Step-by-step guide to processing operating-account and trust-account refunds in Clio Manage 2026. Learn the exact clicks for full and partial refunds, avoid common pitfalls like missing permission settings, and follow best practices including detailed documentation and monthly account reconciliation.
Chapters
Hey there. If you're a legal bookkeeper or law firm administrator, you already know that refunds in Clio Manage can be stressful. One wrong click and you risk reconciliation errors or trust account issues or just unhappy clients. We don't want any of those things. Today I'm gonna walk you through exactly how to process refunds in Clio Manage, both operating account bill refunds and trust account refunds using Clio Payments. Full refunds, partial refunds, everything. So stick around to the end and you'll be handling all of these confidently and staying fully compliant. We're gonna touch upon why refunds actually matter in legal bookkeeping, the difference between operating and trust refunds, exact clicks for both processes, common mistakes that cause headaches, and some Clio resources, which will be in the article attached to this video. Make sure you have Clio Payments enabled. It makes things pretty automatic and audit-ready. So why do refunds even matter? Refunds aren't just accounting entries. They're about ethics, client trust, and staying compliant with the bar rules. A fast, accurate refund keeps your clients happy. So no long-drawn process, right? Because that could just make the client angry and upset. And you want to stay compliant with the bar rules. So the reason why you really want to have a fast, accurate refund is to keep the clients happy and keep your monthly 3-way bank reconciliation easier. And Clio Payments, if you've got that enabled, it will really handle all the heavy lifting for you. It auto-adjusts invoice and sends payment confirmation emails to you and your client, and it creates perfect audit trails. But you still need to know exactly where and when to click. And this is important because refunds can affect the accounting software in a way that maybe you're not thinking and maybe a way you don't want. Mm-hmm. So what's the difference between the operating and the trust account refunds? Probably more important distinction. Operating account refunds, bill payments, are money already applied to client invoices. So if you think of it, this scenario, trust retainer is received, so a client prepayment, and then work is performed. And this is probably more typical of the situation that happens. Work's performed. Trust accounts get applied, clients get the bill showing the application of the trust accounts, and then they say, "Wait a minute, I didn't agree to this many hours. I think you need to take a look at it, Mr. and Ms. Attorney, to figure out what's going on here. I think you've overcharged me." And then the client may need to refund back the money into trust. So this is where it gets to be a little bit sticky. Trust account refunds return the unearned or excess client funds from the IOLTA. Account. So you're talking about the trust account here. They're different than a trust refund. So if the money's already been applied and it put into your operating account, it obviously, it applies differently. Maybe the case is over, so maybe the client gets the refund back, or maybe it needs to go back into trust to be applied later if the case is still open and running. So here's how you're going to do it. You're going to click on Billings and then filter for paid bills and then click the bill pay ID. So this is using Clio Payments. And this is going to be the payment refunds from an operating account. And then switch to the Online Payments tab. Click the Refund button next to the completed payment. If you only see Void, that the payment isn't ready yet. So make sure— if you have to see the completed payment. Choose to fully refund or partial amount. If the original amount covered multiple bills, see exactly which ones you want to apply it to. So that will be a problem too. So if you paid a whole bunch of bills, if it was more than one, you need to make sure you Click the ones that you wanna refund, and then Clio will auto-adjust those invoices for you. And enter the notes. So we always talk about oversharing notes, having more notes than necessary, because you wanna be able to understand what exactly transpired in this case when you do that. So put the notes in, enter a clear reason, an overpayment, a billing error, a client request. I even like copy and paste messages back and forth from the client to the attorney. Mm-hmm. Or refer back to wherever they are in the file. So you have that in the data. Review the summary, then click Confirm. You and your client are both going to get a confirmation email instantly. So for trust account refunds, a little bit different. So if they're getting refunded money, they had money left over. Locate the trust transaction when the trust money came in, click Refund, enter the amount. And that happens sometimes. Somebody will be engaged with a client and then the case something happens and it gets canceled or whatever. We see that a lot in immigration. Then you can just refund from there. Locate the transaction, click refund, enter the amount. Clio will show you what's available balances, which is what I love about the product, right? You're keeping a tight rein. You're not returning more money than you actually received. And then you send it back to the original payment method. So if they paid by credit card, it's gonna go back to their credit card. If they paid by ACH, it'll go back to their bank account. E-check refunds are only allowed in the US and they're only allowed up to 180 days. So know that if it's a long-ago process, you're probably gonna have to manually send it back with a check. So common issues that you're gonna see when you do this kind of work. If there's no refund button, that's the first problem, right? You go to click in and there's no way to refund it, but that's probably because the payment hasn't fully completed. Trust Account refund, if it's grayed out, check your user permissions. Maybe you don't have the right user type in Clio. That happens a lot sometimes. We find that somebody will give us a user to us, Travis, to go work in there, but it's not an admin user, and then we don't have a lot of the ability to even set up and check the synchronization. So you want to make sure you have the right type of user. And delays. So that's usually the bank. So make sure the client understands, you know how sometimes it takes 3 to 7 business days for the money to come in when you're being paid by an eCheck, for example, it's really long. Let the client know that there's an expectation of at least 3 to 7 business days before they're gonna see the money in their account. It's always good to have some really clear expectations. So you maybe wanna say it's around 7 days. So when they get it back in 3 or 4, they're happy. And then maybe there's something to do with the reconciliation. Always document the reason. Like I said before, always document the reason in the notes clearly so that you can put the pieces of the story together. So for best practices, document everything. I know it's the third time I've said that in this video. Reason for the entry, the amount, the method, the notes, what happened, copy the notes, the interaction between the client and the customer. Communicate timelines clearly with the client. Reconcile your trust account and your bank accounts monthly. And then maybe create a workflow process, a standard operating procedure, an SOP. You'll really be shining when you have a set process in place, especially when you're co-managing this process with maybe an admin in the office and you're a remote bookkeeper. You want to make sure that you do this properly. Mm-hmm. So now you've got it. You were able to complete the process. So there are help articles right to Clio in the article that's attached here. And if you found this very helpful, hit the like button, subscribe for more law firm bookkeeping tips, tutorials, and then comment below. What is your biggest Clio challenge? And I'll make a video on that. I read all the comments, so make sure you let us know. And we have a download here, a client refunds checklist. It's in the link in the description. So make sure you grab that free resource. Thank you for watching and I'll see you all on the next video. Bye now. Some—
