What Are Clearing Accounts?
A clearing account is a temporary holding account used to track transactions that are in transit between systems, accounts, or stages of the accounting process before they are settled into their proper destination accounts.
In everyday accounting, clearing accounts help bridge timing differences and make sure that transactions are recorded accurately without distorting your financial statements.
Key points:
They are temporary — balances should ultimately reach zero once transactions are fully matched and reconciled.
They are not expense or revenue accounts themselves — they hold amounts until they are ready to be correctly classified.
Why You Might See “Duplicate” Transactions
Some customers notice a single transaction showing up multiple times in Puzzle — for example, one Brex expense appearing three times. This often leads to concerns about “double-counting” expenses.
Here’s why it happens:
1) Initial Expense Recognition
When a transaction is first recorded (e.g., a Brex charge), Puzzle may temporarily post it through a clearing account so it shows up in your Income Statement with the correct category and timeline.
2) Clearing Through Intermediate Accounts
Later, the actual payment activity flows through one or more clearing or intermediary accounts (e.g., credit card clearing or bank clearing). This ensures the transaction is matched and reconciled properly with your bank or card feed.
3) Settlement or Final Posting
Finally, once the item is fully reconciled and matched, the amounts in the clearing account flow out and get posted to the correct GL accounts.
Because these steps can involve multiple ledger entries representing:
The original expense
The movement through clearing accounts
The final settlement
You may see multiple lines in sub-ledgers or reports, even though the end result in your financial statements reflects only one actual expense. This does not mean your expense was counted more than once — it’s simply the bookkeeping system tracking each part of the flow as it clears.
How Clearing Accounts Work in Puzzle
Puzzle uses clearing accounts to help with:
Timing differences between when a payment is initiated vs. when it settles in your bank or card feed
Reconciliation between connected platforms (e.g., Brex, bank/credit card feeds)
Accurate reporting without distorting revenue, expense, or cash flow figures
In Puzzle’s clearing accounts:
Transactions sit temporarily until Puzzle can match them to a corresponding event (e.g., invoice/payment, bank feed entry) and move them to correct accounts.
Once matching is complete and the entries have flowed to their final accounts, the clearing account should go to zero. To record both the debit and credit for a bank transaction directly in Puzzle, follow these steps:
Enter Positive Amounts for Money In:
When recording money coming into your account, input the amount as a positive value. This action debits the bank account.
Enter Negative Amounts for Money Out:
For money leaving your account, input the amount as a negative value. This action credits the bank account.
Select the Appropriate Category:
The offset (or other side) of the transaction will automatically post to the category you select for the transaction.
If a clearing account doesn’t clear to zero, that may indicate:
A missing match (e.g., a payment/expense not yet recorded or incorrectly debited or credited)
A timing difference between feeds
An unresolved transaction requiring review
Example: Transaction Flow
A credit card charge posts — Puzzle records the amount in a clearing account.
Puzzle maps the charge to an expense category (e.g., “Office Supplies”).
When the payment is reflected in your bank or card feed, Puzzle posts corresponding entries moving the amount out of the clearing account into the correct bank/cash and expense accounts.
The net result is:
One expense recorded
No duplicate expense in GL
Clearing account returned to zero
Best Practices
📌 Track Clearing Balances
Make sure your clearing accounts are regularly reconciled so they clear to zero. If you see persistent balances, investigate outstanding or unmatched transactions.
📌 Use Reconciliation Reports
Puzzle provides reconciliation support to compare source data with clearing balances — this helps verify completeness. To verify reconciliation and balances in Puzzle, follow these steps:
Navigate to Accounting → General Ledger.
Select the relevant clearing account (e.g., a general clearing account used for reconciliation purposes).
Review the account details to ensure:
The journal entry and the bank withdrawal net to zero.
The account balances as expected.
📌 Understand Timing Differences
Recognize that feeds from banks, cards, and payment processors don’t always post at the same moment. Clearing accounts help bridge those gaps without distorting your final figures.
Review Questions (for Quick Troubleshooting)
Do you see multiple entries for a single transaction? → That’s likely an intermediate clearing flow, not double counting.
Is the clearing account balance not zero? → Investigate unmatched entries, timing differences, or missing feeds.
Have you reviewed the General Ledger for reconciliation? → Navigate to Accounting → General Ledger, select the clearing account, and ensure entries net to zero and balances align.
You'll know there is a problem if you notice an unchanging balance on the Balance Sheet of either of these clearing accounts. You'll likely be alerted of this problem on the Monthly Checklist or Inbox as well.
Salaries & Benefits: Clearing
If you use Rippling or Gusto, we automated the journal entries for your payroll, so you just need to make sure the cash transaction from the bank goes to Salaries & Benefits: Clearing.
If you don't use Rippling or Gusto, you can also add manual payrolls to automate part of this process for you. If you prefer, and are comfortable with how to account for payroll on your own, you can simply split the transaction without having to enter any payrolls.
Credit Card Payments - Clearing
Use this account to put all of the payments from your bank to your credit card.
If you pay for a credit card out of a personal account (or other account that is not connected to Puzzle), then you should mark that as an Accounts Payable from the business to you or that other business. If you plan to leave the money in the business, you can mark that as a contribution of equity. LLC would be Member Capital, C-Corp would be Additional Paid in Capital.
Employee Reimbursement - Clearing
We automate some of the info from your reimbursements in Gusto or Rippling, but you may need to break the details down further.
The best way to resolve these outstanding balances is to split the individual transactions to match the expense report you relied upon to make the reimbursement.
Alternatively, if you use Ramp, we integrate most-closely with them for accounting for reimbursements automatically.
Bank Transfers in Transit: Clearing
Use this account for all transfers in and out of company bank, treasury, and other investment accounts.
Make sure both sides of the transfer are set to the same account so that they clear each other out.
Transfers in Transit: Payment Processor
Use this account for all transfers in and out of company bank accounts to and from your payment processor (Stripe).
Make sure both sides of the transfer are set to the same account so that they clear each other out.