Can you reconcile a clearing account in Xero?

Not in the reconcile screen. Xero's reconciliation works on bank accounts, and Xero has said it has no plans to extend it to clearing, control and non bank accounts. Set the account up as a bank type account and the tab appears, but no bank feed sits behind a clearing account to fill it. The month end check is an aged review of the account's transactions against each funder's remittance, which is what this page sets out.

Why will my clearing account not clear?

Usually one of four things: a rejected claim whose payment was never removed, a deposit that was banked but never matched to its claims, a netted fee that was posted on one side only, or a reversal in a later remittance that was never credited. Each has a different fix, so name the cause before adjusting anything.

Should the account be a bank account or a current asset account?

Both hold the balance correctly. The difference is the document at month end. A bank type account gives you a transfer, and lets a netted fee post as a spend money. A current asset account with payments enabled gives you a receive money coded to the account, and needs no extra bank account to manage.

What tax rate applies to the month end move?

BAS excluded, in every canonical template. The GST on the sale was settled on the revenue line when the invoice was raised, so the second leg only moves money that has already been earned and carries no consequence of its own.

How often should the account be reviewed?

At least monthly, and it is quicker if each remittance is allocated as it arrives rather than in one sitting. The work is proportional to the exceptions, so a practice that clears rejections weekly usually finds month end takes minutes.

Xero how to

How to reconcile a clearing account in Xero

Xero's reconcile screen works on bank accounts, and Xero has said it has no plans to extend it to clearing, control and non bank accounts. So the check is a ledger review. Post each funder payment into the rail's clearing account on the funder's paid date, match the deposit as one move out, then age what is left against each funder's usual lag.

Key facts

What Xero offers: No reconcile screen for clearing, control or non bank accounts, and no plan to build one as at September 2022¹
Votes behind the request: 171, on a request open since 2012 and still drawing comments in 2026¹
Xero's own alternative: The Account Transaction Report, or an app from the Xero App Store¹
Account type most vendors set up: Current asset, with payments enabled on the account²
Account type in the canonical templates: Bank type only in v1, so a fee line and a sweep both have somewhere to post⁶
Tax type on the clearing account: BAS excluded, on every clearing account in every canonical template⁶
How many accounts: One per settlement rail, with ten rails modelled in the allied health template⁶
Target balance: Nil for a batch once every line on that remittance has been allocated⁵

Why Xero will not reconcile it for you

The reconcile tab in Xero belongs to bank accounts. A clearing account is a holding account, and unless you set it up as a bank type account there is no statement side to agree to. Set up as one, it has the tab, but no bank feed sits behind a clearing account, so nothing arrives in it to work. The request to extend reconciliation to clearing, control and non bank accounts has been open since 2012 and carries 171 votes. Xero answered it in September 2022, saying it has no plans to develop the ability in the near future, and pointed at the Account Transaction Report and the Xero App Store instead.

This is a critical fundamental function. I take up to 3hrs to reconcile a clearing account in EXCEL every month that I didn't have to do in MYOB.¹

So reconciling a clearing account means something different from reconciling a bank account. There is no statement to tick off. What you are proving is that every dollar in the balance is a claim a funder has approved and not yet banked, and that every dollar the bank has delivered has found its invoices.

What the balance is supposed to be

A clearing account per settlement rail holds the gap between two dates: the day the funder approved or paid a claim, and the day the money reached the bank. The invoice closes on the first date, which keeps aged receivables honest, and the bank line lands on the second, which keeps the bank account looking like the bank statement.

Read that way, the balance has a meaning you can check. It is the value of claims approved but not yet banked. Anything else in there is an error with a name.

A claim that was paid by the funder but never matched to a deposit, so the money arrived and the account was never relieved.
A claim that was matched to a deposit that never arrived, usually because the deposit belonged to a different payment run.
A claim the funder rejected, where the payment was posted on submission and never removed.
A payout where the rail netted its fee, posted gross on one side and net on the other, leaving the fee behind as a residue.

