Hi,
I have two bank accounts. Let us name my first bank account as “A” and second bank account as “B” for easy understanding of my example. In this example, I have earned Rs. 100.00 and deposited in Bank A.
After uploading statement for Bank A, following situation arises.
Bank A - Rs. 100.00 (Summary Income = Rs. 100.00)
Bank A - Rs. 100.00 withdrawn in cash (Summary Expense = Rs. 100.00) (Net profit = Rs. 00.00)
Statement uploaded for Bank B;
Bank B - Rs. 100.00 cash deposited (Summary Income = Rs. 200.00)
Cash & Equivalents - Rs. 100.00
But, my actual income is Rs. 100.00 only. So my query is, to over come this problem of double income, can is create a new total separately which would not reflect in income. We can name the new total as “Internal Transfers” for example. It would be easy for bifurcation for money transferred within accounts.
You have not given enough information to fully understand your situation. You said the deposit to Bank A was Rs. 100 you earned. That accounts for Rs. 100 of Income. You have not said where the Rs. 100 deposited to Bank B came from, but you obviously posted it to Income. If it wasn’t income, you should not have categorized it as such.
You said you withdrew Rs. 100 from Bank A and apparently left the deposit in Bank B. So Cash & cash equivalents should be Rs. 100, just as you report.
If the deposit to Bank B was the money withdrawn from Bank A, you should have used a Transfer money transaction. This would have had no effect on Income.
If you are going to be importing Bank Statements and those statements include amounts being transferred between bank accounts then those transactions need to be posted via a Transaction Clearing if using Bank Rules.
Extract from another topic
If you want to use the Bank Statement import then you need to process the Bank Rule via a clearing account…
Bank Transfers are two separate accountings transactions not a single transaction.
Bank A Spend Money - Credit Bank A and Debit ???
Bank B Receive Money - Debit Bank B and Credit ???
The Bank Transfer feature in Manager allows you to truncate that to a single entry - Credit Bank Debit Bank
However, when importing bank statements and using Bank Rules, the processing of two transactions is still required because (rightfully) Manager’s Bank Rules prevents any allocation directly to other Bank accounts otherwise you would have duplicate transactions as demonstrated below.
If you substituted the ??? for the opposing Bank account you would now have:
Bank A Spend Money - Credit Bank A and Debit Bank B
Bank B Receive Money - Debit Bank B and Credit Bank A
The Bank A now has two credit entries and Bank B now has two debit entries - hence the duplication. So to use Import Bank Statement you just need in the Bank Rule to post the opposing debit/credit entry to a clearing account, where the contra from the transactions will cancel themselves out.
Bank Spend Money - Credit Bank and Debit Transaction Clearing Account
Transferred via cheque or in cash or even online to Bank B.
I am aware of “Trasfer money” transaction. But, what can be done when there are multiple transfers in both the bank accounts and entries are totally dependent by uploading a bank statement for both the accounts.
Thank you very much. You understood my problem right.
So, should I create an account in “Chart of Accounts” named as “Internal Transfers” in current assets?
Also, are you saying that payment done from Bank A (to bank B) and payment received to Bank B (from bank A), both the transactions to be entered in new account only created in Assets?
My usage is 100% oriented on uploading bank statements for my multiple accounts.
Okay, but transferred from where? For the extra Rs. 100 to have shown up in Income, you had to allocate the transaction there. If this was, in fact, a transfer from Bank A, no matter how it was accomplished, it should not be categorized as income. If you want to do everything by importing statements, you must have the clearing account @Brucanna has described. You will debit and credit the same clearing account as you import statements from the two banks, so there is no net effect on income or expenses. If you do anything else, you will double count, as you have.
Yes, but where should I create a clearing account? Under Assets or somewhere else?
Can I name the clearing account as “Internal Transfers Account” for my easy understanding?
How about Special Account function, it can go automatically either liability or asset control account (whichever is more in debit side or credit side) for Internal Clearing Account?
This would make it unnecessarily complicated - just a standard COA is all that’s required.[quote=“acecombat2, post:11, topic:9267”]
whichever is more in debit side or credit side
[/quote]
After all the bank statements have been imported and processed the balance will always be zero so you will never have “more in debit side or credit side”
