Creation of a sub-bank account

I have been following discussions on sub-accounts and my limited financial management knowledge got me stuck. I just want a specific guidance on the following:

I am setting up an overdraft facility and I want it to appear in the Bank but not as an asset but rather a liability so that it does not affect my balance sheet by making to look as though the overdraft money is my asset rather than an available cash when needed. Please give me simple steps to follow to set this up.

Currently all cash related accounts, including overdrafts & credit cards, are grouped under the Cash Accounts tab, which means “currently” they will appear under assets.

But, there is a new feature under development called Custom Control Accounts which will allow negative balanced cash accounts to be allocated to BS Liabilities. Until then, assets they have to be.

Thanks for your prompt response.

Consider the double entry involved in overdraft.

Just create a liability account.
Receive money for every overdraft amount enjoyed from the liability account.
You can then enter spend money transactions in the bank account.
When paying off the liability, spend money to discharge the liability amount from the liability account.

This is because overdraft is a short term loan, and loans are entered under liabilities and the cash sent into the bank account under asset.

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Many overdrafts are just bank accounts - you make daily deposits and drawing of cheques.
The overdraft can be attached to the bank account - this week in surplus, next week overdrawn.

However, if you have a draw down facility (not day to day banking) where you transfer funds back & forth to the operating bank account, then it would be set up as a BS Liabilities Loan account.

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