QuickBooks: How to set up a Clearing Account

To set up a Clearing Account

Add a new account to your Chart of Accounts.

While you can choose several types of account, the best is a bank account:

To set up a Clearing Account:

    In the menu bar, select Lists and then Chart of Accounts.
    Right click in the Chart of Accounts and select New.
    In the Add New Account window, click the Bank button.
    Click Continue
    In the Account Name field, enter Clearing Account, Wash Account or Barter Account.
    DO NOT enter an opening balance.
    Click the Save and Close button.

A typical transaction:

    Create a journal entry
    Add the A/R or A/P from which you are moving money.
    Add the Clearing Account.
    Save the Journal Entry.
    Create a second Journal Entry.
    Add the Clearing Account.
    Add the A/R or A/P account to which you moving money.
    In either Pay Bills or Receive Payments, link the Journal Entries together.

The most common reason that we need a Clearing Account in QuickBooks is that the program will not let you record transactions that contain: Two Accounts Receivable  accounts. Two Accounts Payable accounts. One Accounts Receivable account and one Accounts Payable account.