Clearing account
A general-ledger account used to temporarily hold transactions during a multi-step process — for example between a payment instruction and its confirmed bank settlement — and that should clear to zero once the process completes.
A clearing account is a deliberate accounting waypoint. When a payroll system instructs a bank transfer, the gross amount is posted to a payroll-clearing account; when the bank confirms the transfer settled, the same amount is reversed out of clearing into cash. The net activity in the clearing account, when the process completes correctly, is zero.
The conceptual difference from a suspense account is intent. A suspense account holds items whose treatment is unknown; a clearing account holds items whose treatment is known but not yet complete. A growing balance in a clearing account signals a process bottleneck — instructions sent but not confirmed, or confirmations received but not yet posted back.
Common clearing accounts include payroll clearing, payment-gateway clearing, intercompany clearing, GST input/output clearing, and customs clearing. Each has its own expected lifecycle and aged-balance threshold; reconciliation tools manage these as separate streams with stream-specific tolerances.