Cash Clearing Process
The Cash Clearing process enables you to track amounts that have actually cleared your bank. Till reconciliation happens the amounts are parked in 'Cash Clearing Account'.
Cash Clearing Process
Rather than hitting the bank accounts, in cash clearing systems, the cash/bank transactions are parked in 'Cash Clearing Account'.
Once reconciliation with bank statement is done the reconciled amount is transferred to Cash/Bank Account.
This provides a clear snapshot of lying unreconciled amount in the organization at any point in time.
The Cash/Bank account reflects only the balance that has been reconciled with the transactions of Bank.
The Cash Clearing process enables you to track amounts that have actually cleared your bank versus amounts still floating in the banking system.
The Cash Clearing process creates accounting entries to record the actual settlement in your cash/bank account in general ledger only when you clear the payment transactions in the system during the reconciliation process.
Till reconciliation happens the amounts are parked in 'Cash Clearing Account'.
It creates the entries in the bank account only when the payments have cleared the bank AND they have been reconciled as cleared by the bank reconciliation process.
The system does not create cash/bank accounting entries for unreconciled DEPOSITS/payments.
This provides a clear snapshot of lying unreconciled amount in the organization at any point in time.
Related Links
You May Also Like
-
The topic for this lesson is "Introduction to Cash Management Process". We start with the learning objectives for building requisite functional expertise in cash management process.
-
The Cash Clearing process enables you to track amounts that have actually cleared your bank. Till reconciliation happens the amounts are parked in 'Cash Clearing Account'.
-
Technology has enabled the treasury function by providing various solutions to manage it's complicated tasks. This article explains various types of treasury management systems available in the market.
-
What is Invoice to Cash Process
In this article, we will explore the business process area known as; Invoice to Cash; Also known as I2C. Learning objectives for this lesson are: Meaning of Invoice to Cash Process; Sub Processes under Invoice to Cash; Process Flow for Invoice to Cash; Key Transactions Fields; Key Setups/Master Data Requirements.
-
Treasury Management - Benefits
Effectively using treasury management with cash management and trade finance products brings tangible benefits to both corporates and financial institutions. Let us discuss some tangible benefits of treasury function.
-
Many different accounts are used in finance. Understand the representation and nature of clearing account in context of accounting, finance and ERP Systems.
-
Collection Float is the time spent to collect receivables. Collection float is the sum total of time taken by Invoice Float; Mail Float; Processing Float and Availability Float. Explore more!
-
Complete Bank Reconciliation Process
Bank Reconciliation Process is a eight step process starting from uploading the Bank Statement to finally posting the entries in General Ledger. Learn the Eight Steps in Detail!
-
The objective of Financial risk management is to protect assets and cash flows from any risk. Treasury function works to accurately assess financial risks by identifying financial exposures including foreign exchange, interest rate, credit, commodity and other enterprise risks. Learn about the various risks that are managed by treasury.
-
Treasury has increasingly become a strategic business partner across all areas of the business, adding value to the operating divisions of the company. Managing activities that were traditionally carried out within the general finance function. Learn about the drivers for this change.
