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.
Set up integration
Before syncing data between Clio and Xero, you will need to establish a connection between the two platforms. Once set up, your data will sync automatically. This section will guide you through the initial setup process, configuring the sync for bills and payments, and setting up the hard cost expense sync.
Note: You can only connect Xero with Clio if you have an Xero subscription and account.
Important: Only the fields available in both Clio and Xero will sync. Xero fields, like Account Code, Tracking Categories, and Tax Inclusive/Exclusive, are not supported and can be overwritten during the sync. You can learn more about these fields below.
Contact and bill syncing for bills generated in Clio are bidirectional. You can make changes from Xero or Clio, which sync every five minutes. The bank accounts sync is one-way from Clio to Xero. Changes to an account will need to come from Clio.
To start the initial sync:
- Go to Settings > Bill Syncing.
- Click Connect next to Xero.
- Click Link Xero Account.
- Log in to Xero and authorize the integration.
Set up bill and payment sync
Once Xero is integrated, you will need to configure the sync settings in Clio to ensure your bills, payments, and entries sync correctly between Clio and Xero. You can choose which bills to sync and how they are categorized in Xero. You can also enable edits in Xero to sync back to Clio, ensuring that updates in Clio do not overwrite changes made in Xero.
During this initial setup, all approved bills in Clio sync to Xero, and all future edits, payments, or credit notes from Clio will be updated every five minutes. Any edits in Xero made to Clio bills also sync every five minutes. You can also void or delete unpaid bills in Clio, and the bill state will update in Xero.
Important: Bills generated in Xero cannot be edited from Clio, and any data in fields not in Clio will not sync to Clio.
Note: Historical bills may appear mismatched if Xero-to-Clio sync is enabled for the first time after previously syncing bills from Clio to Xero. Clio will update both systems once these bills are adjusted in Clio or Xero. If you have sync errors, you can ignore them or manually adjust the bills to match both systems.
- Go to Settings > Bill Syncing > Xero.
- Check the box for Sync bills from Clio to Xero.
- Optional: By default, only approved bills will sync to Xero. To sync all bills in all states (drafts, pending approval, voided, deleted, unpaid, and paid), uncheck the box to Only sync bills after they are approved.
- Select the appropriate Xero account for time entries, expenses, interest, and credit notes. These entries will be imported into the selected account.
- Clio will only recognize a Xero account using the Xero account code. You can configure account settings in the Xero platform in your chart of accounts. Consult your accountant if you have questions about which accounts you should link to Clio.
- To sync payment transactions, select a bank account under Match Clio payments to Xero bank account. Select None if you do not want to sync any payments to Xero.
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Optional: If you would like updates made to bills synced into Xero to sync back into Clio, including payments from Xero to Clio, select Sync bill updates from Xero to Clio and select a bank account under Match payments in Xero to Clio bank account.
Note: This Xero bill sync setting respects Clio bill settings, Allow edits on approved bills (Billing Settings) and Only sync bills after they are approved (Xero Sync settings).
- Select the date range for when bills should sync from Clio to Xero.
- Click Update Sync Settings.
Understand disbursement and expense recovery sync
Disbursements and expense recoveries are 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.
Tip: To organize and track your firm's expenses, you can create expense categories with a preset rate to use during expense creation. Learn more about activity categories here.
- Disbursements
- These are expenses paid on behalf of a client to a third-party vendor, such as court filing fees, translators, or medical records. Hard costs are referred to as disbursements in the EU and the UK.
- Anticipated disbursements
- These are estimated vendor expenses recorded in your Activities. These expenses sync Xero once a bill is generated in Clio Manage. The expense will show as a credit in the Cost of Goods Sold in Xero until it is linked to a payment from your bank account to the third-party vendor.
- Expense recoveries
- These expenses are not directly related to payments made to third-party vendors, such as photocopies or postage.
Note: Before syncing with Xero, you will need to enable the hard cost and soft cost recoveries feature in Clio and ensure to enter a value in the Vendor field when creating disbursements. Learn more about enabling this setting here and creating disbursement expenses here.
