Reconciliation is the process of comparing records to identify any discrepancies between them and check that your firm's records are correct. When there are no unexplained differences, the record is reconciled. Reconciliation is a key part of preventing fraud and maintaining regulatory compliance, and should be performed on a regular basis depending on your jurisdiction. Reconciling your bank accounts is a critical part of compliance that all firms need to do. If your firm maintains and uses trust accounts, trust account reconciliation is equally, if not more so, important.
This feature is just one component of Clio Accounting. Learn more about the other features by reading the articles listed below. We recommend starting with Clio Accounting: Basics and Guidelines to Get Started and routinely reviewing the recommended guidelines list to stay on top of your accounting and bookkeeping.
Operating account reconciliation
In Clio Accounting, operating accounts undergo two-way reconciliation, where you compare bank records to corresponding ledger accounts (client transactions grouped by each client). When there are no unexplained differences, the record is reconciled. Once reconciled, you can view summary reports or void reconciliations.
Note: You should reconcile your operating accounts after doing bank feed matching and ensuring that all transactions on your bank statement have corresponding records in Clio Accounting.
Tip: Reconciling your accounts monthly is recommended. Depending on your jurisdiction, you may need to reconcile accounts monthly or quarterly, but checking more often is recommended—this way, you have less transactions to check at one time, making it easier to spot errors. Doing regular bank reconciliations can also help you catch fraud and errors early on and within enough time for recourse.
- Go to Banking and click the three vertical dots (more icon) for the account you would like to reconcile. Select Reconcile now. Alternatively, you can go to Chart of accounts, select the name of the bank account, and click Reconcile.
- Complete the details depending on whether this is your first reconciliation in Clio Accounting or a subsequent reconciliation.
Tip: You can align your reconciliation periods with your bank statement(s) to simplify the process
- First reconciliation: Enter the Start date and Start balance from your statement. The End date is the last day of the reconciliation period, and the End balance is the balance on the end date. Refer to your statement for the End date and End balance.
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Subsequent reconciliation: The Start date is automatically set to the day after your last reconciliation's End date, and the Start balance is automatically set to the end balance from the previous reconciliation. Enter the End date as the last day of the current reconciliation period, and the End balance as the balance on the end date. Refer to your bank statement for the End date and End balance.
Note: If you already started a reconciliation that you’ve not completed, you will be notified and redirected to the Chart of accounts. Click Continue reconciliation for the relevant account.
- Review the three sections at the top and the table at the bottom to check if your accounts balance.
- Bank records: This shows the information you provided in the previous step. The Bank ending balance should match the Clio ending balance in the Clio Accounting records section.
- Clio Accounting records: This shows the records in Clio Accounting. The account is reconciled when the Clio ending balance matches the Bank ending balance in the Bank records section.
- Difference: This section will show the difference between the ending balances for your bank records and Clio Accounting records. The ending balances will need to be $0 to reconcile the account.
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Clio Accounting records table: This table shows individual records that you check or uncheck to include or exclude for the reconciliation period.
- Exclude (uncheck) transactions that do not have a corresponding entry in your bank account statement.
- As you check and/or uncheck transactions, the amount for the difference will update accordingly.
- When the difference is $0, click Finish.
- If there are any uncleared transactions that you did not include in your reconciliation, a modal with a list of these transactions will appear. The list of uncleared transactions should include only those transactions that have been recorded in Clio Manage but that have not yet cleared through the bank (e.g., a check deposited on October 31st may not appear on the October bank statement since it can take a few of days for the deposit to be processed). Any other transactions should be reconciled before finishing the reconciliation. If there are no items on this list that should not appear, click Finish.
The reconciliation report shows a summary of ledger and account balances, cleared transactions and uncleared transactions, and bank charges and bank interest. You can click Choose Files in this section to upload a copy of the relevant bank statement(s).- Cleared transactions: This section shows some of the individual funds in and funds out transactions in Clio Accounting that also appeared and matched on the bank statement.
- Uncleared transactions: This section shows some of the details of individual funds in and funds out transactions recorded in Clio Accounting that have not yet cleared through the bank. If you have uncleared transactions in this reconciliation period, you would want to review them in the next period.
- Optional: Click the Details tab to see a comprehensive list of every transaction included in the reconciliation.
- Optional: To save a digital copy of the reconciliation summary or details on your computer, click Print to PDF from the relevant tab. If you need a physical copy, you can print the downloaded PDF.
- Optional: If you need to make any changes to the reconciliation, click Void. Voiding will delete the reconciliation, which means you will need to start from the beginning again.
- Go to Reports and select Reconciliation.
- For the reconciliation that you want to view, click View to open the report.
- Go to Reports and select Reconciliation.
- For the reconciliation that you want to void, click View to open the report.
- Click Void, then confirm the action by clicking Void again.
The voided reconciliation will still appear in the list of reconciliation reports, but you will not be able to view the voided report. When you void a reconciliation, the action is permanent. However, once voided, you can simply redo the reconciliation while correcting any previous errors you may have made.
