Hi there 

I was wondering if someone might be able to tell me what the Cash Clearing account is, and what it is used for??? Probably a silly question but new to all of this..

Thank you

HI,

Not sure about others, but I was taught by an accountant to use this account as "temporary" means, when unsure where the income received (deposits) and sometimes income spent should be posted.  Then he would print this account at the end of month or of few months and review with the client the entries, and do adjusting journal entries afterwards.

Hope this helps?!

Hi there:  The best way to find out exactly what Simply is doing when it uses the Cash Clearing account is to go to the Help function and ask the question you just asked and it should come up with a fairly indepth explanation of how they suggest it be used.    What version and year of Simply are you using?  A Cash Clearing account has never been an account in the Chart of Accounts in Simply 2007 and prior.  If they have included it in the Chart of Accounts in Simply 2008 and 2009 then it is new and will likely need explaining.   

I have always used a Cash Clearing account to do my Accounts Receivable (for the past 10 years).  But I use it in a particular way that works for me and that may not be how Simply has set it up to be used.   Check the "Help" and see what it says.  I will do that myself too on Wednesday when I get back in to work and my computer.   I strongly doubt that it is intended to be used as a "holding" account for when you are unsure of a particular deposit or expense, although if that is ALL you use it for that would be OK.   Rita Deering

Thank you for the replys. Rita  it is the 2008 version of Simply and I did try to go into the help and put cash clearing in but nothing came up for it. Which I think is kind of weird????

Chevygirl,

Thank you for your reply, I was kind of thinking thats that what it might be used for but thought I had better check as I have never seen this "cash clearing" before and had no idea of what it may be used for.

I just dont understand why not just debit or credit the bank account??

Cash clearing can actually serve multiple purposes.  So the advice already given covers that - track the past entries in the account to see what it was for.

Why not post direct to the bank?  If you use the concept that Rita was referring to, you can post any amount received from customers and take what they owe off the A/R Aging reports.  Then you will not try to collect on them.  The Cash Clearing account is holding the money until you actually go to the bank.  When you go to the bank you post one general journal entry from the Cash Clearing account (credit) and into the Bank account (Debit).  This way your bank ledger will have one number for the deposit on the actual day you made the deposit.

If you posted every single cheque received directly to the bank account all week and went to the bank on Friday.  Your bank deposit may be made up of 15 entries for the week.  When you try to do the bank rec, you have to review your deposit book a full second time, doubling the work in order to compare the bank statement with your books in Simply.  Comparing one number on the ledger with the one number on the statement is a lot easier.

Thank you this is making it a little bit clearer thats for sure............

thanks for the reply and have a great day!!!!

Hello Richard:  The reason I suggested that the Help might offer an explanation was because Simply had added it to the list in the Chart of Accounts for 2008.  Did they have a particular purpose for it?  I seem to remember reading on the Forum that some people are using it as a linked account perhaps, to do their recording of Credit Card and Debit Card Receivables before doing bank deposits.  Has Simply somehow set it up to be used for this purpose?    Just curious if they had a particular reason for including it or just so that it is there for convenience (as I have been doing for years).   Rita Deering