How to Record a Transfer in QuickBooks Desktop and Online?

Bank transfers are a quick and easy way to send or receive money, so many business owners use them in order to move funds between accounts, to pay taxes or to pay suppliers. Banks also offer a record of transactions, so business owners can check which payments were made at what time or even set payments automatically. 

On transferring funds from one bank account to another, preparing a record may be helpful for better financial management. QuickBooks enables you to record the Transfer as well as its details including the date and memos. 

Why do you need to Transfer Funds Between Bank Accounts in QuickBooks?

QuickBooks is a robust accounting software because of its excellent fund transfer feature that allows you to easily move money between your accounts with just a few clicks. We recommend that you use this feature, especially if you have multiple bank accounts. For instance, you might have one checking account for payroll and another checking account for other activities.

It’s important to understand how to record a transfer of funds in QuickBooks so that you can keep in check on an accurate account balance. If you fail to record a transfer, it may result in an incorrect balance for one or both of the accounts involved in the Transfer. This can make it difficult to reconcile your bank statements and even lead to overdrafts and even bounced checks.

Different Ways to Record a Transfer in QuickBooks!

Recording transfers in QuickBooks covers the following aspects which include:

• Recording a transfer of funds between bank accounts
• Recording a transfer between two companies in QuickBooks
• Recording a wire transfer in QuickBooks

Record a Transfer between two accounts in QuickBooks Online!

When you try to move money from one account to another, you are required to record the transaction as a transfer in QuickBooks. To keep your books organized and up-to-date, you must enter the Transfer as a single transaction that affects both accounts. Here’s how to record a transfer in QuickBooks by ensuring accuracy in your financial reporting.

Record a New Transfer

If you haven’t imported the transaction from your bank yet, below we’ve listed how to record a money transfer directly in QuickBooks:

1. Click + New.
2. Now, click Transfer.
3. In the Transfer Funds From drop-down list, select the bank account that the money is coming from.
4. After this, choose the bank account that the money is going to from the Transfer Funds To drop-down menu.
5. Enter the Amount being transferred under the Transfer Amount field. Gn
6. Then, edit the Date field and then type a description of the Transfer in the Memo field (optional).
7. Press Save and Close or Save and New to complete the Transfer.

8. Hit the Yes tab if you checked the date twice.

Record a Transfer by Check

Below are the steps to record the Transfer and the check number, just in case you used a physical check to transfer funds:

1. Select + New.
2. Click Check.
3. Now, enter the check as you normally would, including the check number.
4. Choose the account the funds are coming out of from the Bank Account field.
5. After this, select the account the funds are going into under the Category column.
6. Finally, press Save and New or Save and Close to record the check.

Match a Transfer in your Imported Bank Transactions

You can categorize and match the Transfer as soon as you’ve downloaded transactions from both accounts. To do this, you first need to record the transaction as a transfer from one account.

Let’s see how:

1. Choose Bank transactions from the BOOKMARKS. 

Tip: You can also select Bank transactions from the Transactions tab in the MENU.

2. Click on the bank account where the funds are coming from.
3. Locate and select the transaction to open it.
4. Select Record as Transfer. 
5. Then, opt for the account where you transferred the funds under the Transferred to drop-down menu.
6. Hit the Record transfer tab.

Once done, match the transaction from the other account:

1. Choose the bank account where the funds are going.
2. Hit the For review tab and then select the Recognized filter from the drop-down menu.
3. Locate the transaction. 
4. Then, select Match under the Action column so the transaction is matched in both accounts.

Record a Transfer of Funds between Companies in QuickBooks Online!

If you’re running more than one business and need to transfer funds from one to the other, it is important to remember that you are recording a two-sided transaction — you are transferring funds out of one business, and receiving funds into another one.

However, this transaction seems like a transfer because both the accounts are not in the same company files. These transactions must be recorded as an expense or a check from one company and deposited by the other company.

