Nothing works as good as clearing accounts for managing temporary transactions. Clearing account can be set up for recording a particular transaction and then transferring it to another account on a later date. This comes in handy when users need to record transactions that need to be transferred to other accounts. It is important for users to clear the clearing account before closing their books. If you don’t know how clearing account in QuickBooks work then this article is for you.
Users can record both income and expenses into clearing accounts. Some accountants make use of these accounts for recording accounts receivable and account payables. Further, users can also record expenses incurred for an ongoing project into clearing accounts.
Clearing accounts are usually made for handling transactions of a singular type. For instance, you should create two separate clearing accounts for managing employee salary and for managing expenses.
Chart of accounts is a built in feature of QuickBooks. It is an amalgamation of income, expenses, and assets & liabilities accounts present inside a company file. Through this tool, users can easily create and access clearing accounts. Also, for transferring transactions to different accounts, make use of a chart of accounts. You can easily search and filter for different accounts through the inbuilt smart search or sorting feature. Here is the link if you want to know more about “How to add Chart Of Accounts in Quickbooks“.
Note: Smart search is only available in QuickBooks 2017.
Below are the steps through which users can create clearing accounts in QB:
You just created your first empty clearing account in which you can add transactions easily. Create multiple clearing accounts for handling different types of transactions by following the aforementioned steps. Make sure to periodically clear clearing accounts.
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