Usage of Clearing Account in Importing Outstanding Bills and Invoices

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 VersAccounts 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)

Step 1: Enter the inventory, receivables and payables:
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.
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: Enter the other balance sheet closing balances
When we enter the balance sheet as a balanced entry, we leave out the values of the inventory, receivables and payables, as they have already been posted.
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