Difference between recording transaction as transfer or using categorize method.

Hey there, CHMM.

Thanks for dropping by the Community, I'm more than happy to shed some light on this for you. There's a few main differences between recording PayPal bank transactions as transfers and Categorizing the them. For one, QuickBooks sees that transfer the same as it does  income. To the software, it looks like a deposit because the total cash increased. Using the categorize feature allows the system to recognize the transaction for what it truly is. For that reason, I highly recommend categorizing your transactions. You can do so using the following article which includes a step-by-step guide on the process. 

• Categorize and match online bank transactions in QuickBooks Online. 

I also recommend reaching out to a bookkeeper, they will be able to go over your books with you in a 1-on-1 individualized session to determine the ideal course of action. If you don't have a bookkeeper, you can check out our find a ProAdvisor page, just fill out the info and it will find a certified accountant who is also a QuickBooks expert in your area. 

If there's anything else you need clarification on, or need assistance with, feel free to post here any time. Thanks for stopping by and have a lovely day. 

Thank you for the reply I do categorize my transactions I am merely asking in reference to the PayPal transfers from PayPal to the bank and from the bank to PayPal not all y transactions in general.