Note: Completed reconciliations are locked to protect the integrity of your trust account. If you need to make a correction to a previously reconciled period, such as editing or deleting a transaction, you will have to void the reconciliation and then redo it.
Each new reconciliation for a bank account uses information from the previous reconciliation—specifically the end date and end balance for the previous reconciliation is used to inform the start date and start balance of the new reconciliation. For this reason you will be unable to void a reconciliation for a particular bank account if there are newer reconciliations. If you do need to void a reconciliation for a particular time period, you will first need to void all reconciliations for more recent time periods.
Trust account reconciliation
In Clio Accounting, trust accounts undergo three-way reconciliation, where you compare three financial records to ensure they correspond with one another. These three records are the trust account's bank records, the client trust ledger containing all transaction entries related to a specific client, and the firm's trust ledger containing all trust transactions. When all three records align and there are no unexplained differences, the account is reconciled. In Clio Accounting, you can view summary reports of previous reconciliations or void reconciliations, if necessary.
Note: You should reconcile your trust accounts after doing bank feed matching and ensuring that all transactions on your bank statement have corresponding records in Clio Accounting.
Tip: Reconciling your accounts monthly is recommended. Depending on your jurisdiction, you may need to reconcile accounts monthly or quarterly, but checking more often is recommended—this way, you have less transactions to check at one time, making it easier to spot errors. Doing regular bank reconciliations can also help you catch fraud and errors early on and within enough time for recourse.
Clio Manage has introduced an improved experience for reconciling your trust account for ease of use. You can continue with the original experience for reconcilation, or opt for the new experience. Once you enter the reconcilliation workflow as per the instructions below, you will be able to click New Trust Reconcilliation Experience or Previous Trust Reconcilliation Experience to move between the two options.
- Go to Banking and click the three vertical dots (more icon) for the trust account you would like to reconcile. Select Reconcile now. Alternatively, you can go to Chart of accounts, select the name of the bank account, and click Reconcile.
- Complete the details depending on whether this is your first reconciliation in Clio Accounting or a subsequent reconciliation.
- First reconciliation: Enter the Start date and Start balance from your statement. The End date is the last day of this reconciliation period, and the End balance is the balance on the end date. Refer to your statement for the End date and End balance.
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Subsequent reconciliation: The Start date is automatically set to the day after your last reconciliation's End date, and the Start balance is automatically set to the end balance from the previous reconciliation. Enter the End date as the last day of the current reconciliation period, and the End balance as the balance on the end date. Refer to your bank statement for the End date and End balance.
Note: If you already started a reconciliation that you’ve not completed, you will be notified and redirected to the Chart of accounts. Click Continue reconciliation for the relevant account.
- Review the three sections at the top and the table at the bottom to check if your accounts balance.
- Bank records: This shows the information you provided in the previous step (i.e., the records from your bank). The Bank ending balance should match the Clio ending balance in the Clio Accounting records section.
- Clio Accounting records: This section shows a summary of the records in Clio Accounting for the reconciliation period. The account is reconciled when the Clio ending balance matches the Bank ending balance in the Bank records section.
- Difference: This section will show the difference between the ending balances for your bank records and Clio Accounting records. The ending balances will need to be $0 to reconcile the account.
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Clio Accounting records table: This table shows individual records that you check or uncheck to include or exclude in the reconciliation period.
- Include (check) transactions with a corresponding entry in your bank account statement and exclude (uncheck) transactions that do not have a corresponding entry in your bank account statement.
- As you check and/or uncheck transactions, the amount for the difference will update accordingly.
- When the difference is $0, click Finish.
- If there are any uncleared transactions that you did not include in your reconciliation, a modal with a list of these transactions will appear. The list of uncleared transactions should include only those transactions that have been recorded in Clio Manage but that have not yet cleared through the bank (e.g., a check deposited on October 31st may not appear on the October bank statement since it can take a few of days for the deposit to be processed). Any other transactions should be reconciled before finishing the reconciliation. If there are no items on this list that should not appear, click Finish.
- Cleared transactions: This section shows some of the individual funds in and funds out transactions in Clio Accounting that also appeared and matched on the bank statement.
- Uncleared transactions: This section shows some of the details of individual funds in and funds out transactions recorded in Clio Accounting that have not yet cleared through the bank. If you have uncleared transactions in this reconciliation period, you will want to review them in the next period.
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Optional: Click the Details subtab for a detailed view of the transactions that were included in the reconciliation period.
- This view is helpful if your firm is audited and you need to provide details that trace back the source of the transactions. Here, you can click invoice numbers to double-check details in Clio Manage. You can also view a summary of cleared and uncleared balances for client ledgers included in the reconciliation period for compliance purposes.
- Optional: To save a digital copy of the reconciliation summary or details on your computer, click Print to PDF from the relevant tab. If you need a physical copy, you can print the downloaded PDF.
- Optional: If you need to make any changes to the reconciliation, click Void. Voiding will delete the reconciliation, which means you will need to start from the beginning again.
