Can anyone explain to me why pending and cleared boxes are part of this module? They seem unnecessary to me. In my world, when I transfer between accounts, these transactions occur simultaneously.
Yeah there are some companies who still use cheques to make transfers in my world and the cheques may not be delivered on that same day.
Also in my country transfer between two different banks takes days to clear (even if it not by cheque but by other funds transfer platforms/electrical platforms) . So if a company has an account in Bank A and another in Bank B, transfers between them keep a while in transit before arriving in the destination account.
The time difference can really cause reconciliation problems if the clearing date tool is not available.
Thanks for the reasoning- makes sense now.
It isn’t just your country, @Abeiku. And as another example, large electronic transfers, while technically “complete” may not be “available” for many days, depending on bank policy. (Of course, what this really does is allow the bank to use your money interest free for a few days.)
Or, when you pay a credit card statement, you record that as an inter account transfer. But the credit card issuer may not credit your account for several days.
All very clear now.
It’s called ‘Float’ in Malaysia. Common Terms among bankers.