Payment Profiles are a useful feature for you to control default due dates and grace periods for bills, set up automated interest charges, and apply discounts to bills based on early payment.
Payment Profiles are applied at the Contact level and affect all Matters for a given Contact.
- Go to Settings > Billing:
Next, click on the "Payment Profiles" tab.
- Your Clio account comes with a default payment profile. Modifying the Default Payment Profile will change conditions applied by default to all of your Contacts.
- You can add additional Payment Profiles to be applied to your Contacts by clicking the "Create a Payment Profile" link. This gives you the freedom to customize payment terms for certain clients.
You will need to name your new Payment Profile, set your payment terms and click the "Create Profile" button.
- To add a Payment Profile to a Contact, go to the Contact and click "Edit". Scroll down to the bottom to Billing Preferences. Note that Payment Profiles can also be applied while creating a new Contact.
Your Default Payment Profile will be automatically applied. If you have set up multiple Payment Profiles in your Bill Settings you can access them by clicking into the 'Payment Profile' field - this will display a dropdown menu to select from.
- You can view your Contact's Payment Profile in the Contact Details:
You can manage the due dates automatically applied to bills by using Payment Profiles, but you can also manage them manually for individual bills by editing the bill and then choosing the appropriate date before saving.
Please note that if you choose the option within the Payment Profile to use a 0 day Term (grace period) then the due date will be the date you generated the invoice.
Once you have created a payment profile with interest terms and have applied it to a contact, you will start seeing interest charges appear on new bills according to those terms.
When you generate a bill for a Contact with a payment profile attached, new information appears on the bill regarding interest. On the left is the date for the early discount. On the right, the bill total, what has been paid, any issued credits, and the amount of the early discount are populated:
The draft of the invoice and the preview of it thereafter also reflects the early payment discount:
- Interest is calculated during the grace period
- The initial interest charge is added when the grace period expires
- Interest is only calculated once an invoice is approved (even if approved after the due date)
- If this is the case, all interest accrued between issue date and approved date will be added in a single line item at midnight PST on the date of bill generation
- Interest only gets applied to an Invoice each night at midnight PST due to server limitations
All interest calculations thereafter are based on the interest period established in the payment profile. The interest will be reflected on the bill, as you can see here:
Principal: The subtotal of the invoice prior to any interest charges.
Grace period: If the client pays within the Grace Period, then they are not charged interest. Interest is calculated for the grace period once that time has passed, and thereafter it is calculated based on the interest period.
Simple Interest: Interest is calculated only on the Principal, or a portion of the Principal.
Compound: Interest charged on the principal + previous interest charge.