- Go to Banking and click the three vertical dots (more icon) for the trust account you would like to reconcile. Select Reconcile now. Alternatively, you can go to Chart of accounts, select the name of the bank account, and click Reconcile.
- Complete the details depending on whether this is your first reconciliation in Clio Accounting or a subsequent reconciliation.
- First reconciliation: Enter the Start date and Start balance from your statement. The End date is the last day of this reconciliation period, and the End balance is the balance on the end date. Refer to your statement for the End date and End balance.
-
Subsequent reconciliation: The Start date is automatically set to the day after your last reconciliation's End date, and the Start balance is automatically set to the end balance from the previous reconciliation. Enter the End date as the last day of the current reconciliation period, and the End balance as the balance on the end date. Refer to your bank statement for the End date and End balance.
Note: If you already started a reconciliation that you’ve not completed, you will be notified and redirected to the Chart of accounts. Click Continue reconciliation for the relevant account.
- Review the three cards at the top and the table at the bottom to check if your accounts balance.
- Bank statement: This shows the information you provided in the previous step (i.e., the records from your bank).
- Trust account: This card shows the summary amount in the trust account based on the previous reconciliation report balance and the transactions selected from the table to include in the current reconciliation. The account is reconciled when the Trust account amount matches the Bank statement balance.
- Client trust fund: This card shows the summary amount for client-specific records from Clio Manage. The account is reconciled when amount matches the Bank statement balance.
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Records table: The table shows individual records that you check or uncheck to include or exclude in the reconciliation period. Click the Trust account card and Client trust fund card to view the relevant table of records for each.
- Include (check) transactions with a corresponding entry in your bank account statement and exclude (uncheck) transactions that do not have a corresponding entry in your bank account statement.
- As you check and/or uncheck transactions, the amount in the relevant card will updated. When the difference is $0, a Reconciled status tag will appear.
Important:- When reconciling the Trust account, trust records not associated with any client will displayed a warning icon in the Client column. You will need to locate and match these records when reconciling the Client trust fund.
- When reconciling the Client trust fund, records that were selected when reconciling the Trust account cannot be deselected.
Tip: If you are need more information to help you balance your accoubts, click Show breakdown for more details about funds in, funds, out and adjustments and/or for suggestions on why you are seeing a difference between your Bank statment amount and the Trust account amount.
- When both the Trust account and Client trust fund account is reconciled, click Finish reconciliation.
- If there are any uncleared transactions that you did not include in your reconciliation, a modal with a list of these transactions will appear. The list of uncleared transactions should include only those transactions that have been recorded in Clio Manage but that have not yet cleared through the bank (e.g., a check deposited on October 31st may not appear on the October bank statement since it can take a few of days for the deposit to be processed). Any other transactions should be reconciled before finishing the reconciliation. If there are no items on this list that should not appear, click Finish anyway.
The reconciliation report shows a summary of ledger and account balances, cleared transactions and uncleared transactions, and bank charges and bank interest. You can click Add attachments in this section to upload a copy of the relevant bank statement(s) or other records relevant to this reconciliation.- Cleared transactions: This section shows some of the individual funds in and funds out transactions in Clio Accounting that also appeared and matched on the bank statement.
- Uncleared transactions: This section shows some of the details of individual funds in and funds out transactions recorded in Clio Accounting that have not yet cleared through the bank. If you have uncleared transactions in this reconciliation period, you will want to review them in the next period.
-
Optional: Click the Details subtab for a detailed view of the transactions that were included in the reconciliation period.
- This view is helpful if your firm is audited and you need to provide details that trace back the source of the transactions. Here, you can click invoice numbers to double-check details in Clio Manage. You can also view a summary of cleared and uncleared balances for client ledgers included in the reconciliation period for compliance purposes.
- Optional: To save a digital copy of the reconciliation summary or details on your computer, click Print to PDF from the relevant tab. If you need a physical copy, you can print the downloaded PDF.
- Optional: If you need to make any changes to the reconciliation, click Void. Voiding will delete the reconciliation, which means you will need to start from the beginning again
- Go to Reports and select Reconciliation.
- For the reconciliation that you want to view, click View.
- Go to Reports and select Reconciliation.
- For the reconciliation that you want to void, click View.
- Click Void, then confirm the action by clicking Void again.
The voided reconciliation will still appear in the list of reconciliation reports, but you will not be able to view the voided report. When you void a reconciliation, the action is permanent. However, once voided, you can simply redo the reconciliation while correcting any previous errors you may have made.
Note: Completed reconciliations are locked to protect the integrity of your trust account. If you need to make a correction to a previously reconciled period, such as editing or deleting a transaction, you will have to void the reconciliation and then redo it.
Each new reconciliation for a bank account uses information from the previous reconciliation—specifically the end date and end balance for the previous reconciliation is used to inform the start date and start balance of the new reconciliation. For this reason you will be unable to void a reconciliation for a particular bank account if there are newer reconciliations. If you do need to void a reconciliation for a particular time period, you will first need to void all reconciliations for more recent time periods.