- Clearing Account Overview
- Reconciling your Bank Account
- Reconciling your Clearing Account
- Important Additional Information
1. Clearing Account Overview
Bill.com Payments and Your Bank Account
When you pay bills through Bill.com, funds are transferred from your bank account into a Bill.com bank account. Payments are then sent to your vendors from the Bill.com bank account (this is part of what makes our payments process so secure; your bank account is never exposed on checks, or in payment information). On the Process Date, we withdraw the total amount needed for payments in a lump sum. When you review your account details or bank statement, you will see the batch withdrawal(s), not separate withdrawals for each bill payment.
Withdrawing Funds: One lump or two?
We used to make just one withdrawal from your bank account for all the payments you have scheduled on a given Process Date. However, we now make two "scheduled payment pickups" each day.
- All payments scheduled before 3pm PT on the banking day before the Process Date will be picked up during the first pick-up run, and will be withdrawn from your bank account as a lump sum.
- Any payments scheduled after 3PM PT on the same day, with the same Process Date, will be picked up during the second pick-up run, and will be withdrawn from your bank account in a second lump sum.
- Example:
- Monday at 12pm PT, you schedule 3 payments with Tuesday as the Process Date (total: $300). Four hours later, at 4pm PT, you schedule 3 more payments with Tuesday as the Process Date (total: $400). On Tuesday, two lump-sum withdrawals are made from your bank account - one for $300 and one for $400. All your bills are still paid on time, the same as if we had just made one lump-sum withdrawal.
Why the Clearing Account Helps
After your bills are paid, we sync the bill payments back to your accounting software, and link them to their bills. By syncing them to the Clearing Account, rather than your bank account register, you can reconcile easily, without having to match the lump sum withdrawal to multiple transactions.
2. Reconciling Your Bank Account
To simplify reconciliation, we make use of two clearing accounts. Your Bill.com account is pre-populated with the following accounts:
- Accounts Payable: Bill.com Money Out Clearing
- Accounts Receivable: Bill.com Money In Clearing
These accounts are set as the default accounts for syncing bills and invoice payments in your sync preferences.
Bill Payments
Scheduled bill payments, including those scheduled for future dates, will sync to the Bill.com Money Out Clearing account in your accounting system. When the sync runs on or after the process date, we'll create a Funds Transfer journal entry, which posts a debit to the Clearing account, and a credit to the Checking account.
In the end, the Clearing account should balance to $0.00 for the day.
Customer Payments
Payments made to you are posted in the Bill.com Money In Clearing account, along with the dates customers are scheduled to pay. The Funds Transfer journal entry is posted with the dates the funds arrive in your bank account. Therefore, these dates may differ by about 3-5 days. Because of this delay, there may be an overlap of transactions preventing your register from balancing out to $0.00 at the end of each day.
3. Reconciling Your Clearing Accounts
To reconcile your Clearing Account(s), enter $0.00 as both the beginning and ending balances, then clear all transaction for the period. Use the following reports as guidelines:
- Payables Reports: Funds Transfer Detail for Bill.com Payments
- Receivables Reports: Funds Transfer Detail for ePayments Received
(Note: Locate these reports by clicking Reports at the top of the page in your Bill.com account)
Note: Receivables payments scheduled for the end of the month may not show as deposited until the beginning of the following month. When reconciling your Bill.com Money In Clearing account, you may want to extend the period ending date by a few days.
4. Important Additional Information
- If you sync with Xero, reconciling the bank account will not automatically mark the matching line item(s) in the Bill.com Money Out Clearing account as Reconciled. If you want each line item in the Clearing Accounts to be marked as Reconciled, you will need to do so manually.
Adapted in part from Judie McCarthy.