Clearing – A business concept

Clearing – A business concept

Unravel the mystery behind clearing. Why we use clearing accounts. Find the relevance of word "Clearing" in business context.

In banking and finance,

Clearing denotes all activities from the time a commitment is made for a transaction until it is settled.

In trading, clearing is necessary because the speed of trades is much faster than the cycle time for completing the underlying transaction.

For example once a buyer agrees to buy, he can issue a cheque to the seller as proof of commitment. The seller need to get this cheque cleared through the banking system to turn the promise of payment into actual movement of money from one bank to another. This example is generally referred to as cheque clearing.

Some other examples of clearing are securities clearing, cash clearing etc.

Clearing – A business concept

cashmgmt

Related Links

You May Also Like

  • Sources of Cash

    Sources of Cash

    What are the various sources of cash in an organization. Which sources increase the cash available with the enterprise and which sources results in outflow of the cash? Let us explore!

  • Complete Bank Reconciliation Process

    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!

  • Treasury – Funding Management

    Treasury – Funding Management

    The objective of funding Management is to implement strategies that lead to the best borrowing rates and lower investment costs. Learn how treasury aids in loans and investment management functions.

  • Cash Management Process

    Cash Management - Process

    How the inflow and outflow of cash is linked to the operating cycles of the business? Learn the cash management process in an enterprize and it's key components.

  • Cash Management - Benefits

    Cash Management - Benefits

    Effectively using cash management with trade finance products brings tangible benefits to both corporates and financial institutions.Learn the various benefits of cash management process.

  • Account Reconciliation – How?

    Account Reconciliation – How?

    Account Reconciliation – How? Learn the three key attributes to perfom account reconciliation.

  • What is Order to Cash

    What is Order to Cash

    Learning objectives for this lesson are: Meaning of Order to Cash Process; Sub Processes under Order to Cash; Process Flow for Order to Cash; Key Roles & Transactions; Key Setups/Master Data Requirements.

  • What is a Bank Statement?

    What is a Bank Statement?

    Have you ever wondered what is actually a Bank Statement and why it is needed. What is the information that is available in a bank statement?

  • Treasury Management - Functions

    Treasury Management - Functions

    Treasury management has become an specialized function. Treasury function helps in managing the Risk-return profile as well as the tax-efficiency of investment instruments. In larger firms, it may also include trading in bonds, currencies and financial derivatives. Learn about the various tasks, activities and imperatives, undertaken by treasuries in in today's context.

  • Account Reconciliations– Why?

    Account Reconciliations– Why?

    In the previous article we talked about the meaning of the account reconciliations. Now as you now the definition of account reconciliation, in this article let us see why it is carried out.

Explore Our Free Training Articles or
Sign Up to Start With Our eLearning Courses

Subscribe to Our Newsletter


© 2023 TechnoFunc, All Rights Reserved