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The clearing process is used for Accounts Payable vendors that are also Accounts Receivable customers. You can apply the Accounts Receivable balances automatically or individually to the Accounts Payable balance. After the clearing process is completed for a vendor/customer, transactions are recorded in both Accounts Payable and Accounts Receivable.
Warning If you linked multiple customers to a single vendor, you must verify that the amount being cleared from the customer to Accounts Payable does not exceed the vendor's balance, or the vendor's account may have a negative balance.
The clearing process applies the Accounts Payable balance to the Accounts Receivable open invoice balance; it clears the oldest invoices in the account first and applies the Accounts Payable balance until it is zero. This process creates payments in Accounts Receivable with a check number of CLEARING.
Note Bank code Z is used during the clearing process.