The account type decides the document

Practice management vendors mostly set this up the same way. Cliniko has you create a current asset account with payments enabled, either one for all its payments or one per payment type. SimpleClinic uses a current asset account that is BAS excluded and able to take payments, and codes the bank line straight to it with a contact. ezyCollect takes the same route for its own write back, and says a bank account is the other option but one more account to manage.

The canonical Ledger Map templates go the other way and use bank type accounts only in v1. The reason is the two documents a real month needs: a spend money for a netted fee and a bank transfer for the sweep. Both of those need a bank type account at the other end. A current asset clearing account holds the balance just as correctly, and gives you a receive money instead of a transfer.

What the month end move looks like on each account type⁶³²

Account type	The bank line becomes	What follows from it
Bank type	A transfer from the clearing account to the operating account	A netted fee can be posted as a spend money, and the sweep is a transfer both sides can see
Current asset with payments enabled	A receive money coded to the clearing account, BAS excluded, with a contact such as Merchant settlements	No extra bank account to manage, and a bank rule can code the line for you

The month end routine

This is the routine that replaces the reconcile screen. It works whether the deposit came from a Medicare payment run, an NDIA batch, a plan manager remittance or a daily terminal settlement.

Receipt each invoice into its rail's clearing account on the day the funder paid, not the day the bank line appeared, and put the payment run number or remittance reference in the payment reference field.
Match the bank statement line to one move out of the clearing account for the whole deposit.
Where the rail nets a fee out of the payout, split the reconciliation so the gross goes against the clearing account and the fee against merchant and claiming fees.
Run the account transactions for the clearing account across the month and read it against each remittance.
Group whatever is left by the rail that should have paid it.
Work the exceptions one at a time, and note the reason beside each so next month's review starts shorter.

The order matters more than it looks. Matching the bank line first and allocating claims afterwards is what lets the bank feed stay current while the slower matching work happens on its own timeline.

One month, read twice

Plate 1The same four clearing accounts, before the routine and after it.

Nothing in the after column is a smaller number for its own sake. Each one is a balance somebody can explain in a sentence, which is what makes the account worth keeping.

Age what is left, by funder

A single clearing balance is not reviewable. The same account can hold a claim approved yesterday and a claim approved in April, and only one of those is a problem. Ageing is what separates them, and the threshold is the funder's own usual lag rather than a flat number of days.

Each rail pays on its own rhythm. Medicare pays per payment run per payee provider number, so a practice with several provider numbers sees several deposits for one run of claims. NDIA pays per batch. A plan manager pays per remittance and sets its own terms. A terminal settles daily. Read Medicare bulk bill and NDIS plan managed for the lag each one runs to.

Anything younger than the funder's usual lag is normal and needs no action.
Anything older than it, and still unmatched, goes on the exception list with the claim and the remittance beside it.
A balance that is negative for a rail means money was banked against claims that were never posted into the account.
A balance that never moves at all usually means the payment type in the practice system is pointed at the wrong Xero account.

What a stuck balance is telling you

Four causes cover most of what will not clear, and each one has a different fix. Naming the cause before touching anything is faster than trying to force the balance to nil.

Causes of a clearing balance that will not clear⁶⁵

What you see	What it usually is	What clears it
A claim sitting well past the funder's usual lag	The funder rejected it and the payment was posted on submission	Remove the payment, reopen the invoice, and tag the claim for resubmission
A deposit banked with nothing to match	The claims behind it were never receipted into the clearing account	Post the payments from the remittance on the funder's paid date, then match
A residue the size of a fee	The payout was netted and the reconciliation was not split	Split the bank line into the gross and the fee, and code the fee to merchant and claiming fees
A balance that grows every month	A later remittance reversed an earlier line and nothing was posted for it	Raise a credit note against the invoice and allocate it, so the net deposit still ties

Fees, batches and the limits worth knowing

Two mechanical details trip up an otherwise sound routine. The first is fees. Where a rail deducts its fee before paying, the deposit is smaller than the claims behind it, and posting the net amount against the clearing account leaves the fee stranded there. Splitting the bank line keeps the clearing side moving in full and puts the fee where a profit and loss report can see it.

