Trust accounting comes down to matching two things: who the money is owed to, and how much cash is actually sitting in the bank. Every dollar that comes into a trust account belongs to someone: an owner, the management company, a tax authority, or a guest who paid a deposit for a future stay. Clearing tracks all of that as the LIABILITY side. The actual dollars in the bank are the CASH side. Balancing the trust account means proving those two sides match.

Full Concept Video : Understanding and Reconciling Trust Account Balances

Also referred to as "stakeholders." In Clearing, these are tracked as the allocations using the accounting field. Here is a sample breakdown of how Liabilities are allocated for a specific reporting period.

This is the cash that is actually sitting in the bank, as of the same reporting date:

Cash in Transit bridges a timing gap between when Clearing recognizes a booking on a statement and when the related funds actually settle in the bank. If a booking is recognized on or before your report date but the guest's payment doesn't post to the trust bank account until after that date, the liability exists in Clearing before the cash does. Cash in Transit captures that gap so your liabilities and cash still reconcile to zero, rather than showing a false discrepancy.

Total Liabilities − Cash in Bank − Cash in Transit = Net. The goal is always a net of $0.

$50,000 − $48,400 − $1,600 = $0

If the net isn't zero, troubleshoot with these steps:

A guest books a $1,000 stay and pays in full at booking. The management agreement is a 15% commission, and the local jurisdiction charges a 5% occupancy tax.

💡 Tip: Why cash in transit exists: if this booking is recognized in Clearing on March 31 (so it lands on the March statement), but the guest's payment doesn't actually settle in the bank until April 1, the $1,000 liability exists in Clearing on March 31 with no matching bank balance yet. That $1,000 shows up as Cash in Transit on the March 31 report, bridging the gap until the deposit posts and becomes ordinary Cash in Bank.

Full Trust Liability Report Video: How to Use the Trust Liability Report

Go to Reporting → Liability Reports → Trust Liability.

Liabilities are calculated based on how everything is allocated in Clearing as of the date you select. This includes balances owed to:

Cash is made up of all your connected bank balances that you have marked as a "Trust Account" in Clearing, whether that's one trust account, multiple trust accounts, or cash payments recorded via journal entries. Click the current Cash balance amount to see the amount by account, Day 0 balance, Activity since Day 0, and the current balance.

Cash in transit accounts for timing differences. If a booking is recognized in Clearing before your selected date but the related bank transaction posts after it, that amount shows here so your liabilities and cash still reconcile correctly.

💡 Tip: Click the info icon next to Cash in Transit for more detail on how it's calculated.

The math: Total Liabilities − Cash in Bank − Cash in Transit = Net. Your goal is always a net of zero.

Before running this report, read all instructions and configure the following settings. This ensures your liability tracking starts from an accurate opening position.

Tag every bank account that holds advance deposits for reservations after your day zero date. You can tag multiple accounts.

For each tagged account, enter the account balance as of the day before your day zero date. This ensures your day zero liability matches your day zero cash.

This should be the start date of your first owner statements generated in Clearing.

⚠️ DISCLAIMER: If you haven't yet generated statements in Clearing, only set this date if you're confident in the most recent owner and management payments made prior to joining Clearing. Otherwise, generate at least two months of statements in Clearing first, then use those numbers as your opening balances. Two months gives you enough reconciled history (bookings and bank accounts) to trust the resulting balances.

Your opening balance is a record of all liabilities as of your day zero date, including owners, management, tax, advance deposits, and any security deposits held.

To calculate it:

⚠️ DISCLAIMER: Skipping this step will cause errors. Without an opening balance, a payment you make in the following month (for example, an April payment covering March activity) will net against zero instead of against the correct prior balance, and will throw off your liability numbers by that amount.

Once your opening balances are entered, return to the Trust Liability Report. You can expand each category (owners, management, tax) to see the underlying transactions and opening balance for that allocation.

If your report doesn't net to zero, work through the below steps to troubleshoot.

Pull your Booking Reconciliation Report and check for unreconciled bookings in the period. Unreconciled bookings can push liabilities above cash when income exists in Clearing but hasn't been matched to a bank deposit yet, so the liability is recorded but the cash isn't confirmed against it. Match the income in Clearing, or remove the booking from the statement if it shouldn't be there.

Pull your Booking Reconciliation Report and check for unreconciled bookings in the period. Unreconciled bookings can also push cash above liabilities, for example a cancelled booking where funds were received but the booking was never added to a statement, so no liability was ever created for that cash.

Your trust account may be over or underfunded, often from a prior transfer that wasn't completed. Track down the source and correct with a transfer in or out of the trust account to bring the net back to zero.

Need more help?

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