Other Payment Clearing Issue

Reconciliation of non-Square payment clearing accounts in Xero. When customers pay via TryBooking bank transfers, cash, EFTPOS (Zeller), or other methods, funds must be temporarily held in clearing accounts pending bank deposit and matching to revenue. These accounts should trend toward zero but currently show unreconciled balances due to revenue double-counting and tender categorisation errors.

The Issue

Pride’s non-Square payment methods create clearing account balances that do not reconcile cleanly between:

• Revenue recognised in Xero (via Amaka Daily Sales Sync or manual invoice)
• Bank deposits for those payment types
• Physical cash float or settlement records

Specific Payment Methods

1. TryBooking Bank Transfers (SQ-600002: Other Payment Clearing)

• Current balance: $27,968.32 (should trend toward $0)
• Growth pattern: $632 (FY23) → $2,677 (FY24) → $15,894 (FY25) → $27,968 (now)
• Root cause: Revenue double-counted. When bank transfers arrive, bookkeeper codes them directly to revenue account (200) instead of crediting the clearing account (SQ-600002)
• Result: Revenue recognised twice—once via Amaka invoice (SQ-200000 debit) and once via bank receipt (account 200 credit)
• Process failure: No process exists to match incoming bank transfers to pending TryBooking entries; clearing account never credited

2. Cash Payments (SQ-600000: Square Cash Clearing)

• Current balance: ($396,364.25) — credit (liability) balance when should trend toward $0
• Composition:
  • $343,663.85: Correct ATM float reclassification (deliberate multi-year adjustment; should remain)
  • ~$209,000: Zeller EFTPOS deposits miscoded to SQ-600000 (double-hit when Zeller settlement also deposits to bank)
  • ~$20,700: Structural drift from FY24 (no year-end clearing journal; 3-week integration gap Aug 2024)
• Root cause: Staff ring Zeller card payments as “Cash” on Square POS (Zeller not integrated to Square); Amaka reads as “Cash” and debits SQ-600000; Zeller settlement also arrives at bank coded to SQ-600000
• Correction required: Reclassify Zeller deposits to dedicated Zeller clearing account; train staff on tender categorisation

3. EFTPOS / Zeller Settlements

• Processed as part of cash clearing above (SQ-600000)
• Zeller payments entered on Square as “Cash” tender
• Double-coded: once via Amaka clearing journal, once via settlement bank deposit
• Requires creation of dedicated Zeller clearing account and staff tender training

Accounting Best Practice

Clearing accounts are purely mechanical. They should:

• Trend toward zero over time (they are temporary, not permanent balances)
• Always match reconcilable events (e.g., SQ-600002 should balance to list of bank transfers pending)
• Never show unusual growth patterns or reversed balances
• Require reconciliation against source data (bank statements, transaction logs) regularly
• Be cleared via matching journal entries when payments arrive

Red flags:

• Clearing account with balance opposite to account type (liability account with debit balance, asset account with credit balance)
• Clearing account with growing balance over time (should shrink as payments are matched)
• Clearing account with long-standing items older than 1 week (indicates unmatched transactions)
• Revenue recognised but clearing account not credited when payment arrives

Correction Process

For TryBooking Bank Transfers (SQ-600002)

1. Year-end clearing journals — For each FY, create journal entry:

   • Debit: Revenue (200) — reversal of double-count
   • Credit: SQ-600002 (Other Payment Clearing)
   • Amount: Balance of unmatched TryBooking entries at year-end

2. Ongoing process — When bank transfer arrives:

   • Create bank receipt crediting SQ-600002 (NOT revenue account)
   • Debit bank account
   • Match to original TryBooking entry (Amaka invoice)
   • Result: SQ-600002 trends toward $0

3. Reconciliation — Weekly: List pending TryBooking bank transfers → match to SQ-600002 balance → investigate variances

For Cash / Zeller (SQ-600000)

1. Reclassify Zeller deposits — Identify all Zeller settlement bank deposits miscoded to SQ-600000 → journal to dedicated Zeller account (recommend SQ-600003)

2. Create ATM float account — Move all ATM reclassifications to separate account (e.g., SQ-600004) for clarity

3. Staff training — Ensure Zeller card payments are entered as separate tender category on Square POS (not “Cash”)

4. Bank reconciliation — When physical cash is deposited, create bank receipt matching deposit amount to SQ-600000 balance

Related Pages

• Clearing Account Cycle — clearing account mechanics and intended flow
• Square Cash Clearing Issue — detail on Zeller EFTPOS miscoding
• Amaka — how Amaka syncs POS to clearing accounts
• Square POS — POS system generating transaction flow
• Bank Reconciliation — matching clearing accounts to bank statements
• Financial Reporting — impact of unreconciled clearing accounts on accuracy