In this instructional video, Linda Artisani of the Accountants Law Lab walks viewers through the complexities of law‑firm bookkeeping using Clio (and LeanLaw) alongside QuickBooks. She explains why QuickBooks‑suggested “IOLTA to operating” transfers are inaccurate for legal accounting, emphasizing the need to treat such movements as journal entries that affect both the trust bank and trust liability accounts. Artisani details the matching process required when multiple client payments are aggregated into a single bank deposit, covering undeposited funds, grouping payments, and reconciling them with journal entries. She highlights Clio’s built‑in payment system and numerous integrations (DocuSign, ShareFile, SmartVault), noting both its strengths and limitations. The video warns against redundant data entry—entering invoices and payments in both Clio and QuickBooks—and advocates for a streamlined workflow that leverages Clio’s synchronization features. Finally, she invites viewers to join the Accountants Law Lab community for deeper training, Q&A sessions, and access to recorded resources.
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Hi there, Linda Artisani from the Accountants Law Lab. This week I'm gonna talk a little bit about software, and I know I mentioned this a couple of weeks back when we were talking about different software. And I wanna talk really about mastering the art of law firm bookkeeping using Clio. So two software we use at our firm, Clio and LeanLaw. I have to say that I took to LeanLaw like it just logically made sense in my head and, Clio doesn't exactly work that way for me. I find I struggle a little bit with how the software is laid out and how to match because that's the thing I see most, more times than not with client books is that they didn't match the software right. And the one thing that they do, which I see this even in both software actually, is that they'll, QuickBooks will suggest that it's a transfer from IOLTA to Clio. To operating, and it can't be a transfer. If it's a transfer, you're not hitting the trust liability account. You're just doing a bank-to-bank transaction. I can see why the software thinks it's just a transfer, but with legal bookkeeping, you can't use transfers. Mostly because the software's gonna push over transactions in a journal entry, and that's the way that it will come across. The other issue that I have when working with lawyers is they may do their billing once a month, and they'll do all the work in Clio. They'll create their invoices. Since we're talking about Clio, they'll do all the invoicing, they'll create all the payments, and then, as they push their payments in, they'll all arrive as a— as payments to the account, and they book in line by line. So every payment's gonna come in singularly. As a journal entry to show that the money's being transferred out of trust into operating. Basically, it's going to hit the trust bank account and the trust liability account as it moves out. And then you'll see it as an invoice and you'll see it as an invoice payment. There's your two sides. So it's just like that complex— How do you do law firm bookkeeping without the software? Well, this is the stuff that the software does in the background. And one of the things that it does is it's sending over these transactions and you have to aggregate them into the right accounts to manage that. So those invoice payments, you're gonna create the invoices in Clio, the client's gonna create the payments. Those are all gonna push over as you synchronize it. And as they push over, they might push over in together or they'll push over separately. If, if they're booked to undeposited funds, they're gonna all end up in the undeposited fund account. Where the client may make a transfer for one, one amount, and it might have 6, 8, 10, 20 payments in it. They're only gonna transfer from IOLTA to operating, let's just say for example, $10,997. But that's inclusive of maybe 20 different transactions. How do you rectify and match that when Clio's shooting them all over individually? Well, you're gonna use that matching feature. So when you're starting to do this work with working with lawyers, you're going to match the transactions. You're gonna match the, the side where the money's moving out of trust. So you're gonna match that side with the journal entries, and you're gonna match all those client payments and group them to match that deposit. It's tricky work, especially if the client doesn't date everything properly. It's like, how do I figure out which ones go where? The other issue you may run into is if the client's using Clio Payments, which a lot of them are using now, it's very convenient, it's built right into the system. And I gotta tell you quite frankly, Clio is a good product. I mean, there's a lot of features in there that I often see a lot of the law firms aren't even using and they don't even realize that they're there. There's ways to do DocuSign in there, there's ways to connect your ShareFile or SmartVault to it. There's a lot of different ways to integrate 'cause Clio's been around a long time. There's a lot of software integrations in there that you may not get with other software because it's the grandpa of all the software. It's not perfect, but you just need to know how to work the system to make this stuff work. You need to match these transactions. Don't go in and click and put them all, those banking, all the money coming into the bank as deposits to legal income when you've already created invoices and you've created invoice payments on the side. That won't work with Clio. So I'll add a little demo video in here to show you the matching process. It's pretty cool. I'll just sneak that in as part of this video, but I just wanted to explain it a little bit 'cause I think sometimes people are afraid to synchronize it because they don't wanna connect it and have to deal with that matching process. But the matching process is powerful. You are really validating the work. 'Cause if you're over here in, in Clio booking the clients, booking in entries, but you're not pushing it into QuickBooks, you're now gonna have to enter all those invoices into QuickBooks 'cause they won't be there. You're gonna have to enter all the payments. Now you see there's a little redundancy here, right? Your client's doing it in Clio, you're replicating it in QuickBooks. It's not an effective workflow and the software is not designed for that. So if this topic has intrigued you, and I hope it has, make sure you click the subscribe button and follow me for more. But also join our group, Accountants Law Lab, we actually dive into QuickBooks quite often and quite regularly because it's the number one software for attorneys and because we have a lot of questions around it, especially when it comes to this matching and figuring out how to make all of this come together and work. It's something we teach. So if you've got a client in Clio and you wanna learn more, jump in our group. We'd love to have you, and we'd love to have— we, we'll be here to answer questions. We've got an open forum coming up and a in a couple of weeks and you can ask us questions on how to work, do this work. Also, sometimes if you're new to legal bookkeeping, it's, it's helpful to learn the things that we have. We've got 2 full years of topics and recordings in there for you to learn really quickly on the fly. So I hope that helps. We'll see you all in the next video. And until next week, bye now.
