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Clio Subcontractor Billing Process

Learn how to stay up to date with subcontractors in Clio.
Clio Subcontractor Billing Process
Written by
Paul W Carlson, CPA
Published on
Dec 8, 2023

Avoid issues within IOLTA accounts by keeping up with subcontractor bills. This tutorial will help establish best practices in paying subcontractors and staying current.

Paul W. Carlson, CPA:

Hi, this is Paul Carlson, CPA with Law Firm Velocity. This one we're going to walk through the process we like to use for subcontractors through Clio. So the big assumption with this process is that subcontractors either have a dedicated login into Clio just like other firm employees have a dedicated login, or they have access to Clio through the Clio Co-Counsel access through Clio Connect. So the difference is Co-Counsel is free for each user. It's much less access to information, whereas a dedicated login, you're paying Clio's monthly subscription fees for each login. If you have a contractor who's doing a lot of work, they probably need a dedicated login so they can see all the firm matter information.


So here's the process. One, the contractors have to enter all their time into Clio every day, that we need this to manage the Clio ... To manage the client IOLTA balances. With our fast-growing law firms, one of the critical reports we have them review every week is a report that details the amount the client has in IOLTA, how much we have in unbuild work or whip, and then how much the client has in outstanding invoices. That as those balances move, we need to stay ahead of that and request more trust funds from the client as needed.


If we have a contractor who enters all their time for the entire month on the last day of the month, we don't know how much charges they're putting into the matter. So this is an example of a worst case scenario is we have $1,500 in the client's trust account. We're looking at that weekly report and there's no whip, so we think we're perfect with this client, that we're not in trouble, that then the contractor goes ahead and enters $8,000 worth of time charges against that matter at the end of the month. Well, now we're behind on that client's trust account and we need to suddenly scramble for a big trust advance, and we don't want to do that. We need to stay on top of IOLTA balances every week.


So with the time in that we have the subcontractors run a report out of Clio twice a month, so we're going to have them run a report for the 1st through the 15th, send it in on the 17th, and then for time for the 16th to the end of the month, we want that on the second of the following month. So we run a report from Clio of all of their time, and I'm going to jump over to do Clio in a minute and walk through how to run this report. And then with this time report, we want the contractor to send us an invoice for their time for the period.


We get a lot of pushback on why contractors need to send invoices. It's really for two reasons. One, the IRS is very aggressively pursuing misclassified employees that vendors or subcontractors send invoices with dollar amounts on them that say how much they want to get paid. If they're just sending in time sheets then that starts to look more like an employee because employees just turn in time sheets where subcontractors send in bills.


And then every time that we've seen where we just work off of time sheets for paying vendors, that there's some sort of ambiguity that there's either time that's supposed to be not billed or there's things that's supposed to be billed at a different rate, and that doesn't get communicated through the accounting system and then we end up paying a vendor for the wrong amount. And everyone's frustrated that if we get an invoice that says exactly hey, I worked last month, I need $3,000 for my time. Everyone's crystal clear on exactly what the expectations are. And then once you have the Clio time report and an invoice, email both of those into the firm's accounts payable email address. Most of our firms are shifting over to, so they just send the information into the email address.


So let's go to Clio. So to run a report of all of your time from Clio, you go 'Activities', 'Time Entries', and so it just shows you the one day by default. So it's January 26th, so say I'm behind on entering my bill for January 1st through the 15th, that now I would run this report and create my time report and use this to send the invoice. I'm working from a sample database. I don't want to create more time entries, so I'm going to run for a weird period just so you can see an example report. And from that, I have all of my time for 2017. So just quick glance that this looks right. Okay, so we need this out to the PDF. So we go export, export all the PDF. When the report is done, download it. And here we have the time reports. We just save this to our local computer and submit this with the invoice, that this shows us how much time was entered into Clio, and we can use this as the basis for our invoice into the firm.


And with that, it's a quick overview of how we like to run subcontractors with Clio. Thanks.