The second is how you post the many payments behind one deposit. A batch deposit groups invoices into one Xero document that matches the bank line, and is a fine alternative where the deposit equals the sum of the invoices. It handles fees, reversals and short pays less gracefully than a clearing account does, which is the trade covered on batch deposit for a remittance. If you have not set the account up yet, start at set up a clearing account.

What Ledger Map does with it

Ledger Map holds one standing map for the practice, approved before anything syncs. For each deposit it posts one balanced document set: the payments into the rail's clearing account on the funder's paid date, the fee leg where the rail took one, and the move out for the deposit total. That leaves one exact match waiting in the bank feed rather than a pile of small payments to sift.

The ageing is the other half. Because every payment carries the run number or remittance reference it came from, what is left in the account can be grouped by rail and read against the funder's own document. Anything the map cannot resolve becomes a question with the options laid out, not a silent posting.

Questions

Can you reconcile a clearing account in Xero?
Not in the reconcile screen. Xero's reconciliation works on bank accounts, and Xero has said it has no plans to extend it to clearing, control and non bank accounts. Set the account up as a bank type account and the tab appears, but no bank feed sits behind a clearing account to fill it. The month end check is an aged review of the account's transactions against each funder's remittance, which is what this page sets out.
Why will my clearing account not clear?
Usually one of four things: a rejected claim whose payment was never removed, a deposit that was banked but never matched to its claims, a netted fee that was posted on one side only, or a reversal in a later remittance that was never credited. Each has a different fix, so name the cause before adjusting anything.
Should the account be a bank account or a current asset account?
Both hold the balance correctly. The difference is the document at month end. A bank type account gives you a transfer, and lets a netted fee post as a spend money. A current asset account with payments enabled gives you a receive money coded to the account, and needs no extra bank account to manage.
What tax rate applies to the month end move?
BAS excluded, in every canonical template. The GST on the sale was settled on the revenue line when the invoice was raised, so the second leg only moves money that has already been earned and carries no consequence of its own.
How often should the account be reviewed?
At least monthly, and it is quicker if each remittance is allocated as it arrives rather than in one sitting. The work is proportional to the exceptions, so a practice that clears rejections weekly usually finds month end takes minutes.

Sources

Open questions

Whether a bank type clearing account shows anything useful in Xero's reconcile tab when no feed delivers lines to it could not be confirmed from a Xero source that would load, so this page describes the review as a report rather than a screen.
The expected lag per funder that an ageing threshold would use is not carried by the canonical templates, and the lag figures in the underlying research rest on secondary summaries, so no number of days is printed here.
Whether HICAPS pays one deposit per day covering all funds or one per fund is unconfirmed in the template's own BAS agent note, so no HICAPS line is drawn here and this page does not say how many to expect.
The ranking positions for this query were not checked, on the day this page was written or on the day it was fact checked, because the web search budget was spent both times. The description of the answer landscape in the brief rests on reading the competing pages rather than on a search.

Reconciliation: ability to reconcile clearing, control and non bank accounts
Xero product ideas. Retrieved 3 Sep 2026. Source updated 14 Sep 2022.
secondary
Set up Xero for use with Cliniko
Cliniko. Retrieved 3 Sep 2026.
primary
Reconciling in Xero using a settlement account
SimpleClinic. Retrieved 3 Sep 2026. Source updated 6 Jan 2021.
secondary
Clearing account and payment reconciliation with Xero
ezyCollect. Retrieved 3 Sep 2026. Source updated 17 May 2024.
secondary
NDIS remittance processing in Xero
RemitClear. Retrieved 3 Sep 2026. Source updated 15 Apr 2026.
secondary
Allied health by funding source, the canonical template
Ledger Map. Retrieved 3 Sep 2026.
primary
Account Transactions report
Xero Central. Retrieved 4 Sep 2026.
primary

Review

Last reviewed 3 Sep 2026 by Shane

General information for Australian allied health practices, not tax advice. Confirm a treatment with your BAS agent or accountant before you post it.

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