Payment Profiles are an 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 kinds of clients, practice areas, or personal preferences.
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, click on the Contacts tab, locate the Contact you wish to modify and "Edit". Scroll down to the bottom to Contact Billing. Note that these 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-only calculations are performed depending on the payment profile. Please note that interest charges after the first are calculated as of the bill’s due date.
While interest is being calculated on the bill during the grace period, the initial interest charge will not appear on the bill until it has been approved and the due date has passed. The initial interest charge will be calculated for the number of days between the issue date and the due date or approve date (whichever comes last).
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:
When viewing the Detailed Statement of Account on an alternate invoice to the one that is accruing Interest, you will see invoices summarized, and Interest charges broken out to individual items. As shown below, these interest charges are also listed in the Detailed Statement of Account section on any other invoices for your Client that include the same Matter. Note that the dates listed here are those the Interest charge is 'Due On' rather than the date the charge was added. This means that if the invoice is not paid by the 'Due On' date then an additional Interest charge will be added to the total outstanding amount.
On the example invoice 1361 we can see there is no interest charge for the date of "05/16/2016" because that is the date that the upcoming Interest charge will be Due On:
New interest-only line items are generated as needed until the bill principal is $0, at which point interest stops being calculated.
Principal: The amount of the invoice prior to any interest charges.I.E., Bill Total = $1000
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.