Using journal entries for bank transfers

Welcome, @SE_Accounting47.

It's always great to have someone new in the Community. I can provide you with some information about creating a journal entry for a bank transfer.

You can create a Journal Entry within two Chart of Accounts inside of one QuickBooks, but you're not able to within two QuickBooks companies. Your accountant will know the best way to make journal entries or bank transfers for your unique business. If you currently don't have an accountant, I suggest looking into our QuickBooks Live opportunity.

This is a link that can give you some information on Journal Entries.

Please know I’m only a post away if you need me.

I use journal entries for moving expenses and income between subaccounts of savings and from checking to and from savings depending on the transactions during any given month after I reconcile the bank accounts.  I determine the aggregate amount to make the actual transfers at the bank.  I cannot seem to add the journal entry as a matched transaction to the transfer to reconcile it.  How should I handle this?

Hi there, @office1011.

Let me help you add the journal entry, so you can match the transfer and reconcile it. 

Before proceeding, here are a few reasons the match may not have been recognized:

• The JE was recorded in a different bank account.
• The JE has been reconciled. 
• The JE has been previously matched to another bank downloaded transaction.

You may want to double-check again the date, amount, category, and check numbers of the entries are aligned. This is to make sure those checks will match.

Once checked, you can now match the transactions again. Let me show you how: 

1. Go to the Banking page.
2. In the For review, tab, find the Transfer record. 
3. QuickBooks will automatically find the match for the record. Simply select it, then click on Match. 
4. If not, select it then tick the Find match button.

For more in-depth information about finding a match in QuickBooks, refer to these articles: 

• Tips for Working in QuickBooks Online’s Bank Feed: Matching Transactions
• What to do if QuickBooks matches the wrong transaction.

However, if you have multiple bank feed transactions but a single journal entry, then you'll want to skip the matching part. Instead, exclude those transactions and manually clear the journal entries in the register. 

To exclude the transactions: 

1. Go to the Banking page again, then click the For Review tab. 
2. Find the bank feed transaction and check it. 
3. Click the Exclude button.

 Do all the steps until all of the transactions and records are accounted for in all bank accounts. 

Once everything is recorded, you can now reconcile the transactions. Check out this guide on how to do it in QuickBooks Online: 

• Reconcile an account in QuickBooks Online
• Fix issues the first time you reconcile an account in QuickBooks Online

 Also, browse our articles if you need help navigating around the program or if you're simply looking for a guide: QuickBooks Online general support page. 

Please get in touch with me if you have further questions. I’m always available for all of your QuickBooks needs. Cheers to a safe and productive day!

What is the process if the accounts are already reconciled?

Does it make sense to instead post each line item as a transfer instead of a journal entry?

I have a few information to share with you, @office1011.

Any related to journal entries, we would recommend consulting an accountant for depth information. This is to make sure books are accurate.

If you don't have an accountant, I can guide you in finding one. Just follow the outlined instructions below:

1. Visit the ProAdvisor site.
2. Enter your city or ZIP code in the Location field. It will display a list of accountants or bookkeepers near you.
3. You can also filter the service provided, industry served, and product supported to narrow down the results.
   

If you need tips and resources to manage your QuickBooks Online account and your finances, feel free to visit our Support page. This gives you information to handle your business efficiently and improve your navigational experience.

Get back in this thread if there's anything you need assistance with. We’re more than happy to help. Have a good day!

In order to accommodate transfers between my various companies I set up contra accounts to allow reconciliation, i.e. in the Farm Company books: 

      Date       Account               Memo                                                               Debit           Credit

07/15/2023  Checking      Record transfer in from Properties Company         1000.00         0.00

07/15/2023  External        Record transfer out of Properties Company                 0.00    1000.00

Then in the Properties Company books:

07/15/2023  Checking      Record transfer out to Farm Company                        0.00     1000.00

07/15/2023  External        Record transfer in to Farm Company                    1000.00          0.00

"Checking" is, of course, an Asset account.  What type of account is "External"?  If I classify it as an Asset, the balance sheet is incorrect for both companies.  It's not income, expense, liability or equity.  How do you recommend handling this?

Thank you

After digging out my old accounting textbooks, possible journal entries to transfer $1000 from Company A  to  Company B could be:

Company A buying something from B   

    Company B books                                          Debit             Credit

                Company B checking                         $1000                0.00

                Company B Income                                0.0             $1000

   Company A books                                           Debit             Credit

                Company A checking                             0.0             $1000               

                Company A Expense, Inventory, or Capital Asset

                                                                         $1000                  0.0  

Loan from A to B   

    Company B books                                          Debit             Credit

                Company B checking                         $1000                0.00

                Company B Liability                                0.0             $1000

   Company A books                                           Debit             Credit

                Company A checking                             0.0             $1000               

                Company A Notes Held Asset          $1000                  0.0

Equity Transfer

    Company B books                                          Debit             Credit

                Company B checking                        $1000                0.0

                Company B Contributed capital             0.0            $1000   (an Equity account)

   Company A books                                           Debit             Credit

                Company A checking                             0.0             $1000               

                Company A Equity Draw                   $1000                  0.0