Clearing Account
A clearing account is a temporary holding place in bookkeeping where money is briefly stored until it can be properly sorted into its final destination account. Think of it like a waiting room for money: funds stay there until bookkeepers can decide where they should ultimately go. Companies use clearing accounts to keep their books organized when they're handling lots of transactions or when they're not immediately sure how to categorize certain payments or deposits. It's similar to having a sorting tray on your desk where you put papers until you know where to file them permanently.
Examples in Resumes
Managed daily reconciliation of Clearing Account transactions averaging $50,000
Implemented new procedures for monitoring Clearing Account activities
Reduced Clearing Account reconciliation time from 3 days to 1 day through process improvements
Supervised Suspense Account and Clearing Account operations for a team of 5 bookkeepers
Typical job title: "Bookkeepers"
Also try searching for:
Where to Find Bookkeepers
Professional Organizations
Online Communities
Job Boards
Example Interview Questions
Senior Level Questions
Q: How would you handle a clearing account that hasn't been reconciled for several months?
Expected Answer: A senior candidate should explain their systematic approach to catching up on reconciliations, including prioritizing recent transactions, investigating old unreconciled items, and implementing new procedures to prevent future backlogs.
Q: What internal controls would you implement for managing clearing accounts?
Expected Answer: They should discuss regular reconciliation schedules, approval processes for transfers, documentation requirements, and monitoring procedures to ensure clearing accounts don't carry balances for too long.
Mid Level Questions
Q: What is the purpose of a clearing account and when would you use one?
Expected Answer: Should explain that clearing accounts temporarily hold funds until they can be properly categorized, giving examples like customer payments pending allocation or expenses waiting for proper documentation.
Q: How often should clearing accounts be reconciled and why?
Expected Answer: Should discuss the importance of frequent reconciliation (usually daily or weekly) to maintain accurate books and catch any discrepancies quickly.
Junior Level Questions
Q: What's the difference between a clearing account and a regular account?
Expected Answer: Should explain that clearing accounts are temporary holding places for money while regular accounts are permanent homes for categorized transactions.
Q: What types of transactions typically go through a clearing account?
Expected Answer: Should mention examples like uncategorized deposits, payments pending allocation, or transactions needing additional documentation.
Experience Level Indicators
Junior (0-2 years)
- Basic understanding of accounting principles
- Data entry and basic reconciliation
- Using accounting software
- Filing and documentation
Mid (2-5 years)
- Independent account reconciliation
- Problem-solving accounting discrepancies
- Process improvement
- Training junior staff
Senior (5+ years)
- Complex reconciliation management
- Internal control implementation
- Team supervision
- Process development and optimization
Red Flags to Watch For
- Unable to explain basic reconciliation processes
- No experience with accounting software
- Poor attention to detail
- Lack of understanding about the temporary nature of clearing accounts
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