I have imported the bank statement and I am allocating the transactions to the right expense account but I have come across payments out of the bank account to the credit card how do I allocate them?
It is easiest to handle these as transfers between bank accounts. I would not use the import feature for this at all, as it will involve more steps.
But when I use the transfer payments from the bank account. how does that categorized payment from my uncategorized payments list.
Not exactly sure I understand your question, so re-ask it if I’ve misunderstood you.
First, understand that all three columns shown under a bank account are part of the same account. Statement balance lists items that have hit the statement. The uncleared deposits and payments have not. When you recategorized an uncleared transaction as a cleared transaction, you’re just modifying part of its description. You are not entering a new transaction, so there is no involvement with income or expense accounts. You don’t have to edit anything in that respect.
Second, when you transfer money between a regular bank account and a credit card account, you’re just moving money from one pocket to another. Although you may write a check (or cheque, depending on where you are) to accomplish this, there is no impact on profitability or financial position. In other words, there is no change to your P&L or balance sheet. Any changes like that occurred when you made the transaction using the credit card with a merchant. Because you are now treating the credit card like a bank account, it’s just another pocket. In accrual accounting, the expense was recognized when you completed that transaction, even though you didn’t actually pay the credit card statement yet. That’s because you owe the money, so it isn’t technically available any longer for some other purpose.
I have gone into the bank accounts tab and clicked on the statement balance in the bank account. I am now categorizing the payments from that account so am allocating them to my expenses accounts.
How do allocate a payment to the credit card.
I think I have sorted it, it automatically allocates it to suspense if I leave it there and then do the same with the received in the credit card they should contra each other out
I still don’t understand what you are doing.
The transactions recording expenditures for various expenses should have been allocated to appropriate expense accounts when first entered, no matter whether you paid cash, wrote checks, or charged them to a credit card.
In accounting terms, the debit side of the transaction would have been to an expense account, such as rent, supplies, or utilities. The offsetting credit required by double-entry accounting would have been to cash, the bank account, or the credit card. Remember that credits decrease asset accounts like cash or a bank balance, but they increase liability accounts. Since you were originally recording credit card transactions in a liability account, the balance of that account would have grown with every charge. Now that you’ve switched your credit card to being a bank account, it has become an asset account, becoming more negative with each charge.
Under your previous setup, paying your credit card statement involved debiting the credit card liability account and crediting your bank account, moving it back toward zero. Under your new setup, you debit the credit card bank (asset) account via the transfer and credit the bank account. Both ways, your bank account is credited by the transfer and the credit card is debited, regardless of whether it is an asset or liability account.
Nothing should ever be going to Suspense, because that means you have entered unbalanced transactions. Your idea of letting offsetting entries zero out the Suspense balance is not a good one because, while the net result might be correct, you have only arrived there through two incorrect entries. In this case, two wrongs do not make a right.
As I look back over your various postings, they suggest that perhaps when you first entered credit card transactions, you did not allocate them to appropriate expense accounts. And you seem to have treated credit card statement payments as if they were, themselves, the expenses. They were not; they were always just transfers from one pocket to another, even though you could not originally record them as money transfers because your credit card account was a liability account.
I hope this makes sense. I fear that you have dug yourself a into hole. The good news is that on the transfer side, it is only 12 transactions deep. The bad news would be if there are many credit card charges to sort out. And it just hit me: maybe you weren’t recording those credit card charges at all as they happened, but only recording your payment of the statement? That would explain why you are trying to import those charges and categorize them to expense accounts.
If this last idea is true, I strongly urge caution. Other users have reported many peculiarities resulting from imported bank statements, not because Manager does things wrong, but because of different ways banks export their statements. You should be absolutely certain you understand the accounting flow of debits and credits in this process by doing things manually before introducing the complexities of automatic importing.
I do understand the flow of debits and credits and yes your last assumption is correct as I do accounts for other people for their GST and Tax returns I work off their bank statements. They give me their company back statements via email when it is Tax time 12 months worth or gst 6monthly or 2 monthly and I do what I need to do to get them into Manager I check them and then allocate them to the expenses account.To start off I did it all by journal then you convinced me to use the sales and purchases then you convinced me to down load the statements which I am doing.That is where the confusion comes in because I have only ever done it thru journals.I only have a few clients and work from home and I love manager it does everything I need so far I would love to be able to scan and up load invoices etc so it can go to assets etc but I can wait.I would also love to be able to put a button or something with the clients folder path in and go directly to it from manager but others have more urgent needs than me.
I import bank statements and allocate the credit card payment to an Equity account I’ve set up called Inter-account transfers. I have set up bank rules so these payments are automatically categorised to this account. The payments will contra each other out.
Well, @Wornout, please accept a sincere apology. I surmised you were talking about record keeping for your own company, as you did not make it clear you were trying to reconstruct proper accounts from others’ (possibly) incomplete information. While everything I said was true, I see now that it probably doesn’t address your real, underlying need.
So it turns out you are out of my comfort zone for advice. Maybe @sparky is on the right track.
Hi Tut that ok yes sparky is right except I put it all to suspense and it contra’s it out . I have done that for years with other systems but thought seems manager is so good it might have another way.
Sparky do you do your own or others? I feel like sometimes I am the only one using manager for others but in saying that I have set up a few of my clients with manager and now a couple of them are thinking about going cloud with it.As they can do quotes and invoices on site.
Just realized that yes sparky I will make up an account to contra to as the bank statements still show up as uncatalogued if I have an account then it will stop that
Hi Wornout, I do the accounts for one company. When importing transactions from bank accounts and credit card accounts the Inter-account transfers account for payments between these accounts works well especially when combined with bank rules. Set and forget.