In some rare scenarios, this may be a loan from one company to the other, so it may increase a liability account and create an asset in another company rather than simply increasing and decreasing equity.

Note: You are recommended to consult your accountant or tax professional to ensure you record these transactions in the correct accounts based on your specific business needs.

Transfer funds

1. Click + New.
2. Now, select either Check or Expense.
3. Opt for the bank or payment account the funds are coming from.
4. After this, enter the Payee, Payment Date, and the Payment Method (optional).
5. Choose an Asset or an Equity account to reflect the funds going out of the business from the Category column.

Note: You can connect with an accountant or a tax authority to be sure to select the correct account.

6. Type the Amount to be transferred under the Amount column.
7. Press Save and Close or Save and New.

The Transfer is now recorded as a check or an expense coming out of the company.

Receive Transferred funds

1. Click + New in the first place. 
2. Select Bank Deposit under Other.
3. Choose the bank account the funds are going to.
4. Now, enter the Date.
5. Optionally specify who the funds were received from under the  Add funds to this deposit section.
6. From the Account column drop-down menu, select an Equity or a Liability account to reflect the funds coming into the business.

Note: Consult an accountant or a tax authority to be sure to select the correct account.

7. Type the Amount received in the Amount column.
8. Hit the Save and Close or Save and new tabs.

Once you’re done, the Transfer is recorded as a deposit coming into the company.

Record a Wire Transfer in QuickBooks Online!

How you record a wire transfer depends on which wire transfer you want to go through. You can record it as an expense using the Cash Expense feature or as a deposit using the Bank Deposit feature. Below, we’ve discussed both; let’s take a look:

Record a Wire Transfer as an Expense

If the money will be transferred out of your account, adhere to the following steps:

1. Click + New.
2. Select Expense under Vendors.
3. Optionally identify a vendor or place of purchase in the Payee field.
4. Use the dropdown list from the Payment account field to specify the bank account the wire was transferred from.
5. After this, enter the date of purchase under the Payment date field.
6. Choose the Payment method from the dropdown list.
7. Type Wire Trans or WT in the Ref no. field.
8. Determine the expense account that tracks the charges, or enter Accounts Payable to see if the Transfer was for a bill.
9. Write down the Amount of the purchase.
10. At last, press the Save and Close or Save and New buttons.

Record a Wire Transfer as a Deposit

If the money will be transferred into your account, follow the below-listed steps:

1. Select + New.
2. Click on Bank Deposit under Other.
3. From the Account dropdown menu, choose the bank account the wire was transferred to.
4. Now, enter the Date the wire was received.
5. On the first line, specify who the wire was Received From (Optional).
6. Decide the income Account related to the Transfer or enter Accounts Receivable if the Transfer is intended to pay an invoice.
7. Type Wire Trans or WT under Payment method.

Note: You can add this payment method if it does not display in the list.

8. Fix the transferred Amount.
9. If any fees were deducted from the actual deposit, on the next line, enter the expense account that tracks wire or bank fees, and the total Amount of the fee is entered as a (-) negative amount.
10. Check that the balance of the deposit matches the actual Amount deposited to the account.
11. Hit the Save and Close or Save and New buttons.

Bottom Line!

A bank transfer is a payment method that allows consumers and business owners to transfer money between bank accounts or companies. You can record a transfer in QuickBooks to move around funds, accept payments from a customer, pay taxes associated with your business, and pay suppliers. This practice helps you to ensure that all money flows are properly recorded. 

You can also maintain an accurate and up-to-date representation of your financial activities, which is crucial for making informed business decisions and meeting reporting requirements. It provides a clear audit trail and enhances the overall financial transparency of your business.

Disclaimer: The information outlined above for “How to Record a Transfer in QuickBooks Desktop and Online?” is applicable to all supported versions, including QuickBooks Desktop Pro, Premier, Accountant, and Enterprise. It is designed to work with operating systems such as Windows 7, 10, and 11, as well as macOS.