Merchant Clearing

Often a clearing account is used in business to help with balancing the amount of money your merchant facility deposits into your bank account each night.

  1. Setup a Bank Account called Asset: Merchant Clearing.
  2. Use this Bank Account to apply payment to individual transactions that your customers have paid via the merchant facility.
  3. Then either (a) or (b);
    (a) Create a journal where you DEBIT Asset: ABC Bank A/C and CREDIT Asset: Merchant Clearing,-or-

    (b) Create a Journal using the Create As option in the bank feed.

In this way one big amount appears in your Bank AC to reconcile against. Sometimes the journal requires an extra line for merchant fees.

The end result is that the clearing account should balance over time. When it does this has the benefit of highlighting a bank error or an error in your own payment processing systems.