Usage of Clearing Account in Importing Opening Inventory, Outstanding Bills/Payables and Invoices/Receivables in Getting Started

Our basis for using a clearing account (Called Suspense Clearing in your Chart of Accounts) for the balancing entry when importing inventory levels, outstanding receivables, and outstanding payables is as follows:

a) The starting balance sheet in Versa must match the closing balance sheet of the legacy system.
b) The Total Assets (A) and the Total Liabilities (B) and Equity are always equal. (So, A = B)

c) As of June 2024, the Suspense Clearing account is no longer used for importing inventory levels, outstanding receivable and outstanding payables. For inventory, the main Inventory Asset GL account is used as the clearing account. For outstanding receivable, the main Accounts Receivable account (the one without any customer assigned to) is used. For outstanding payable, the main Accounts Payable account (with one without any supplier assigned to) is used. Note that for Inventory Asset , Accounts Receivable, and Accounts Payable accounts, there are main GL accounts that is not normally posted to (except in getting started import). Then there are sub accounts for each product under the main Inventory Asset account. There is sub accounts for each customer under the main Accounts Receivable Account. There are sub accounts for each supplier under the main Accounts Payable Account.  We will refer to each of the 3 accounts as the 'Suspense Clearing Accounts' being used in Step 1 and Step 2. For financial reports, all accounts (main and sub accounts) under inventory asset, accounts receivables and accounts payables all roll up into the same lines for inventory asset, accounts receivable and payables.

Step 1: Imports the opening inventory, receivables and payables in getting started:
We will let the total values of the inventory, outstanding receivables, and outstanding payables be represented as X, Y and Z, respectively.
When posting these totals, balancing entries -- CREDITS for inventory and receivables, DEBITS for payables -- posted to the Suspense Clearing account.

For opening inventory, the entry posted is DEBIT Inventory Asset Sub Account for the product, CREDIT Suspense Clearing.

For opening accounts receivable, the entry posted is DEBIT Accounts Receivable for the customer, CREDIT Suspense Clearing.

For opening accounts payable, the entry posted is CREDIT Accounts Payable for the supplier, DEBIT Suspense Clearing.

So, the balance of the Suspense Clearing account will be (X + Y) - Z (a credit balance).
After these values have been posted, total assets will be equal to X + Y; total liabilities will be equal to Z.

Step 2: Import the other balance sheet accounts opening balances in Getting Started, Trial Balance import.
When we enter the balance sheet accounts from trial balance import in getting started, we leave out the values of the inventory, receivables and payables, as they have already been posted.

As of June 2024, we will post the values for opening inventory, accounts receivables and accounts payables when trial balance is imported.
For that balanced entry, the value of the asset closing balances will be A - (X + Y); the value of the liability/equity closing balances will be B - Z.
Unless Z equals X + Y, which is extremely unlikely, this transaction will require a balancing entry of Z - (X + Y)  to the clearing account.

The balancing entries to the Suspense Clearing account will cancel each other, as:

 [(X + Y) - Z] + [Z - (X + Y)] = 0