What is clearing entry in SAP FI - Financial Accounting?

SAP Term: clearing entry

• Component: FI

• Component Name: Financial Accounting

• Description: Journal entry created for the purpose of clearing open items. A clearing entry is created for each company code involved in clearing. Clearing entries can contain manually entered items as well as items generated automatically, such as cash discounts or tax adjustments.

Smart SAP Assistant

• Key Concepts: 
  A clearing entry is a type of accounting transaction used to offset the balance of two or more accounts. It is used to reduce the number of open items in an account and to simplify the reconciliation process. Clearing entries are typically used in the Financial Accounting (FI) component of SAP. 
  
  How to use it: 
  In SAP, a clearing entry is created by entering a document with two lines. The first line is a debit entry for the amount to be cleared, and the second line is a credit entry for the same amount. The two lines are then linked together with a clearing key, which indicates that they are part of a single transaction. 
  
  Tips & Tricks: 
  When creating a clearing entry in SAP, it is important to ensure that the debit and credit amounts are equal. If they are not, the transaction will not be accepted by the system. Additionally, it is important to ensure that the accounts being cleared are valid and that they have sufficient funds available for the transaction. 
  
  Related Information: 
  Clearing entries can also be used to transfer funds between different accounts within SAP. This process is known as inter-company transfer and can be used to simplify the reconciliation process between different companies or entities. Additionally, clearing entries can be used to reconcile accounts with external vendors or customers.