Clio Trust Accounting 2026: Fix Common Issues Fast & Stay Compliant

Hey everyone, Linda Artesani here from The Law Lab, your go-to for all things legal, bookkeeping. So in 2026, We've got lots of choices for legal tech software. There's literally thousands of them. But when you really start to finesse and go through all the pluses and the minuses of each, we've landed at our firm on two software that we think are the best software. And since this month's gonna be my month of Clio, I'm gonna talk about Clio as far as trust accounting goes. I think it's a game changer. There's lots of new reports in there. If you haven't used it in 12 years, you really need to relook at it. We still have some issues, though. Sometimes some common things that happen in Clio that I'll go through as well. Sometimes you have trust transfers that shoot over a transaction, or changes made by the attorney that will make extra transactions. So you need to be aware of this if you're doing legal books, so that you can stay on top of it and make sure the books stay in great pristine order. So today we're gonna talk about turning those headaches into high fives. With a fun guide to help fix Clio issues. We'll laugh at some of the common pitfalls and we'll share some pro hacks, some real stories, and even peek at AI trends. So if you're a lawyer listening or a bookkeeper juggling with law firm trust accounting, don't forget to hit the like or the subscribe button to stay on top of everything legal bookkeeping. So let's dive in here. First, let's call out the usual suspects in Clio trust issues. So picture this, you deposit client funds, but bam, the records don't match the bank account. That's mismanaged funds. Maybe it's reconciling in QuickBooks, but not reconciling it back to the third piece or the trust accounting in Clio. And you're really not compliant. Maybe the numbers in Clio say one thing, the numbers in QuickBooks say another. And you really have to make sure that you don't ignore this because it's just like a leaky roof. Errors will flow in and then it'll lead to some fraud risks or even an audit panic. We don't get a a lot of time if the firm gets audited. So you really wanna stay on top of keeping the records perfectly clean. You don't want to have to go back and pay a firm like ours to go in and dig through and clean up the records. So here's a little status alert. Over 40% of all law firms report that they've got trust errors yearly, but Clio users who fix them and use this product can cut their risks by 70%. So You can cut the risks down if you're using a software like Clio. So no more scrambling. Let's just make trust management as easy as making a cup of coffee. Now the fun part. Clio's superpowers are legal trust account management. Clio keeps the funds locked away from the operating cash. There's no accidental movement of funds. You have to keep it completely separate. And one of the things that we like to tell clients when they start using Clio is they start looking and they don't realize like, why is my operating account not match my operating account in QuickBooks? Unless you put every single transaction in operating, that means all the stuff that goes through that has nothing to do with trust and mirror all that, which why would you? That's a lot of extra work. It's not going to match, but the trust account should match if you've connected it. Now the fun part is connecting it and make sure you connect it the right way. You have to make sure that you've made the accounts that Clio uses ahead of time and then go in and set up Clio. If you don't, you're gonna have to keep going back and forth and in and out. It's a little bit of a pain. So you want to make sure that you have the accounts. And if you look in the article, I give you lots of links back to the Clio support articles. So you'll have all these accounts set up in place so that you're able to connect them when you do go into synchronize and can make that integration with Clio. One of the things that's great about QuickBooks is having the bank feed, right? You've got the auto sync, you've got it synchronizing with the bank. Account, because the bank account's really what happened, right? In the real world, not what attorney put inside of Clio. And you have to remember that sometimes they post transactions that they may skip adding the invoice and just put a transfer in when it's actually should have been an invoice customer payment moment. Sometimes they skip adding the retainer piece where the money came in, but then they show the money coming out, but they can't show the payment because there's not any money in the retainer. There's a lot to follow here and you really need to get certified in Clio so that you understand how the product works. But also you want to make sure that you've got transaction histories. That's an important piece of Clio as you're starting to work in the product. You can actually see in their little audit log on the invoice what happened. You can pull up that at any time to see, oh look, the client edited this when it was already a done deal. Reconciled on the 3-way. Why did they go back and change a transaction? You need to ask that. It's putting our superhero cape on, right? We have to make sure that everything's logged in exactly as it happened at the bank level to make that 3-way bank reconciliation happen. So Clio does have a reconciliation feature that you can use, although if you haven't been using it from the beginning, it's really hard to pick it up midstream and really reconcile if the client didn't use that feature. So no, that's a lot more difficult. You'd have to go back to the beginning of time to be able to reconcile in Clio. But if it's a new client, new file, new Clio, easy peasy, I would recommend using it. Clio handles the bank and it handles the client ledgers. Clio's like your trust sidekick. It helps keeping the chaos of the unknown so that you're aware. You're the investigator. I always say we put the investigator's hat on. We're the investigator and knowing exactly what's happening in Clio Sometimes we see money come into the bank and we don't even have a clue where it came from. Did it come from a client payment where he or she showed an invoice payment and they transferred money over? Did it come from a different method? You have to figure out what the attorney is doing, and not being in the office can be a little bit of a hindrance. You wanna really befriend the firm's admin, for example, so that you're able to have that person in the office that can tell you, oh yeah, on the Smith file, this and this happened. You really want to Make sure that you've got all eyes on it. You can see a lot when you log into Clio, and hopefully your client has given you your own personal login. You're not sharing theirs. That's hard to do. They will have to pay for you to do that. And a lot of times you'll get pushback from clients, and rightfully, if they're a small client, you want to make sure that you're aware of the fact that sharing the login with an attorney was something we all did back in the day. But now you've got the multifactor authentication turned on. It's a lot harder because you'd be bugging a client. What's the code? We don't wanna be doing that. So one of the things you want to do— it is a few law firm trust accounting best practices in Clio. You want to reconcile, reconcile monthly. Sometimes you have to do it even weekly. We call it soft reconciling, and that will help you spot any mismatches as you go. Document everything excessively. Even if you think that you don't need to add the words or add the story, do that. It's great to have all the notes, and Clio actually makes that very easy to do. Activate alerts at the bank. Make sure you activate any low balance alert that kind of helps, any unusual activity alerts at the bank level. It's always a good practice when you're working with trust accounts. Obviously get trained in Clio, watch their webinars, learn and master IOLTA compliance. It's important to do these things so that you're able to stay on top of the trust account for your client and keep it really clean. So sometimes you can run into problems when you reconcile, and I'll talk about this a little bit. Sometimes a client will put it all into Clio, went into the IOLTA, you look at the bank, it's in the operating. So those are the things you have to fix. And it's not an easy fix because it physically went into the wrong bank. So you now have to have the client move the funds from the operating to the trust. Sometimes they book it in Clio into the wrong bank account. That's a little bit easier fix. You're not moving funds. You can make those corrections. Always get written permission to make entries in Clio. Don't just think that because you know what to do, you do it. Make sure you get that as a best practice when you work with attorneys. If they give you your own login and they allow you to make the corrections, that's great. Saves you time. You don't have to explain away what the problems are. For the most part, you'll be able to clean up a lot of it. But always, one, get permission to get your own user in Clio. You really want to have that trail, that audit trail where you can see and trace who did things. And then it also protects you because they can see what you've done. And then Clio support's gonna be your lifeline. They've got a really great support product, so you can reach out to Clio and get help in their software. They're not there to help you with legal accounting. That's what we're for. But you can use them if you have trouble understanding how to book an entry. And we'll get into some of those entries in the future videos as we go forward. Some real wins. We have had a mid-market firm that moved from a legacy type of product desktop, wanted to be online, wanted to be in the cloud. We moved them. We made sure the migration went very well. We double-checked all the numbers after Clio imported a lot of this stuff. We entered the opening balances and we tied it all back to the books. You want somebody that can do that kind of work. And then you make sure you set up reports for them. There's so many great reports. There's actually a company out there that's called My Firm Data. It's very inexpensive. They'll create reports that maybe Clio doesn't have. They're a little bit weak in the report department, although that is getting better. Use Clio's resources, don't miss out. The knowledge base is a wealth of information with a lot of pictures and screenshots. There's also webinars and forums and their support itself. Dive in. Your trust game is about to level up. And then peeking ahead into 2026, we're looking at some trends like AI auto-categorizing transactions. I think we're gonna see blockchain in the future for some unbreakable records. And then of course you've got the cloud access everywhere, that's already there. Clio is leading the charge on this kind of stuff. So some final thoughts from me is just make sure you master trust accounting. That's number one. Master how you work with Clio. Your firm will stay efficient and compliant. And maybe if you want, you could suggest, if you have any questions, let me know. What is your biggest client Clio trust issue? Let me know. And then like if this video helped you, subscribe for more, and we'll see you all next week. Bye. Bye now. Bye.