How to Record Transfer in QuickBooks Desktop and Online?

In this post, you’ll learn how to record bank transfers and classify transactions between accounts in bold QuickBooks Online and QuickBooks Desktop. Regularly recording bank transfers helps to keep up-to-date financial records and guarantees that all of your company’s transactions are appropriately recorded.

In this article, we will talk in detail about:

• How to Classify Transfers.
• How to make New Categories.
• How to Classify Transfers Between Bank Accounts.

By the time you finish reading this article, you’ll know exactly how to do these important tasks in QuickBooks Desktop and QuickBooks Online, giving you the ability to accurately and conveniently handle your financial transactions. Now let’s get into the specifics and learn how to record and organize bank transactions in QuickBooks.

Let us begin by understanding the meaning of the transfer of funds.

What is a Transfer of Funds?

Many business owners use bank transfers to transfer money between accounts, pay taxes, or pay suppliers since they are a convenient and speedy method of sending and receiving money. Additionally, banks provide a record of transactions, allowing business owners to check which payments were made at what period or even fix payments automatically.

After transferring funds from one account to a different bank account, it may become easy to prepare a record for improved financial management. QuickBooks allows you to record the Transfer along with the related details like memos and dates.

When do you Need to Transfer Funds Between Bank Accounts?

Here is the list of the scenarios when you need to transfer funds between bank accounts:

1. Expense Categories

Often you may require to transfer funds to meet certain expenses. For instance, if you have a marketing budget, you can transfer funds to the marketing account from your operating account to meet the promotional expenses.

2. Additional Funds

In case your business has additional cash in its checking account, you need to transfer some of the amount to an investment or savings account to invest in assets or earn interest.

3. Vendor Payments

In case you handle vendor payments from a different account, transfer funds to your vendor account from your primary account to meet expenses and uphold a good bond with the suppliers.

4. Loan Payments

Transferring funds becomes important when you are required to make loan payments. Schedule such transfers as per your loan agreement to prevent any kind of penalty or late fee.

5. Reconciliation

Regularly reconcile your particular bank accounts in QuickBooks Online to make sure that your records are proper and precise. If you uncover certain irregularities, transferring the money between accounts can assist in fixing these issues.

6. Tax Payments

If you kept a certain amount for taxes in a particular account, transferring funds to such an account is required to make sure you have adequate funds to fulfill your tax obligations.

7. Payroll and Salary

Transferring funds can also be helpful while handling payroll expenses and paying salaries. Make sure that your payroll account has the required funds to meet the employee benefits and salaries.

How to Record Transfer Funds between Accounts?

When you transfer money from one account to a different account, you need to record such a move as a transfer in QuickBooks. To maintain proper records in the books, you need to enter the transfer as a single transaction that impacts both the respective accounts.

It is possible to transfer funds between two accounts with any of the methods given below:

• Record a transfer by check
• Record a new transfer
• Match imported bank transactions, if you are linked with Online Banking

How to Record a Transfer by Check in QuickBooks?

If you are required to check the transfer of funds physically, you must record the check number and the number.

• Choose + New.
• Choose Verify.
• Now you need to enter the check details, including the check number.
• Choose the account that the funds are coming from by selecting it from the Bank Account field.
• Choose the account that the funds are going into from the Category column.
• To record the check, choose either Save and Close or Save and New.

How to Record a New Transfer in QuickBooks?

In case the transaction has not been imported from your particular bank, yet, here are the steps to record a money transfer into QuickBooks directly:

• Choose + New.
• Choose the Transfer button.
• Using the Transfer Funds dropdown list, choose the bank account that the funds are coming from.
• Choose the bank account to receive the funds, from the Transfer Funds To dropdown list.
• Enter the amount being transferred in the Transfer Amount area.
• Change the date in the field.
• In the Memo field, provide a description of the transfer (optional).
• To finish the transfer, choose Save and Close.
• Choose Sure, after you have verified the date twice.

It is possible to record the transfer by reviewing every account registered in the chart of accounts.

How to Match a Transfer in your Imported Bank Transactions?

After transactions from both accounts are downloaded, it is possible to classify and match the transfer. Firstly, you need to record the transaction as a transfer from one account:

• From the Bookmarks menu, choose Bank transactions.

