Overview
A Merchant Clearing Account is used to temporarily hold customer payments until the related bank deposits are received. Because deposits usually arrive 2–4 days after the payment date, this account almost always carries a balance.
The challenge for accountants is understanding what makes up that balance and whether it is correct. Xenett automates this entire review process so you can quickly reconcile the balance without exporting data to Excel or doing manual lookups.
Common Problems This Review Solves
Without automation, Merchant Clearing Accounts often create confusion because:
Payments and deposits occur on different dates
Old, unmatched transactions stay hidden in the balance
Differences may originate from prior months or even years
Accountants spend hours exporting ledgers and matching transactions manually
Xenett eliminates this manual effort by clearly breaking down the balance and isolating only the transactions that actually need attention.
How a Merchant Clearing Account Works
Payments are recorded first and posted to the debit side of the clearing account
Bank deposits are recorded later and posted to the credit side of the same account
The ending balance should normally represent only the most recent 2–3 days of payments that will clear in the next period
If the balance includes older transactions, it indicates reconciliation issues that need investigation.
How Xenett Automates the Review
Xenett analyzes up to 12 months of clearing account data and automatically categorizes the ending balance into three clear sections:
Deposits Clearing Next Period
Payments that are recorded in the current period but deposited in the following period.Unmatched Payments and Deposits
Transactions within the last 12 months that do not offset each other.Opening Balance Difference
Any unresolved difference originating from periods older than 12 months.
This structure gives you instant clarity on where the balance is coming from.
Setting Up the Merchant Clearing Account Review
To enable this review in Xenett:
Go to Review Points
Click New → Task / Review Point
Select Merchant Clearing Account
Map the clearing account from your balance sheet (one-time setup)
Once mapped, Xenett automatically begins analyzing the account every period.
How to Review the Balance
When you open the Merchant Clearing Account review, you will see:
1. Deposits Clearing Next Period
Shows payments from the current month that will be deposited in the next month
Ideally, this amount should equal the ending balance
If it matches, the account is reconciled.
2. Unmatched Payments and Deposits
Displays payments and deposits from the last 12 months that do not offset
Matching transactions are automatically filtered out
You only work with items that actually cause differences
Manual Matching
In some cases:
Multiple payments may match a single deposit
Xenett cannot auto-match these scenarios
You can manually select the related transactions and click Match to clear them.
3. Opening Balance Difference
Represents unresolved differences from periods older than 12 months
Displayed as a single opening balance amount
This ensures historical data limitations do not block your current reconciliation.
What to Investigate When Differences Exist
Once only true unmatched items remain, you can investigate efficiently:
Payments coded to the wrong account
Deposits recorded to a different ledger account
Missing or duplicated entries
Xenett ensures your time is spent only on meaningful exceptions.
Key Benefits
No Excel exports or formulas
Automatic matching of the majority of transactions
Clear breakdown of the ending balance with one click
Focus only on transactions that actually cause differences
Faster, cleaner month-end close
Summary
The Merchant Clearing Account review in Xenett gives you instant visibility into your clearing balance by separating normal timing differences from real reconciliation issues. By automating transaction matching and highlighting only true exceptions, Xenett saves hours of manual work and makes balance sheet reviews faster, clearer, and more reliable.