After you record an expense in Clio, Xero automatically records a "spend money" transaction to record billable expenses. Key fields you can use to help record a spend money transaction are as follows, which must be accurately entered to ensure correct accounting. Learn more about "spend money" transactions in Xero here.
Field | Description |
---|---|
Item (optional): | Select an existing inventory item or add a new one. |
Amounts are: | Use this field to account for sales tax, and select Tax Inclusive to include tax in the total. Select Tax Exclusive does not include tax in the total. |
Qty: | The quantity of the item you want to expense |
Unit price: | The dollar value of a single item. |
Account: | Use this field to map transactions to an existing account or add a new account to your chart of accounts in Xero. Bank accounts must have a code to appear in the dropdown. |
Tax rate: | You can use this field to record the tax on the transaction. This field is only required if you have entered data in Amounts. |
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.
If you create a disbursement and select Apply primary and secondary tax or Use tax applied to bill, or a tax rate is not available in Xero, the disbursement will still sync, but will not include any tax information.
Note: Your firm country will need to be set to AUS, UK, NZ, or South Africa to Enable sync tax data on disbursement to Xero Spend Money Transaction.
Country | Disbursement tax value (Clio) | Tax Type (Xero) | TaxName (Xero) |
---|---|---|---|
South Africa | 15% | INPUT3 | Standard rate purchases |
Australia |
10% |
INPUT | GST on Expenses |
UK | 20% | INPUT2 | 20% (VAT on Expenses) |
New Zealand | 15% | INPUT2 | GST on Expenses |
Sync disbursements and expense recoveries
When configuring the integration's settings in Clio, you can enable the automatic sync of disbursements and expense recoveries into Xero. This sync is one-way, meaning that changes in Xero will not reflect in Clio, but changes in Clio will update Xero.
Tip: When creating a category, select UTBMS as the type to integrate UTBMS codes with expense categories. Learn more about UTBMS codes here.
Important: When creating disbursement expenses, the vendor field must be filled out to comply with Xero's "spend money" transaction requirements. This field is only mandatory when disbursement cost syncing is enabled.
Only users with administrative permissions can enable or disable the tracking of disbursements and expense recoveries in Clio. Once set up, Clio will sync to Xero approximately every 15 minutes. Updates made to disbursements in Clio will be reflected in Xero unless the transaction has been reconciled in Xero. If a disbursement is deleted in Clio before the next sync, it will not be reflected in Xero. If you delete a disbursement after the sync, you will need to delete it manually in Xero.
- Go to Settings > Bill Syncing > Xero.
- Ensure the Sync bills from Clio to Xero box is checked.
- Under Sync Hard Cost Expenses, check the box for Sync Hard Cost Expenses.
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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.
- All disbursements created on or after this date will sync to Xero.
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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.
- Click Update Sync Settings.
Toggle disbursements and expense recoveries sync to Xero
If you disable disbursements and later turn them back on, the expenses will return to their original classifications. When enabled, previously created expenses remain unchanged, but all new expenses must be categorized as either disbursements or expense recoveries. If disabled, all expenses will revert to generic expenses, and future expenses will not require classification as hard or soft costs.
Note: Only users with administrative permissions can enable or disable the tracking of disbursements and expense recoveries in Clio.
- Go to Settings > Billing > Expenses in Clio.
- Toggle the settings on or off based on your firm’s needs.
- Ensure the Sync bills from Clio to Xero box is checked. Under Sync Hard Cost Expenses, check the box for Sync Hard Cost Expenses.
- 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.
- All disbursements created on or after this date will sync to Xero.
- Click Update Sync Settings.
View sync errors
You can view sync errors, including disbursements and bill sync errors, on the Xero settings page in Clio Manage.
- Go to Settings > Bill Syncing > Xero.
- Scroll down to Sync Failures (under Sync Status) to view errors.
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.
Tip: Clio offers total client funds account reconciliation right in Clio Manage. Learn more here.
- In Clio Manage, go to Reports > Reports.
- Click Client under Categories.
- Select the Client ledger report.
- Choose your parameters
- Select Generate report.
- Repeat steps 2, 4, and 5 for the client funds ledger and bank account activity reports.
- Go to Xero and compare the amounts.