Click Disburse funds.
5. Enter the amount that you are releasing to the vendor and complete the remaining fields.
   • Destination: Use this field to enter non-personal information about the transaction (e.g., information about a bank account).
   • Payee: Use this field to specify who is receiving the funds.
   • Payment method: Use this field to enter information about how the transaction is completed (e.g., cash payment or bank transfer).
   • Description: Use this field to enter information about the purpose of the transaction (e.g., "Payment for bill [bill number]", "Trust retainer for [name]").
6. Click Record transaction.

Pay from trust funds and view transactions

You can use funds held in trust accounts to pay bills and cover third-party expenses related to a matter. You can pay third-party bills from trust funds by recording a trust payment directly to the third party or by recording the expense in Clio, generating a bill, and then applying trust funds to the bill. Once the transaction is recorded, you can view its details from the trust account. Each transaction will have its own automatic receipt number under the Transactions column of the receipts table.

Void cheque payments

In order to comply with trust account compliance rules, you are required to record all cheques. If a cheque is damaged and you need to void it, you can record a transaction of the voided cheque. 

1. Go to Accounts and select the appropriate trust account.
2. Click New payment.
3. Under Payment type, select Cheque and add the reference number for the damaged cheque.
4. Select the box next to Void Cheque.
5. Under Reason, enter the reason why you are voiding the cheque.
6. Click Record transaction.

Cancel transactions

If you record a trust transaction incorrectly, you cannot edit the transaction. You can correct an error on a recorded trust transaction by cancelling the incorrect transaction and creating a new trust transaction. Once cancelled, you will see a new transaction with the same receipt number as the original transaction. This transaction will show as a debit (funds out) and have a description that specifies it is a reversal of the original transaction.