Reconciling Client Trust Accounts In Clio

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Performing an ethics-compliant, three-way trust accounting reconciliation in Clio is easy when done correctly.

Step 1: Ensure Your Individual Clio Trust Balances Match Your Bank Statement

First, make sure you’ve received your bank statement for the month.  Reconciling with Clio works best when you receive a paper or PDF bank statement, rather than a download of transaction listings.  Using the actual bank statement, it is easier to compare balances.

Print a Trust Listing Report.  In Clio, select the tab for Reports, then click Trust Listing.  Settings for the report should be as follows:

  • Uncheck “Show clients with zero balance”
  • Select the button for “All Clients”
  • Select Practice Area: All
  • Select Date Range: Custom: Leave the start date blank, and set the end date as the date of your statement
  • Output Format: CSV
  • Click “Generate Report”

The report will automatically download, and you can typically find it in your downloads folder.  Move it to your trust reconciliation file, and save it there.  Now open it.

If you have more than one trust account, you’ll have to delete all the other trust accounts from this report, so that only the trust balances for the account you’re reconciling remain.  If you don’t have more than one trust account, skip this paragraph.  To do this, sort Column B (the Account column) A > Z.  (Place your cursor in Column B; click the Data tab; and click the screen-shot-2016-11-22-at-10-22-12-ambutton.)  Delete all lines in the spreadsheet that contain any account other than the one currently being reconciled.  Do you agree with me that it would be nice if Clio’s report feature would let us select a certain account so we don’t have to do this deletion step?  Please email them and let them know.

In Cell E1, enter the following formula: =SUM(D:D)  Hit enter.  The number Excel spits out in the cell should equal the Ending Balance on your bank statement.  When it does, the first of your three reconciliations is complete.

Step 2: Ensure Your Bank Account Activity Report Matches Your Bank Statement.

Print a Bank Account Activity Report.  In Clio, select the tab for Reports, then click Bank Account Activity.  Prepare your report with the following settings:

  • Trust Accounts: Select “Specific Account,” and choose the correct account
  • Select Practice Area: All
  • Select Date Range: Last Month (unless your bank statement doesn’t run with the calendar month, in which you’ll select “Custom” and enter the same dates as your bank statement)
  • Check the box for “Include Opening Balance”
  • Do not check the box for “Display Matter to Matter Transfer Transactions”
  • Output Format: PDF

Click “Generate Report” to download it, move it to your reconciliations folder, and open it.  Ensure that the opening balance matches the opening balance on your bank statement.  Ensure the closing balance also matches your statement.  Finally, check to ensure that all transactions showing on your bank statement appear on your report (which they should, if the opening and closing balances match).

Step 3: Ensure Your Bank Account Activity Report Balance Matches Your Trust Ledger Balance

If you’ve performed the two steps above and the ending balances match, then this step is already complete: compare the total balance on your Trust Ledger Report (which was calculated in Cell E1 in Step 1) with the ending balance in your Bank Account Activity Report.  When these two balances match, your three-way reconciliation is complete.

Not currently using Clio?  Try it for free.

Skepsis would love to perform your monthly trust reconciliations for you, whether or not you’re using Clio.  Please email email us at [email protected].  Gain more great insights by subscribing to our newsletter below.



Hiring Your First Employee In Washington

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We often meet with solo practitioners who are hiring their first employee in Washington, and they ask us: How do I hire an employee in Washington? What paperwork do I need? What steps do I need to take for local and federal governments? How do I run payroll? What am I missing?

To answer these questions, we’ve created a simple checklist for hiring new employees in Washington:

  1. File A New Business License Application.  If you’ve been operating without employees, chances are your current business license does not allow employees; so, you’ll need to file for a new one.  The process is simple, and you can file online here: http://bls.dor.wa.gov/file.aspx
    • Once logged in, you should see a heading that reads “Business licensing.”  If not, click the white button labeled “+ Add A Service”, and add the business licensing service to your account.  Then, click “Get Started.”
    • If you haven’t filed online before for that business, you need to add your business to your account.  Click “Add Access to an Existing Business.”  Be sure to have your UBI and Letter ID handy.  A Letter ID is a code found in the upper right corner of your business license renewal notice.  If you do not have your Letter ID, select the box “Click here to request a Letter ID be mailed to the address on file.”  Click next, and then come back once you’ve received your Letter ID.
    • If you do have your Letter ID, simply follow the steps in the wizard.  Be sure to select the option for hiring employees when it asks for the reason for the license.
    • Once you application is processed, you will receive: (1) a letter from the Washington Department of Revenue; (2) a letter from the Washington Employment Security Department; and (3) a workers comp rate notice from the Washington Department of Labor and Industries. You’ll need these letters to set up your payroll system.
  2. Obtain Required Paperwork From The Employee.  Two pieces of paperwork are required, and they both get saved in your files; they do not get submitted to any government agency.
    • Complete INS Form I-9, available here: Form I-9 (PDF, 535 KB).  Be sure to review the required pieces of identification and ensure both the employee and employer sections are filled out.
  4. Report Your New Hire.  Report your new hire to the State of Washington DSHS here: https://www.dshs.wa.gov/esa/division-child-support/new-hire-reporting.
  5. Set Up Your Payroll System.  There are a number of great options for running payroll in Washington.  We recommend:
    • Gusto.  Gusto is a payroll system with a simple and clean interface that makes running payroll a breeze, and it integrates with major accounting software (QuickBooks and Xero).  It has all the bells and whistles, including federal filings, state filings, paid time off, and direct deposit.  Try Gusto for free for one month using this affiliate link.
    • Xero.  Xero’s payroll feature is easy to use, and is included in your Xero subscription at no extra cost.  Xero will collect and pay all of your federal taxes for you; for Washington taxes, Xero will report them, and you’ll simply write the checks to the state each pay period.  Sign up for Xero through Skepsis, and receive 30% off Xero for your first 6 months.  Use code XERO30/6 at checkout.  Already using Xero?  Switch your billing account to Skepsis, and get 10% off Xero for one year.  Email us to find out how.
    • QuickBooks.  QuickBooks is yet another option for running your payroll.  However, to get comparable functionality in QuickBooks, you’ll have to purchase upgraded subscriptions at a hefty cost; so, we typically recommend our clients opt for Gusto or Xero instead.

Want more payroll help?  Let Skepsis handle it for you!  And don’t forget to sign up for our newsletter for additional tips and advice:



Attorney Competence and Technology

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Many argue that conducting business in the cloud poses many risks to law firms and attorneys; nothing could be further from the truth.  Chances are, unless you have a large in-house IT department supporting several hundred or more attorneys, the use of reputable cloud services will significantly decrease ethical risks.  The adoption of new technology, and especially cloud services, can significantly decrease an attorney’s risk of breaching its ethical duties.Continue reading→

3 Apps To Make Your Business More Mobile

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For some businesses, mobility is critical to the business because it allows them to work with clients both near and far.  For others, mobility is key to maintaining a work/life balance.  Whatever drives your business to mobility, here are three mobile apps to get your business’s mobile revolution off the ground.Continue reading→

Early Detection of Erroneous Bookkeeping Entries In Trust Account Records: Part 4

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The key to appropriately managing a client trust account is having a system in place that will alert the attorney as soon as possible that a transaction may have been entered erroneously.  Several simple, monthly checks will help you discover errors quickly.  In Part 1 of this series, we considered the importance of ensuring that the total balance in the trust bank account always matches the total balance in the client trust liability account; Part 2 discussed the importance of maintaining a credit balance in the Trust Bank Account.  In Part 3, we explained why and how involving the client in your system of trust accounting checks and balances is important.  This last installment provides a few additional tips for ensuring you catch problems in your client trust account before they catch you.Continue reading→

Early Detection of Erroneous Bookkeeping Entries In Trust Account Records: Part 3

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The key to appropriately managing a client trust account is having a system in place that will alert the attorney as soon as possible that a transaction may have been entered erroneously.  Several simple, monthly checks will help you discover errors quickly.  In Part 1 of this series, we considered the importance of ensuring that the total balance in the trust bank account always matches the total balance in the client trust liability account; Part 2 discussed the importance of maintaining a credit balance in the Trust Bank Account.  In Part 3, we explain why and how involving the client in your system of trust accounting checks and balances is important.Continue reading→

Early Detection of Erroneous Bookkeeping Entries In Trust Account Records: Part 2

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The key to appropriately managing a client trust account is having a system in place that will alert the attorney as soon as possible that a transaction may have been entered erroneously.  Several simple, monthly checks will help you discover errors quickly.  In Part 1 of this series, we considered the importance of ensuring that the total balance in the trust bank account always matches the total balance in the client trust liability account.  Here, we discuss why a credit balance in the Client Trust Liability account, or a debit balance in the Trust Bank Account, is a big red flag.Continue reading→

Early Detection of Erroneous Bookkeeping Entries In Trust Account Records: Part 1

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The key to appropriately managing a client trust account is having a system in place that will alert the attorney as soon as possible that a transaction may have been entered erroneously.  Several simple, monthly checks will help you discover errors quickly.  In the first of this series, we look at the importance of ensuring that the total balance in the trust bank account always matches the total balance in the client trust liability account.Continue reading→

Intro To Double Entry Trust Accounting For Attorneys

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To exercise attorney competence in the management of client trust accounting, a basic understanding of the double entry accounting system is helpful.  In a double entry accounting system, every transaction is entered into the company’s books twice: once as a credit in one account, and once as a debit in another account.  If the debits and credits are entered correctly, they will equal one another, or balance out, at the end of each accounting period; if the debits and credits do not balance out, then there is an error somewhere in the accounting. 

Continue reading→