What is a settlement account?

Please note:
The information presented below is general and indicative. It is not necessarily correct or applicable to your particular business.

We recommend that you consult your accountant, financial assistant or bookkeeping firm before completing or using settlement accounts in your accounting records.

Here are examples and an explanation of what the settlement account is supposed to be used for.

1. The examples below assume that the payment method ‘Cash’ is used.

2. In all bookkeeping, all entries should add up to zero. If some accounts are reduced, others must
    always be increased by the same amount.

3. When a sale is made, the cash account is increased (banknotes are put in the cash drawer) and, to      balance, the VAT and sales accounts are decreased.

4. When a bill of exchange is deposited, the cash account is also increased (banknotes are deposited        in the cash drawer) but instead the settlement account is used to balance the accounting entry.

5. In the case of a return, the cash account is reduced and the VAT and sales accounts are increased.

6. On a bill of exchange withdrawal, the cash account is decreased and the settlement account is
    increased.

7. At the start of a sales period, you can record how much you have in the change account. This is really
    just a deposit of change and is recorded in the same way: the change account is increased and
    the settlement account is decreased.

8. When you withdraw a Z-report (close the period) all cash accounts are reset to zero. To balance this,
    the settlement account is also used here, in exactly the same way as if you had made a bill of exchange
    withdrawal on the amount that was in the cash account before the period was closed.

To check the balance of your accounting accounts during the day, you can produce an X-report. All accounts that are not currently 0 are shown in the accounting data.

When you make a change deposit or withdrawal, you obviously have a purpose for it, which should be recorded. You may use the money to buy coffee, make purchases of goods, pay out a gambling win from ATG, etc. The cash register does not support the direct creation of these accounting entries, but this must be booked in another way, with the settlement account as a counter account. The money thus only ‘stops’ on the settlement account in our system.

Example of when a settlement account is used