Do you know what a Clearing Account is? If you don’t know then don’t worry, we will help to know about this. Also, you will learn here how to set up a clearing account in QuickBooks Enterprise and how to use a clearing account in QuickBooks Enterprise.
A Clearing Account comes under the accounts that will help you in moving your money from one account to another account when you are unable to move your money directly. Normally this account has a balance of $0.00 because you always take out the same amount that you put in. Might be they are also referred to as “Barter” or “Wash Account”.
Below we discussed the common uses for a clearing account in QuickBooks. Suppose you have multiple users for the same account then you might require to create one for each.
How to Manage Customers and AR
To know about this, you have to read out the below details. All the details provided here will make it easier to manage Customers and AR.
- Accrual basis bad debt requires to be managed
- Under the same customer, you just need to shift a Credit Memo from one job to another job properly
- An amount will transfer from one A/R account to another AR account
- Require an allocation of overhead expenses to both customers as well as classes by using a zero check
- Maintain a record of complete check that helps in paying the invoices to more than one customer(including 2 customers)
How to Manage Vendors and AP
To know about this, you have to read out the below details. All the details provided here will help in managing Vendors and AP easily. These are:
- From one AP account to another AP account, an amount will be moved or transferred
- A refund check from one vendor must record on the behalf of another vendor
- From one vendor to another vendor, you have to transfer a bill or bill credit. In an example, you can consider “Bill consolidation”
- Moving the foreign Currencies rather than converting to your currency will work at your home place
- A Receivable against a payable needs to register
- Generate and maintain the barter transactions with a company who is a customer and a vendor
Steps to Set up a Clearing Account in QuickBooks
Here you will learn simple and easy steps that will help you in setting up a clearing account. All the steps will require to be followed in the given order without interrupting their sequence of writing in this article. These steps are listed below:
- To begin with, from the “Lists” menu, you have to choose the “Chart of Accounts” option
- In the Chart of Accounts simply right click anywhere then click on the “New” option
- Now choose the “Bank” radio button, you will get this option inside the “Add new Account” Window, click on it to select the button
Note: When you can pick from multiple types of accounts, the best is a bank account. We can say this after identifying the reasons which we listed below.
- You can make payments into a bank account using “Receive Payments” or “Make Deposits”
- You can make payments out of a bank account using “Write Checks” or “Pay Bills”
- A bank appears to you on the Balance Sheet and it is on the statement of cash flows to balances and accepting changes in balances
- You are required to use a bank account in the form of a “Clearing Account” for allocating the expenses to overhead or class with the help of a zero check
- Now click on the “Continue” option
- Enter Clearing Account, Barter Account, or Wash Account in the Account Name field
- Do “NOT” enter an opening balance
- Click on the “Save & Close” option to finish it
How to Use a Clearing Account (Step-by-Step)
From here you will know the easiest way through the steps, will help you to use a clearing account. These steps are listed below:
- To start, you can create a journal entry
- Now add the AR or AP from which you are moving money
- You are required to add the clearing account
- Saving the journal entry.
- Now you have to create a second journal entry
- Then add the Clearing Account
- You have to add the AR or AP account to which you move money
- Either you are paying bills or receive payments, you need to link the journal entries together
Hopefully, this article is helpful for you and we have successfully covered all the steps and details that you need to know to set up a Clearing Account. But if still facing any kind of issues in the manual implementation of steps then the right option we have for those ones is to get in touch with our Intuit Certified ProAdvisors expertise through the toll-free number discussed above and get quick help from our expert’s team.