What is Cleared Payment?

A cleared payment is a payment that has been fully processed and the funds have been confirmed as available in the recipient's bank account. When a client sends a payment -- by check, ACH transfer, or wire -- the payment goes through a processing period before it is officially cleared. During this period, the funds may appear as 'pending' in your bank account but are not yet available for withdrawal or use. A payment is considered cleared when the bank has verified that the funds are available in the payer's account and has transferred them to your account with finality. For freelancers and small business owners, marking an invoice as paid in your accounting records should wait until the payment has cleared -- not when it was promised, sent, or even when it appears as pending.

Payment clearing works differently depending on the payment method. ACH transfers typically take 1 to 3 business days to clear; wire transfers usually clear the same day or next business day; paper checks may take 2 to 5 business days to clear depending on the bank's hold policy and the amount. Credit card payments processed through a payment processor like Stripe or Square typically clear within 1 to 2 business days and are deposited net of processing fees. The clearing process involves the payer's bank verifying that funds are available, the payment network routing the funds, and your bank accepting and crediting the deposit. A payment is not truly cleared until it is no longer subject to reversal -- for example, a check can be returned for non-sufficient funds (NSF) up to several days after it initially appeared in your account.

For freelancers and small business owners, the distinction between a received and a cleared payment matters most for cash flow management and accounting accuracy. Recording a payment as cleared before the funds actually settle can cause you to over-spend, under-fund your tax account, or make business decisions based on money that is not yet truly available. This is especially important for large checks, where banks often place extended holds. It also matters for closing invoices in your accounting system: an invoice should be marked as paid only when the corresponding payment has fully cleared your bank account. For recurring retainer clients paying by ACH or check, establishing a regular billing and payment cycle reduces the uncertainty around clearing timelines.

A cleared payment is one that has been fully processed and the funds are available with finality. A pending payment is one that has been initiated or is in process but has not yet fully transferred. Pending payments show up in your bank's online account with a note like 'pending deposit' or 'hold.' Cleared payments are available for withdrawal and are reflected in your available balance. The practical difference: a pending ACH deposit of $3,000 is not available to pay your rent until it clears. For accounting purposes, record revenue when the payment clears -- not when it is pending. If a payment reverses after you record it as cleared (for example, a returned check), you will need to reverse the accounting entry and reinstate the invoice as outstanding.

To verify and record a cleared payment: First, check your bank's online platform for the payment status -- look for 'available' or 'posted' rather than 'pending' or 'hold.' Second, match the payment amount to the corresponding invoice in your accounting system. Third, note the clearing date -- this is the date the payment should be recorded for accounting purposes. Fourth, mark the invoice as paid in your invoicing system and record the payment in your books. Fifth, reconcile your bank account monthly to confirm that every payment recorded in your accounting system corresponds to an actual cleared deposit. Sixth, if a payment reverses or bounces, immediately reinstate the invoice as outstanding, notify the client, and assess any applicable NSF or returned payment fees as specified in your contract.

Eonebill tracks the payment status of every invoice -- from sent to viewed to paid -- so you can update your records accurately when payments clear. Our [free invoice generator](/free-tools/invoice-generator) creates professional invoices that clients can pay online, and our payment tracking gives you real-time visibility into your receivables. Explore [Eonebill pricing](/pricing) for full payment management features.

1. Marking an invoice as paid when payment is promised or sent -- record payment only when funds have cleared your account, not when the client says they sent a check. 2. Spending pending funds before they clear -- pending payments can still be reversed; spending ahead of clearing creates overdraft risk. 3. Not reconciling your bank account monthly -- regular reconciliation catches discrepancies between recorded payments and actual cleared deposits. 4. Failing to track clearing dates -- the date a payment clears is the accounting date; using the invoice date or the check date instead can distort your financial records. 5. Not having a returned payment policy in your contract -- specify in writing that returned checks or reversed ACH transfers will be subject to a fee and that the original invoice remains due.

Learn more about related topics: [Invoiced](/glossary/invoiced), [Credit Card Processing Fee](/glossary/credit-card-processing-fee), [Non-Sufficient Funds](/glossary/non-sufficient-funds), [Accounts Payable Aging](/glossary/accounts-payable-aging).