Added ability to merge receipts and payments into inter account transfers

The latest version (24.4.30) adds ability to merge receipts and payments into inter account transfers.

This is useful feature when importing your bank transactions (which is most businesses). It allows to categorize your receipts and payments as “Inter Account Transfers” which can be automatically merged into inter account transfers.

How it Works

Let’s say we have the following bank and cash accounts:

When categorizing your payments and receipts which represent transfers between your bank or cash accounts, use the new Inter Account Transfers account, then select the bank or cash account the transfer is related to.

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For example, when paying off Credit card from Business Operations Account, after we import bank statements for both Credit card and the Business Operations Account account, we categorize payment from Business Operations Account as:

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And received money in Credit card account as:

Tip: You can set up bank rules so your the transfers between your bank and cash accounts are automatically categorized like this

Both receipt and payment will debit/credit Inter Account Transfers account on balance sheet but because we are also specifying bank or cash accounts the transfer relates to, Manager will automatically create sub-accounts for each pair. This way even if you have many transfers between many bank accounts, Manager will create inter account transfer ledger for each pair.

When you click on Inter Account Transfer account on balance sheet, you will see:

The balance for Business Operations Account / Credit card is zero. This is good. It means equal amount of money that has left one bank account has arrived in another bank account. When you click the balance, you will see list of your inter account transfers for the given pair.

Obviously, in real business, there will be more transfers between variety of accounts, Manager will create sub-account for each pair.

The advantage of this approach is that if you had one big clearing account for inter-account transfers, it was difficult to navigate because it would contain all transactions between all accounts lumped together. If your balances didn’t add up to zero, it was difficult to find which account has caused the issue. By splitting the transactions by account pairs, it’s much easier to resolve bookkeeping errors.

Using Inter Account Transfers

If you are using Inter Account Transfers tab, you can take things further by merging related payments and receipts into single inter account transfer transaction.

Go to Inter Account Transfers tab and if there are any receipts and payments that can be merged, you will see yellow notice:

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Click on it and you will see the screen with payments and receipts that can be merged. In our example, we have only one payment/receipt pair:

To merge the payment and receipt, check the box and then click New Inter Account Transfer button. It will delete the payment and receipt and create equivalent inter account transfer.

Notice how the transfer was made on 29th April but it arrived to Credit Card account a day later. Inter account transfer will take that into an account by setting Cleared date for credit card on a later date. This makes sure that bank reconciliation won’t be affected and future bank imports will still see this inter-account transfer on correct dates for both accounts so duplicate transactions are not re-imported.

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I probably won’t be popular with the following comments but I think the question needs to be asked.

Is there any need for Inter Account Transfers anymore?

I would image that there has been a good deal of coding gone into setting up this new functionality but this has been achievable forever by setting up a “Funds Clearing” account in the Balance Sheet and directing each side of the transaction to this funds clearing account.

And now that Journal Entries have recently been opened up to Bank and Cash accounts - for someone who is not using Bank Import but entering these double sided bank transfers manually a Journal Entry (with the added ability to include a line description) can be now used instead of using Inter Account Transfer.

So a well written instruction guide would have achieved the same outcome and the Inter Account Transfers tab could be eliminated.

All transactions can be carried out in a journal entry, because all transactions are essentially journal entries. However, grouping transaction types is still very necessary to make it easier for users to manage data.

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As it should be, although it was not possible to use General Journal in Manager.io for all transactions until a few weeks ago.

Accounting methods use subsidiary journals for different transactions, e.g. cash receipts journal, cash payments journal, creditors journal and debtors journal. You are correct, all these could use general journal instead.

Inter account transfer was necessary prior to journal entries in Manager.io being opened up to all GL accounts a few weeks ago.
Inter account transfer is essentially a general journal (special type for computer systems usually) and it possibly assists users who do not have strong accounting skills to get it correct. So is possibly a good reason to keep it (I am not convinced of this though)

Comment about the new functionality still stands though.

Journal entries do not support ability to set “clear date”. Let’s assume the support can be added for the argument sake so journal entries can completely replace inter account transfers.

What happens next? Almost every transaction could be turned into a journal entry. Just because transaction can be rewritten as a journal entry doesn’t mean it should be.

Here is why:

Journal entry can do anything. You just don’t know until you look at it in detail what it’s really doing. And you should have as few of these “anything is possible” transactions in your accounting system as possible.

When you look at inter account transfers, you know these transactions can only debit/credit bank/cash accounts. That’s it. No side effects.

When you look at depreciation entries, you know these transactions can only debit/credit fixed asset depreciation acocunts. No side effects.

When you look at investment revaluation entries, you know these transactions can only debit/credit investment accounts. No side effects.

So we need those “constrained” tabs for simple and straightforward transactions to be tucked neatly in these buckets.

Then the bucket - let’s call it journal entries bucket is reserved only for those transactions that do not fit anywhere. And hopefully you don’t have too many of those.

