Best practice for allocation of savings accounts



Currently I’m helping a Business owner who need my help handling her accounts and administration activity.

She has particular way like book keeping style of handling her money, something similar to multiple piggy banks.

Every 1 $ of Sales:

  1. 55% will be use for Operating Expenditure
  2. 10% is For Investment or Purchasing Long term Assets
    3.10% For education or training expenditure
  3. 10% For Settling Debts (old or acquaintance) which can be off the books
  4. 5% For donations
  5. 10% for Holiday or Vacation for staff (Annual Expenditure)

She does Antenatal Service by Webinar.

Every Webinar Session Finishes I allocated the sales from the Webinar Session to said Savings account. in Bank Account tab. Which I have to use Inter account transfer.

Per month there will be 2 Webinar of different dates. Meaning I will allocated 2 times a month.

Her business is Cash Business no sales credit, expected Sales invoice is lesser being use.


Right now I have difficulty to use Inter account transfer for 1 to 1 only,

The other alternative would be using Journal Entries which I try not to use it.

Can Inter account transfer allows, many to one and one to many? By means of additional feature.

Proposal For Special Sub-accounts

Question - does actual money get transferred to each piggy bank or is there just one pot of money but is represented / proportioned to the various piggy banks ?


Inter account transfers can only be from and to individual accounts.



  1. The owner planned to create second account for the same bank.
  2. Main account will be used for operation purposes, the second is a saving account.
  3. For now there is no ‘actual’ transfer to any other bank accounts. Just within books, I tagged with Bank abbreviation to know whether the money is still in the Main account. “Represented”

So I have to use Special accounts and spend it from main bank account?

Update: For now what I did, I created in books (Bank account tab) , second account for operation expenditure (55%)besides actual bank account.

the rest will be created under special accounts since the owner would rarely or will not spend until there is the need.

In the end I have to use Journal Entry to ‘spend’ from Special accounts.


The problem faced here is that the percentage allocations are representations not actualities. EG: a sales invoice is issued for 1000 and subsequently the 1000 is received into the active bank account and then needs to be re-distributed based on the percentage formula without any actual funds leaving the bank account, in addition, any expenditure needs to be “spent” from its allocation which is still part of the main bank account - all to messy & clumsy.

Therefore, based on the statement “Every 1 $ of Sales”, the focus (the process) should be based on SALES and not money, which will still achieve the same allocation representations without any piggy bank complications. So to do this simply, we just need to design an appropriate section in the P&L Chart of Accounts, create the Special Accounts and the real big plus - that the bank account can be left alone as it will require no fancy footwork of any fashion.

1 - The chart of accounts would look like this:

At the end of the first month you would create a Distribution Journal Entry based on the 1000 Sales:

At the end of each subsequent month you would edit the Journal, change the date and the distribution values.
At the commencement of a new financial year you would start a new Journal Entry.

3 - The Balance Sheet & Profit & Loss would look like this:

Note how the Operating Expenses allocation of 55% is represented by the sub-total

4 - The BS account Distribution Provisions has the individual balances via the Special Accounts:

5 - If a Saving Account is opened then its just a matter of transferring funds to match the provisions:
0000000 Bug 3

6 - Lastly, if any allocation does have funds spent then it just a Spend Money against the provision
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The above is the expanded (full disclosure), but for neatness you can condense.

The Chart of Accounts becomes
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So the Journal only has to be
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Every thing else remains the same.


ah! So I’m not done it right, I’m under impression that the Money from Sales I distribute would be in this case ‘Distribution Provisions’ categorize as Asset Then When ever expenditure being paid I credited from Distribution Provisions (Asset) and Debit into Defined Expenses as per provisions indicates.

What I did, to transfer from ‘Main Account’ from Bank Account Tab, I use ‘spend’ function as if I’m pay (transfer) to Special Accounts (distribution provisions) [Asset] Like transferring.

I did this under pretext, ‘How much money is available for us to use for the due payment or planned trip?’

I recognize expenses after being paid, if not or plan not to paid, I immediately transfer to Liability account as accrued expenses.

In other words, I’m not using accrual method :sweat:

Noted that the company just incorporated by august 2017, The expenses is being paid by the director’s personal money, I had to place it in expense claim.


The thing is, your criteria was that the Sales were to be proportioned by these %'s, not that the money received from the sales were to be reserved by the %'s.

Also, while your Spend Money lowered the books bank balance by reallocating to the Special Accounts it didn’t lower the actual at Bank balance, so any reconciliation would have been impossible.


yup, my bad. I have to re-do it again. If I were to Reconcile that would mean manual and tedious.

I learned something again that university didn’t taught me. in accounting :sweat_smile:

Thank you @brucanna!