Clio Accounting: Funds out—Hard Costs

In Clio Accounting, you can view all of your vendor bills, expenses, and hard costs from the Funds out tab. This articles covers what you need to know about hard costs. Refer to Clio Accounting: Funds out—Vendors and Operating Expenses for information about those types of funds out transactions.

View hard costs

In Clio Accounting, in the Funds out tab, the Hard costs subtab provides an organized overview of all billed and unbilled hard costs entered in Clio Manage. Your view of the Hard costs table include:

• The total dollar amount and number of hard cost entries in Clio Manage that has not yet been invoiced.
• Individual line items with the date the hard cost was created, the associated client and matter, the invoice number (if invoiced), the vendor, the transaction's status (Created, Matched, Reconciled, or Paid (for checks created)), and the amount. If you matched the hard cost to a transaction in your bank account, the bank account associated with the entry will also be shown.

Hard costs are also tracked in the Hard Cost Clearing account—for those amounts that your firm has recorded as payments to a vendor, and in the Client Advanced Costs account—as money the client owes your firm. When you match a hard cost recorded in Clio Manage to an actual transaction from your bank feed, the amount in the Hard Cost Clearing account is netted out (that is, an entry is added to reflect that the recorded hard cost payment has been realized), while the corresponding payment amount is recorded in the account from which the payment was made.

Match hard costs

As part of the regular bank accounts review (categorize and match) process, you will need to match recorded hard costs to their corresponding Funds out transaction in your bank feed in Clio Accounting. Learn how to match transactions to hard costs.

Record hard cost vendor payments

In Clio Accounting, you can record an entry anytime you make a payment to a vendor that is related to hard costs. Timely record-keeping ensures that your accounting records stay up-to-date.

If you previously connected your bank accounts to Clio Accounting or if you regularly import bank files to Clio Accounting, you can wait for payments you made to a vendor to reflect in your bank records, after which you can review your records to match hard costs recorded in Clio Manage with your bank transactions. A potential challenge with this approach is that you may have to wait for the vendor to process your payment before you can review the bank transaction. If you regularly use payment methods that take time to process (e.g., sending checks), it may be preferable to record the payment made to a vendor for hard costs in Clio Accounting. Doing so allows you to track the payments you initiate in a timely manner without having to rely on the vendor to accept or process your payment. In addition, this process makes it easier to track a single payment made to a vendor intended to cover a consolidation of the hard costs associated with that vendor. When making a payment to a vendor, record a vendor payment in Clio Accounting as follows:

1. Click the global Add transaction button.
2. Click Hard cost vendor payment.
3. Select the account the payment is from, the payment date, the payee or vendor (optional), a memo (optional), and an attachment (optional).
4. Using the checkboxes, select the relevant transaction(s) recorded in Clio Manage related to the payment.
5. Optional: If there is a need to adjust the hard cost amount, click Add transaction below the transactions table on this page to enter details about an adjustment. For example, if a vendor requires a processing fee on top of the amount paid to them, you can add the amount, select the relevant category from your chart of accounts, and fill in the remaining details. A helpful description can help you to later understand these adjustments.
6. Click Add payment.

This payment is logged in the ledger of the payment account you selected and the Hard Cost Clearing ledger.

Understand hard cost vendor sync

Once you enable hard cost tracking, vendor information for hard costs can sync between Clio Manage and Clio Accounting. Any contacts you select or create for hard costs in Clio Manage will also sync with Clio Accounting.