Note: As an additional option, you can choose Bank transactions from the Transactions tab in the Menu dropdown.

• Choose the bank account that is providing you with the money.
• Locate the transaction and click it to open it.
• Choose to record as Transfer.
• Next, choose the account to which you sent the funds from the Transferred to dropdown.
• Choose Record Transfer.

Now you need to match the transaction from the different account:

• Choose the bank account where the funds are sent.
• Choose the For Review tab. Now choose the Recognized filter from the particular dropdown.
• Locate the transactions.
• From the Action column, choose Match to match the transaction for both accounts.

How to Record a Wire Transfer in QuickBooks Online?

Based on the reason, a wire transfer is recorded. It is possible to record it as an expenditure with the help of the Cash Expenses feature or as a deposit with the Bank Deposit feature.

Record a Wire Transfer as an Expenditure

In case the money will be moved out of your account, follow the steps given below:

• Choose + New.
• In the Suppliers option, choose Expenses.
• In the Payee field, mention a supplier or the place of purchase.
• In the dropdown list in the Payment Account field the bank account from where the wire was transferred.
• Add the Purchase date in the particular Payment Date field.
• Choose the Payment Method from the particular dropdown list.
• Enter WT or Wire Trans in the Ref No. field.
• In the Category Details section, add the expense details. In the Category dropdown, choose the expense account you access to enter Accounts Payable or monitor expense transactions.
• Type in the purchase amount.
• Choose Save and New or Save and Close.

Record a Wire Transfer as a Deposit

In case is to be transferred into your account, implement the steps given below:

• Choose + New.
• Under the Other option, choose Bank Deposit.
• From the Account dropdown, select the bank account the wire was transferred to.
• Add the Date the wire was entered.
• On the foremost line, mention from whom the wire was received from.
• Identify the particular Income Account concerning the transfer or add Accounts Receivable in case the transfer is planned to pay an invoice.
• Type the WT or Wire Trans under Payment Method. You can include this payment method in case it does not come up in the list.
• Mention the transferred Amount.
• Enter the expense account that keeps track of bank or wire fees on the next line, along with the total amount of the fees, shown as a (-) negative figure, if any were subtracted from the actual deposit.
• Check that the balance of the deposit is the same as the actual amount deposited to the particular account.
• Choose Save and New or Save and Close.

After Making a Transfer through QuickBooks and Connecting Banks:

• Press Transactions and then click the Banking tab on the left sidebar for online banking.
• You will witness all the transactions that have been made.
• Choose transactions and then use the Add button.
• Make sure you access the drop-down menu to choose the Match or Category to ensure that no duplicates are present. It is possible to prepare custom banking rules to do it automatically.
• Press the Add button.

How to Record a Bank Transfer in QuickBooks Desktop?

The procedure to record a bank transfer in QuickBooks Desktop includes certain specific steps to precisely document the financial transaction for reporting and reconciliation.

• First, you need to go to the Transfer Funds screen which can be used via the banking menu
• Choose the right bank account for the transfer, making sure that the funds transfer from the right source to the right destination.
• Enter the transfer amounts properly, making sure they match the bank statement records.
• You can include optional memos to add further context for the transfer.
• Save the transfer, since this step is important to maintain precise and updated financial records.

Final Words

A bank transfer is a type of payment method that enables business owners and consumers to transfer money between companies and bank accounts. It is possible to record a transfer in QuickBooks to shift around funds, pay taxes related to your business, accept payments from a client, and pay suppliers. This approach assists you to make sure all the money flows are recorded properly.

We hope that after reading this article, all your doubts concerning how to record transfers in QuickBooks have been resolved. Still, if you get confused anywhere or need professional assistance, you can reach out to our Dancing Numbers team of experts.

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Frequently Asked Questions

Q1: How many banks work with QuickBooks?

Ans: It is not possible to find it out accurately, since new banks are coming up every day. It can be said with certainty that there are lots of banks. As per Statista, there are nearly 4708 FDIC-insured banks in the U.S. that use QuickBooks.

Q2: What category is a transfer in QuickBooks?

Ans: For transfers, there are three categories:

• Owner’s withdrawal
• Owner’s Deposit
• Credit Card payment