Clio Billing and Payments: Best Practices for Getting Paid Faster

Getting paid faster is one of the most impactful improvements any law firm can make — and it starts with how you handle billing. Clio’s billing and payment tools are designed to reduce the time between work performed and payment received, all while maintaining the trust accounting compliance your state bar requires.

This guide covers everything you need to know about Clio’s billing engine, from time tracking best practices to automated payment collection.

Time Tracking: The Foundation of Profitable Billing

Accurate time tracking is where revenue starts. Research consistently shows that lawyers who track time contemporaneously capture 25-40% more billable time than those who reconstruct entries at the end of the day or week.

Clio’s Time Tracking Tools

• Built-in timer — Click to start tracking time on any matter, pause when interrupted, and resume when you return
• Multiple simultaneous timers — Work on several matters throughout the day without losing track
• Quick time entries — Log time after the fact with manual entries, specifying the duration and description
• Mobile time tracking — Use the Clio mobile app to log time during depositions, court appearances, and client meetings
• Activity descriptions — Use Clio’s activity templates to standardize how your team describes billable work

Time Tracking Best Practices

1. Track time as you work — Use Clio’s timer for every billable activity, no exceptions
2. Review entries daily — Spend 5 minutes at the end of each day reviewing and cleaning up your time entries
3. Use descriptive narratives — Write clear, detailed descriptions that clients can understand and appreciate the value of
4. Set minimum billing increments — Configure Clio to round up to your firm’s standard increment (typically 6 or 10 minutes)
5. Track non-billable time too — Understanding where non-billable hours go helps identify operational inefficiencies

Creating Professional Invoices

Your invoice is one of the last impressions a client has of your firm — it should look professional and communicate value clearly.

• Customize your invoice template — Add your firm logo, color scheme, and payment terms
• Include detailed descriptions — Clients who understand what they’re paying for are more likely to pay promptly
• Show value — Group related activities together and use clear headers that demonstrate progress on the client’s matter
• Add payment instructions — Include online payment links, mailing addresses, and accepted payment methods
• Set standard terms — Define net-30 or net-15 payment terms and display them prominently

Clio Payments: Getting Paid Online

Clio Payments (powered by Stripe) allows your clients to pay invoices online with credit cards and ACH bank transfers. This is one of the most impactful features you can enable — firms that accept online payments typically get paid 30-50% faster.

Setting Up Clio Payments

1. Navigate to Settings → Clio Payments and click Get Started
2. Connect your bank account for payment deposits
3. Configure which payment methods to accept (credit cards, debit cards, ACH transfers)
4. Set up automatic payment links on all invoices — clients can click and pay directly from the invoice email
5. Enable the client portal payment option so clients can view and pay outstanding invoices anytime

Payment Processing for Trust Accounts

Clio Payments supports compliant trust account deposits, which is critical for law firms that collect retainers or hold client funds:

• Separate trust and operating accounts — Clio routes trust payments to your IOLTA account automatically
• Client-initiated trust deposits — Clients can fund their trust accounts through the client portal
• Automatic trust application — Apply trust funds to invoices with proper documentation for compliance

Automating Your Collections Process

Chasing unpaid invoices wastes valuable staff time. Clio’s automation features can handle much of the collections process for you:

• Automated payment reminders — Configure email reminders at 7, 14, 30, and 60 days past due
• Overdue invoice reports — Set up weekly reports that flag all past-due invoices for review
• Batch invoicing — Generate and send all monthly invoices in one batch instead of one at a time
• Recurring billing — Set up automatic monthly billing for flat-fee arrangements or subscription-based services

Trust Accounting Compliance

Trust accounting errors are one of the leading causes of bar discipline. Clio provides the tools to stay compliant with your state bar’s trust accounting rules:

• Individual client ledgers — Maintain separate ledger records for each client’s trust funds
• Three-way reconciliation — Reconcile your trust account bank statement, Clio trust records, and individual client ledgers monthly
• Automated reconciliation reports — Generate the reports your state bar requires for trust account audits
• Transaction history — Maintain a complete, auditable trail of all deposits, withdrawals, and transfers

Key Billing Metrics to Monitor

• Days Sales Outstanding (DSO) — Average number of days between invoicing and payment. Target: under 45 days
• Collection rate — Percentage of billed amounts actually collected. Target: above 90%
• Realization rate — Percentage of recorded time that makes it onto invoices. Target: above 85%
• Write-off percentage — Amount of time or fees written off. Keep below 5%

Optimize Your Billing Workflow

A well-configured billing system directly impacts your bottom line. At Courthouse Digital, we help law firms optimize their Clio billing workflows — from time tracking best practices to automated collections and trust accounting compliance. Get in touch to improve how your firm gets paid.