Creating clearing accounts

A clearing account is a temporary account containing costs or amounts that are to be transferred to another account. Clearing accounts are usually set up in the cash accounts section of the general ledger accounts (in the 1000 to 1999 range).

For example, companies with a large payroll typically use a payroll clearing account to pay employee salaries and wages, transferring in sufficient cash to meet periodic payroll requirements.

To create a clearing account:

1. Open 1-7 General Ledger Accounts.
2. In the data control box, enter the ledger account number to use as the clearing account.

3. In the Short Name box, enter a brief description of the clearing account.

   Important! If an account uses departments or subsidiary accounts, the departments or subsidiary accounts must be set up before posting transactions. In the Subsidiary list, click 1-Subaccounts or 2-Departments.

4. As required, in the Subsidiary list, click 1-Subaccounts or 2-Departments.

   You can assign a cost type to ledger accounts, providing an additional way to verify transactions are posted to the proper accounts. When you post a transaction that has cost types, Sage 100 Contractor compares the transaction’s cost type with the ledger account cost type. If the cost types do not match, Sage 100 Contractor provides a warning, but does not prevent posting the transaction.

5. In the Cost Type list, click the cost type you want to assign the ledger account.
6. Click File > Save.