I am escrowing taxes as part of a payment I receive for a house I sold on owner financing. I collect $352.00. $302.84 is mine and goes to the income category. $49.16 goes to a liability special account for tax escrow. The problem is, they aren’t kept in the same bank account. I deposit them into the same bank account, then transfer the escrow elsewhere. I don’t see how to do it when putting in the transaction. I thought about doing an intrabank transfer, but that would decrease my cash on hand artificially.
You use two accounts and therefore you should create two accounts in Manager. You receive payment of $352 in your main bank account. Because you formally transfer $49.16 to the other bank account this would be reflected in the bank statements of each of the banks, ie $49.16 paid from the main bank account and $49.16 received in the other bank account. So not sure what your problem is.
No, it would not. As you seem to have things set up, it just separate your cash into two control accounts for reporting purposes. (You actually did not say how the special account is defined, in other words, which control account it is assigned to.) That is no different than dividing your cash into Cash on hand and Cash at bank.
But the bigger question is why you are using a special account at all. (I am not saying you should not, but only that it may not be necessary.) If this separate tax escrow bank account is used for nothing else, you could create it the same way as a credit card. That is, create a custom control liability account named Tax escrow and assign the bank account to it.
I see the error in my intrabank transfer. I am moving from one hand to the other but still in possession. I guess what I am trying to ask is how should I setup an account to hold money that really isn’t mine? i.e. Sandbox received $150 check, of which $100 belongs to sales and $50 belongs to shipping, that I will use to pay the shipper when they send the invoice periodically. Cash on Hand/Bank shows that I have $150 to spend, but I don’t really. I can do a intrabank transfer to move it from 1st National Bank which is my operating account, to 2ndNational Bank which is a reserve account, but I still need to know how much I can spend on new widgets or costs.
Sandbox (2021-12-23).manager (16 KB)
Also, the 2nd National Bank is a reserve account which holds my money as well as escrow money, so I need to know how much of that belongs to Customer X shipping account escrow.
I explained what you need to do, you are overcomplicating things. You also did not answer @Tut’s question as to why you decided to use a special account for this.
In addition to my earlier comment, assume that the Escrew account is not an outside Account you can still set it up as a bank account or cash account (does not really matter for this example) and use inter-account transfers (needs activating in Customize) to move funds from on to the other and back.
That is not true. The money belongs to your business as an asset, not to any income or expense account. The fact is you can spend that money on anything you want. Anticipating future expenses does not link money in a bank account to them.
Only the escrow amount is a true liability.
That’s what I thought I was supposed to do. Only reason. Open to anything.