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Best Practices for Clearing, Default and Suspense Accounts

Across campus, departments use clearing, default and suspense accounts for a variety of reasons (Procurement Cards, CTS Travel, Credit Card Sales, etc.).

Clearing and suspense accounts are set up to temporarily hold transactions until they can be reallocated to the appropriate revenue or expense accounts. Traditionally, clearing accounts are used to hold transactions for later posting and to ensure information is recorded correctly and completely, while suspense accounts are typically used when there appears to be a problem with the transaction and further research is required. At UCD, we also utilize default accounts to temporarily hold transactions either due to a processing error (i.e. from a feed) or for central processing activities (i.e. procurement card transactions). UCD departments sometimes use the terms “clearing”, “default” and “suspense” interchangeably.


Identifying Clearing Accounts

In an effort to standardize and allow for transparency, any accounts that will be used to temporarily hold transactions should include one of the following terms in the account name:

  • CLEARING
  • CLRG
  • DEFAULT

It is also recommended that the detailed Account Description also include the term “clearing”.


Guidelines for Oversight and Monitoring

Given the nature of clearing accounts, the following activities should be performed by the fiscal officer:

  • Review clearing accounts on a monthly basis regardless of balance