Whether you’re moving money between checking and savings accounts, making loan payments, or reconciling transactions, QuickBooks Online allows you to effectively transfer funds between bank accounts. In this article, we’ll show how to record the transfer and then review the transfer in the bank account register.
Understanding Fund Transfer in QuickBooks Online
In QuickBooks Online, fund transfer refers to the process of moving money between different bank or financial accounts that you have set up within the software. Fund transfers are a common financial transaction that businesses and individuals perform to manage their finances effectively. QuickBooks provides a straightforward and organized way to record these transfers, ensuring accurate financial records.
Transferring Funds Between Bank Accounts in QuickBooks Online
Step 1: Navigate to the Transfer screen. Click on +New in your QuickBooks Online dashboard and then select Transfer under the Other column.
Step 2: Complete the Transfer screen. Provide the required details in the Transfer screen, including the originating and destination funds and the transfer amount. You can also add a memo to describe the purpose of the transfer for your reference. This step is optional but can be helpful for keeping track of your transactions.
Fund transfer screen in QuickBooks
Step 3: Review and confirm. Double-check all the details you’ve entered to ensure accuracy. Once you are satisfied, click the Save and Close button to confirm the transfer. QuickBooks Online will record the transaction accordingly.
Step 4: Review the check register. Navigate to the Chart of Accounts and locate the account where the funds were deposited or the account where the funds come from. Double-check whether the fund was successfully entered in QuickBooks. In the image below, the $800 we transferred to the Bank of America Checking account was successfully recorded.
Reviewing the check register to confirm fund transfer in QuickBooks
When to Transfer Funds Between Bank Accounts
- Loan Payments: Transferring funds becomes necessary when you need to make loan payments. Schedule these transfers according to your loan agreement to avoid late fees or penalties.
- Excess Funds: If your business has surplus cash in its checking account, consider transferring some of it to a savings or investment account to earn interest or invest in assets.
- Reconciliation: Regularly reconcile your bank accounts in QuickBooks Online to ensure that your records are accurate. If you discover discrepancies, transferring funds between accounts can help rectify these errors.
- Expense Categories: Sometimes, you might need to transfer funds to cover specific expenses. For example, if you have a separate marketing budget, you can transfer funds from your operating account to the marketing account to cover promotional expenses.
- Tax Payments: If you set aside money for taxes in a dedicated account, transfer funds to this account as needed to ensure you have sufficient funds to meet your tax obligations.
- Vendor Payments: If you manage vendor payments from a separate account, transfer funds from your primary operating account to the vendor account to cover expenses and maintain good relationships with suppliers.
- Salary and Payroll: Transferring funds can also be useful when paying salaries and managing payroll expenses. Ensure that your payroll account is adequately funded to cover employee salaries and benefits.
By following this step-by-step guide, you can confidently perform fund transfers within QuickBooks Online while maintaining accurate financial records. However, always remember that the timing of fund transfers is crucial, and you should only transfer funds when necessary to meet specific financial goals or obligations.