How to Transfer from one bank to another?

Jack Hill wrote in news:countert-AA4969.11512826032009 @news.isp.giganews.com:

Are you writing a paper check on Bank A then depositing it into Bank B? Then why not do just that in Quicken? Record check #1234 payable to yourself in Back A, then record a deposit in Bank B.

If you are transferring the money electronically you should be able to create Transfer transaction on Bank A, and specify Bank B as the "transfer account"

Hi, Porter - and Jack.

No, that's what results in the double accounting.

The check from A increases the balance in B. Then the deposit to B increases its balance again (while decreasing A again, of course).

Jack must choose from two options:

1. Record the check from Bank A as a transfer to Bank B. That's all; the transfer will automatically increase the balance in B.

or:

1. Record the check from Bank A as a transfer to a Suspense Account - by whatever name. (Transfers in Transit?) Then record the deposit in Bank B as having come from that same Suspense Account. After both entries, the Suspense Account balance will be zero, A will be decreased and B will be increased - just like in The Real World.

RC

This one R.C. I really don't understand your post. If I have two accounts in banks A and B and write a check to myself out of A to put in B as a deposit (As I think Porter Smith was advising and what I would have also suggested), how does this possibly result in 'double' accounting? The writing of a check from A has nothing to do with the balance in B until I put it there as a deposit. One withdrawal, one deposit.

Now it's true we're talking Quicken here, not something like Quickbooks which I think does enforce double entry bookkeeping. And there in lies what I think might be 'problem' in my understanding what you're saying -- technically, I have no doubt you're right, but again, this is Quicken.

I do realize I am probably wrong in my naive understanding of this I am sure, so I look forward to understanding where I'm wrong. But I'm not 100% willing to buy off on complexity (a phantom account??) just to satisfy some arcane accounting law which might not have relevance to Quicken for a small business.

Hi, Andrew.

When you record the check in Bank A's Register, what do you put in "Category"? Do you leave it blank?

When you record the deposit in Bank B's Register, what do you put in "Category"? Do you leave it blank?

If you leave the "Category" blank each time, I suppose you would get the "One withdrawal, one deposit" you mention. Or if you use "Cash" each time - but that is the equivalent of my "Suspense (by whatever name)" account, isn't it?

I've never used QuickBooks, but yes, I am assuming that every check and every deposit will have a destination or source "Category".

And that's where Jack is going wrong, I think. First he shows Bank B as the destination for the money from Bank A's account. And then he shows Bank A as the source of the money deposited in Bank B - in a second entry. So the money gets added to Bank B twice: once from Bank A's check and again from Bank B's deposit - rather than once from a single "Transfer" entry.

Since checks usually are numbered and deposits usually are not, and since there can be no such deposit until the check has been written, the simplest solution is to use "Bank B" as the "Category" when entering the check into Bank A's Register. When Quicken records the entry - as a Transfer - the deposit will show up in Bank B's Register and will automatically show that it was transferred from Bank A. There will be no need to make a redundant entry for the deposit in Bank B's Register.

As a side note, when I worked for a national tire company in a small town in Oklahoma 50 years ago, we had a similar system. I made two deposit slips each day. The first included cash receipts and all local checks we received from our customers; these were deposited into our local bank. Then I wrote a check on that local bank, payable to our big-city bank, for the total of that deposit and included it, along with all the out-of-town checks we received, in a second deposit slip and mailed them all to our big-city bank. The treasurer of the big company had determined that this would cut out a day or two of processing and transfer time in clearing both the local checks and the ones that had to go through the national clearinghouse. (Of course, there was no Quicken then. :^} )

RC

Thank you Porter, RC and Andrew,

I'm working in QuickBooks not Quicken, my mistake. I tried opening a new chart of accounts, naming it, "Transfer" and making it a "Bank" account type. Maybe that's where my problem is?

I have to select an account when I write a check, easy for an expense, but when we need to transfer from the local bank to the big bank and visa versa, then I'm not sure what account or what account type is appropriate.

I can understand the "Expense" account named Transfer, and I"ll try that.

We do have an equity account where we can draw out or infuse in, but I don't think it's correct to use an equity account simply to move checking account assets from one bank to another?

QuickBooks does not seem to have a Transfer feature as Quicken does. It would be easy if it did. For whatever reason, everything I've tried results in a credit and debit in both bank checking accounts, the net result is no transfer of funds.

I'll try the "Expense" account and see if that works. Thank you everyone for your feedback, it has been very helpful. I'll get back to report my findings.

Jack

Ah, I get it. I WAS talking about the physical world, not Quicken. Yes, when I write the check from A to go to B, I sure do put B's account name as the category for the withdrawal, and then when it is actually made to B, all is well.

Peace.

Ah ha- Quickbooks! For me now, all bets are off. I have QB for a club that I am going to start using it for when the new fiscal year starts on

You don't need another account to do this in QB--just the 2 bank accounts involved in the funds transfer. When you record the transfer of funds from one bank account to another just enter the other bank account as the "expense" account in the check form or register. The other account will automatically record the transaction in that account. You end up only having to post 1 transaction this way.

If you enter a deposit as a second transaction then you will double post the funds transfer. Try and be consistant on how you record bank transfers. I usually record them on the account that is making the withdrawal using Write Checks or by entering the transaction directly in the account register like you would in Quicken.

As mentioned above, just specify the other bank account where you would normally enter an expense account.

Correct, using an equity account is not appropriate in this case.

Yes it does. It is "hiding" under the Banking Menu. Just select Banking>>Transfer Funds

Laura,

You were able to hit the nail on the head sort of speak. It worked. We were able to add "bank B" in the area reserved for expense accounts and both sides of the transaction (a transfer in this case) balanced.

We are very grateful for your expertise. We never knew how to make a transfer till now. Yippee!

Thank you very much Jack

You know a lot more QuickBooks than you realise. Once you get used to the user interface you'd find QB very similar to Q. Someone once called QuickBooks as Quicken on steriods.

Glad to help.

BTW, there is a sister newsgroup to this one called alt.comp.software.financial.quickbooks. Since you are using QuickBooks you should subscribe to that group as a good source of help. Another great source of help is this user forum: