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Enhanced Expenses: Expense Categories + Hard and Soft Costs (FAQ)

Objective:

  • What are hard and soft costs?
  • Which Clio Manage plans will have access to enhanced expenses?
  • How will users benefit from enhanced expenses?
  • How can I create expense categories to streamline my recordkeeping workflow?
  • Can I attach a pre-set rate for each expense category I save?
  • I do not want to differentiate between hard and soft costs, what do I do?
  • What happens after I turn on hard and soft costs?
  • What happens when I turn off the hard and soft costs?
  • What happens when I turn off the hard and soft cost feature, and then turn it on again?
  • Who can toggle hard and soft costs on or off?
  • Why is the vendor field available for hard costs, but not for soft costs?
  • Why are the quantity and rate fields only available for soft costs and original generic expenses, but not hard costs?
  • Why are the quantity and rate fields only available for soft costs and original generic expenses, but not hard costs?
  • How can UTBMS categories be used in conjunction with expense categories, preset rates, and hard and soft costs?
  • Is Clio releasing additional reports for enhanced expenses?

Environment:

  • Clio Manage

Additional Information:

  • n/a

Answer:

What are hard and soft costs?
Hard and soft costs help firms to accurately classify their expenses, and are important for business intelligence, compliance with audits performed by law societies or bar associations, and for reporting taxes (particularly for firms that are growing larger).

Hard costs are expense recoveries paid on behalf of a client to a third party vendor (e.g. court filing fees, translators, medical records).
Soft Costs are expense recoveries that are not directly related to a payment for a third party vendor (e.g. photocopies, postage).

Which Clio Manage plans will have access to enhanced expenses?
Boutique, Elite and the E.U.

How will users benefit from enhanced expenses?
Enhanced expenses reduce data entry and the need for manual expense calculations. By streamlining recordkeeping workflows, users will save time and effort, and also reduce the likelihood of error.

How can I create expense categories to streamline my recordkeeping workflow?
You can create expense categories on the Activities page by selecting “Manage Categories”, then “Expense Categories”, and then “New Category”.  You can also create a new category as you are creating a new expense by clicking the “Expense category” dropdown, and selecting “Create new expense category”.

Can I attach a pre-set rate for each expense category I save?
Yes, you can create preset rates when you create the expense category--then, when you create a new expense and select the category, the rate will auto-populate the new rate field.

I do not want to differentiate between hard and soft costs, what do I do?
In some instances, firms may not have a need to be very precise when categorizing expenses. Hard and soft cost recordkeeping can be disabled by default, and re-enabled in Settings > Billing > Expenses.

What happens after I turn on hard and soft costs?
Expenses that were previously created remain in their original state, and no backfilling will occur. Going forward, all expenses or expense categories created are required to be defined as hard or soft costs.

What happens when I turn off the hard and soft costs?
All the hard and soft costs and expense categories will revert to generic expenses (as they were before enabling hard/soft costs). Going forward, any expense created would be the same as the original generic expense type.

What happens when I turn off the hard and soft cost feature, and then turn it on again?
All hard and soft costs become generic expenses after turning off the feature, but when it is turned back on again, they return to their original hard and soft cost states.

Who can toggle hard and soft costs on or off?
Only Clio Manage users with administrative permissions.

Why is the vendor field available for hard costs, but not for soft costs?
Hard costs are defined as expense recoveries for payments made to a third party vendor (e.g. court fees, translators), whereas soft costs are expense recoveries that are not directly linked to a vendor (e.g. photocopies). This is why recording a vendor is not required for soft cost entries.

Why are the quantity and rate fields only available for soft costs and original generic expenses, but not hard costs?
Hard costs are typically payments for unique units of services for each matter, such as translating services or court filing fees. If there are multiple occurrences for a service, we have found that users would want to list these separately. Hence, a set rate and quantity is less useful here.

How can UTBMS categories be used in conjunction with expense categories, preset rates, and hard and soft costs?
Users will need to select UTBMS expense category as the type when creating the category. When it is created, it can be defined as a hard or soft cost category, and a rate can be attached to it.

Is Clio releasing additional reports for enhanced expenses?
We have updated the Activities table to reflect the additional inputs that users can export. There are no additional reports right now.

 

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