I’m here to share some insights on how a clearing account works, @1935 1475 8633 749.

In QuickBooks, a clearing account is used to move money from one account to another without moving it directly. This is like a holding account that holds your fund until you’re ready to move it.

This account is also called a Barter or Wash Account that has a balance of $0.00 because we always take out the amount we put in. Also, you won’t have to reconcile this account as this doesn’t hold any funds.

To learn how a clearing account works, you can follow the steps below:

1. From your QuickBooks Online (QBO) account dashboard, Go to the + Menu.
2. Select Journal entry.
3. Add the Account Receivable (A/R) or Account Payable (A/P) account from which you are moving money.
4. Enter the Clearing account.
5. Save the Journal Entry.
6. Create a second journal entry.
7. Add the Clearing account.
8. Enter the AR or AP account to which you moving money, then click Save and close.
9. In either Pay Bills or Receive Payments, link the Journal Entries together.

You can also check this article for more details about this. Although it’s for QuickBooks Desktop (QBDT), it also applies to QBO in using a clearing account: Set up a clearing account.

I’d also recommend working with your accountant for additional guidance. They can advise you on what account A/R or A/P account to use. If you’re not affiliated with one, you can check our ProAdvisor page and we’ll help find one from there.

Once everything is settled, you might want to read this link that serves as your guide in reconciling your accounts effectively: Reconcile an account in QuickBooks Online.

Let me know if there’s anything else you need help in managing your accounts in QuickBooks. I’d be more than happy to assist you. Take care, and keep safe.