Another benefit of creating separate tabs (or buckets) for these contrained transactions is that since we know the nature of these transactions, we can present them in more approachable way. Inter Account Transfers tab has different columns than Investment Revaluations tab. We can give them specific View, we can make them easier to enter (because they are constrained - inter account transfer edit form has less fields than journal entry). We can create custom fields just for that type of transaction. Creating advanced queries is also easier.

The way I see journal entries is that it’s a repository for transactions for which I haven’t created a specialized bucket yet (tab).

But I’m not forcing anyone to use these buckets. You can always disable any tab you want and do it using journal entries if that’s what you want to do.

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Another advantage is the capability to assign roles for users.

For instance, you could establish four cash accounts and one bank account for a business operation, project, or retail store. Each cashier would be assigned to a cash account, while the operations or retail store manager would have access to all four cash accounts and the bank account. Periodically, the store manager would need to consolidate sales cash into the bank account. Using the inter-account transfer feature of the bank account would be ideal, as it facilitates the transfer operation while limiting the store manager’s access solely to fund transfers. Granting access to the Journal Entries tab would provide access to all general ledger accounts, which is not desirable.

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Problem - using depreciation entries it is not possible to allocate depreciation expense to a project. Prior to the opening up of Journal Entries it forced user to use Depreciation entries as Accum. Depreciation was not available in journals. Then an allocating GJ had to be entered to allocate to project. Now that journal entries have been opened up it is easier just to use a Journal rather than Depreciation Entries. So now for me Depreciation Entries is obsolete.

This causes difficulties in Custom Reports and Advanced Queries when we want to create reports using multiple transaction types.

I am not against having subsidiary journal profiles but once entered they should be stored in GJ format so that there is ease of access for reporting across all transaction types.

I have trialed a lot of features in Manager.io and ended up discontinuing to use most of them because of restrictions encountered, some features not functioning desirably (e.g. Investments) and difficulties with Custom Fields and Custom Reporting.

I have patiently waited for promised improvements to nearly all of these features and they do not eventuate, and now we see time spent unnecessarily on this new functionality for Inter Account Transfers when use of simple clearing account is already adequate.

The direction you take the development of this software is entirely up to you, but I have already trialed other offerings which look promising and I am at the point of discontinuing with the use of Manager.io. It will be a difficult decision as many aspects of the program are excellent.

I do not know how common it is but my bank is reporting the withdrawal a day (up to 3 days if over a weekend) after the receiving bank is reporting receipt of the transfer.

As a result Manager is not able to find the transactions to merge.

(changing one of the transaction dates fixes it but then Managers records no longer match the bank import)

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Are these things already posted in ideas category or these are entirely new issues that haven’t been raised before? If they are in ideas category, they are on my radar.

I’m working on this area too. There is already Transactions button on Summary screen which allows you to do advanced queries across all general ledger transactions. There is more work to do to make advanced queries extensive to match custom reports. I’m working on it. Lots of topics in ideas category are depending on this work.

That’s correct, at this time Manager will not match earlier receipt to later payment. But I think it could if it doesn’t find forward match, it could look backwards.

Or it should look for the match with the least amount of days between. That would be perhaps the most appropriate.

You can change transaction date, but then you need to set the Clear Date to when the transaction actually cleared on bank statement so subsequent bank imports won’t import duplicate.

I think that would be too much fiddling around, it’s better to improve the matching instead.

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That sounds sensible to me as the problem I encountered was differences in reporting policies between banks. For which the closest matched dates of the correct amount is very likely to be the actually matching transaction.

Other may have different experiences. Other options could be considered such as user selection if more than one match is possible but recommending more elaborate functionality only makes sense if a simple solution does not actually work.

Edit
If required, rather than adding direct user matching support it would probably be better to use:-
If closest date match for the transfer amount is not the correct match

  • User can temporally remove the offending transaction (link it to a different account), match other transactions, then re-link the transaction to “Inter account transfer” and then match it
  • if closest date match is often not correct, it maybe better to support entering a “Usual account clearance time” in positive or negative days. Then Manager could match closest to that date.

Dear @lubos

Since Inter Account Transfer added to importing bank SOA

can you please consider adding Inter Account Transfer to Bank Reconciliation tab next to payment receipt?

This feature added to ease the working when bank SOA imported for the same, we should have it if possible, under bank reconciliation to reduce navigating between tabs (bank reconciliation and inter account transfer) to one click same as new receipt new payment.

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That can be done already by entering the payment / receipt and select the “Inter account transfer” account

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The reason there is no inter account transfer button on that screen is to make sure when you are reconciling one bank account, you are not going to cause side effects and unrencile another bank account by entering inter account transfer.

You should simply categorize receipt or payment which represent inter account transfer to the new Inter Account Transfers account as @Patch has already suggested.

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