Clio Accounting: Vendors and Operating Expenses

An important aspect of running a law firm and staying on top of your books is tracking vendors and operating expenses. Vendors are people or businesses that supply products or services to your law firm, such as banks, catering companies, office supply depots, airlines, transportation services, software services, and more. Operating expenses are regular expenses that your firm pays to vendors to run your firm, such as payroll expenses, marketing expenses, IT, travel, employee related costs, and more. 

Add vendors

Your firm may pay for vendor services such as IT services, purchases, transportation costs, rent, office supplies, etc. You can add a vendor separately from operating expenses by following the steps below, or you can add a vendor while adding an operating expense as described in the Add operating expenses section. 

1. Go to Operating Expenses tab, and click New vendor.
2. The company's name is the only required field. Enter their name under Company name and then complete any optional fields relevant to the vendor.
   • The EIN (Employer Identification Number) and 1099 vendor fields are for taxation purposes. 1099 vendors are trade and non-trade individuals or companies that provide goods, services, or contract work for your firm, and where your firm does not deduct taxes from amounts paid to these vendors. If your vendor is a 1099 vendor, you will need to submit expenses for this vendor to the IRS.
3. Click Save vendor to save the vendor and close the new vendor modal, or click Save vendor and add new expense to save the vendor and create a new expense under that vendor.

Search and view vendors

When viewing a specific vendor, you can view all transactions or expenses associated with the vendor. From that page view, you can also view, edit, or delete expense transactions.

1. Go to Operating Expenses tab, and click New vendor.
2. In the Search for vendor field, enter a keyword to quickly find a vendor.
3. Click the vendor's name.

Edit vendors

1. Go to Operating Expenses tab, and click New vendor.
2. Optional: In the Search for vendor field, enter a keyword to quickly find a vendor.
3. Click Edit next to a vendor's email.
4. Make any changes and then click Save vendor.

Add operating expenses

Most of your firm's operating expenses will be added to the bank feed in the banking tab. When you pay operating expenses using a credit card, you can categorize and match service transactions once available on the bank feed. If you paid for operating expenses using non-credit card methods such as cash or check, you can manually add operating expenses in Clio Accounting. Some examples of operating expenses include payroll expenses, marketing costs, rent, IT, travel, employee costs, etc.

1. Go to Operating expenses and click Add expense. You can also click Add transaction in the Clio Accounting header and select Operating Expense.
2. Complete the required fields.
   
   • Paid from: Select the bank account for the expense.
   • Payment date: Enter the date your firm paid the expense.
   • Category: Select an expense category. The list of categories in this list is generated from your expense accounts in your chart of accounts. 
   • Amount: Total amount paid for the expense.
3. Under Attachments, click Choose Files to upload the check or receipt associated with the expense. Adding documentation to operating expenses is a recommended practice. 
4. Optional: Click Add line item to add another item if your expense fits into multiple categories. For example, you may have an expense category for tax, in which case one line item will be for the expense amount without tax and the other will be for the added tax amount.
5. Complete any other remaining fields as necessary and then click Save expense.

Filter and view operating expenses

The top sections in the Operating expenses tab show the status of your firm's operating expenses, including expenses month to date, expenses in the previous month to date, and the percentage comparison to the previous month (this allows you to compare to the current month to get an idea of how many expenses your firm has). Once expenses are added, you can click each one to get a detailed view.

1. Go to Operating expenses.
2. Click the vendor's name to view a list of all expenses under that vendor or click View next to an operating expense's name.
   • In the vendor expense list view, you can view, edit, and delete expenses. 
   • In the operating expense view, you can edit the expense and view the details entered when the expense was created.

Edit and delete operating expenses

If an operating expense has not been matched to your bank feed yet, you can completely edit all the details of the expense. If the expense has been matched, you have limited edit functionality and cannot change the amount. If you need to change the amount, you can always unmatch the expense, make your edits, and then match the expense again.

You may also need to delete duplicate operating expenses or operating expenses that were unintentionally added. You can delete any expense as long as the expense has not been matched or reconciled. Once matched, you will need to unmatch the expense before you can delete it. If an expense is part of a reconciliation, you will need to void the reconciliation before you can delete the expense. 

Understand operating expense statuses

Your operating expenses table will show all expenses added via bank feed matching or expenses added manually. For each expense, there will be an associated status. Understanding what these statuses mean can help you determine if you need to match an expense to a bank feed transaction or include it as part of a reconciliation period. An expense can have one of four statuses:

• Created: The expense was manually created but has not been matched to a bank feed transaction.
• Deposited: The expense is part of an operating deposit that has been created but has not been matched to a bank feed transaction.
• Matched: The expense was created and matched to a bank feed.
• Reconciled: The expense was reconciled.