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ar3
Level 1

How do i categories a wash in banking?

 
1 Comment
Moderator

Re: How do i categories a wash in banking?

Glad to have you here, @ar3!

 

Let me share a few insights about a wash (or clearing) account and guide you in getting started.

 

First off, I've found a related interaction where @Rustler said, "A clearing account is just an expense or asset account you use to move value into and out of. It is not a type of account, rather clearing is the name." So, I recommend asking your accountant how to specifically categorize each transaction associated with your wash account.

 

Secondly, if you haven't already, there's a great chance that your accountant may ask you to create a clearing account in your Chart of Accounts.

 

Here's how to create a clearing account:

  1. Go to Accounting, then Chart of Accounts.
  2. Click New.
  3. Under Account Type, select Bank.
  4. Choose the appropriate bank account on the Detail Type.
  5. Type in Clearing Account in the name field.
  6. Click on Save and close.

You may read this article to for more details about the processes: Matching Bill Payments Using a Clearing Account.

 

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