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.

What is a “Record Transfer” in QuickBooks Desktop & Online?

A “Record Transfer” in QuickBooks is a transaction that moves funds between accounts without affecting your business’s overall balance. It helps keep financial records accurate by updating the balances of both accounts involved, whether in QuickBooks Desktop or Online, for transfers like bank or wire transfers.

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

How to Record Transfer of Funds in QuickBooks Desktop?

You can record funds as a transfer since you’ll be transferring those back to your personal account once everything is clear. This feature is for your virtual record to transfer funds from one account to another account.

 Here’s how:

1. Navigate to the Banking menu.
2. Select the Transfer Funds.
3. Under the Transfer Funds From the drop-down menu, choose the bank account.
4. Click the bank account on the Transfer Funds To drop-down.
5. Type the transfer amount.

6. Press Save and Close.

However, if your personal account isn’t connected, use a clearing account to temporarily put the funds from there. With this, you can create a journal entry to move funds from one account to another account. Let’s see how to set up a clearing account:

1. From the Lists menu, choose a Chart of Accounts.
2. Hit right-click anywhere in the Chart of Accounts and then select New.

3. Press the Bank radio button in the Add New Account window.
4. Click Continue.

5. Enter Clearing Account under the Account Name field (you don’t have to enter an opening balance).
6. Choose the Save & Close tabs.

How to Record a Transfer Between Accounts in QuickBooks Desktop

To record a transfer between accounts in QuickBooks Desktop, follow these steps:

• Click + New and select Transfer.
• In the Transfer Funds From dropdown, choose the account sending the money.
• In the Transfer Funds To dropdown, choose the receiving account.
• Enter the transfer amount.
• Adjust the Date if needed.
• (Optional) Add a memo for reference.
• Click Save and Close or Save and New to complete.

How to 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.

How to Record a Wire Transfer in QuickBooks Desktop

Recording a wire transfer in QuickBooks Desktop is simple. Follow these steps to ensure accurate bookkeeping:

• Steps to Record a Wire Transfer:
• Click + New and select Bank Deposit under the “Other” section.
• Choose the bank account that received the wire transfer.
• Enter the date the wire was received.
• If known, enter the sender’s name.
• Select the appropriate income account for the transfer.
• Set Wire Transfer (WT) as the payment method.
• Enter the transfer amount.
• If there are fees, enter them as a negative number under the appropriate expense account.
• Verify the deposit total matches the received amount.
• Click Save and Close or Save and New.

By following these steps, you can accurately record wire transfers in QuickBooks Desktop while keeping your financial records organized.

How to 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.

How to Record an Internal Funds Transfer in QuickBooks Desktop & online?

To record an internal funds transfer in QuickBooks, whether you are using the Desktop or Online version, follow these steps:

For QuickBooks Online:

1. Navigate to the + New button
   • In the left navigation panel, click on the “+ New” button.
2. Select Bank Transfer
   • Under the “Other” category, choose “Bank Transfer.”
3. Fill in the Transfer Details
   • Transfer from: Select the bank account you are transferring funds from.
   • Transfer to: Select the bank account you are transferring funds to.
   • Transfer Date: Choose the date of the transfer.
   • Amount: Enter the amount being transferred.
   • Memo (optional): You can add any notes for reference.
4. Save the Transfer
   • Once all details are entered, click “Save and Close” to record the transaction.

For QuickBooks Desktop:

1. Open the Banking Menu
   • Click on “Banking” in the top menu, then choose “Transfer Funds.”
2. Fill in the Transfer Information
   • Transfer From: Choose the bank account you are transferring funds from.
   • Transfer To: Select the bank account receiving the funds.
   • Date: Set the date of the transfer.
   • Amount: Enter the transfer amount.
   • Memo (optional): Add any notes about the transaction.
3. Record the Transfer
   • Click “Save & Close” to finalize the transfer.

Key Notes:

• Use bank transfers for internal moves between accounts within your business, not for customer payments or vendor refunds.
• Always double-check the transfer details, especially the amounts and the correct accounts to ensure accurate bookkeeping.

How to Transfer Money Between Accounts in QuickBooks Desktop & Online

Transferring money between accounts in QuickBooks is a simple process. Whether you’re using QuickBooks Desktop or QuickBooks Online, the steps are similar. Here’s how to do it:

In QuickBooks Desktop:

1. Go to the Banking Menu: Open your QuickBooks Desktop and click on the Banking menu.
2. Select Transfer Funds: Choose Transfer Funds from the list.
3. Fill in Transfer Details:
   • From Account: Select the account from which you are transferring money.
   • To Account: Choose the account where the money will be transferred to.
   • Amount: Enter the transfer amount.
   • Date: Set the date of the transfer.
4. Save the Transfer: Once all information is entered, click Save and Close.

In QuickBooks Online:

1. Go to the Banking Tab: In QuickBooks Online, navigate to the Banking tab.
2. Choose Transfer: Click on Transfer at the top of the page.
3. Enter Transfer Information:
   • From Account: Select the account you’re transferring money from.
   • To Account: Select the account where the funds are going.
   • Amount: Enter the amount of money being transferred.
   • Date: Set the date for the transfer.
4. Record the Transfer: Click Save and Close to complete the process.

Tips:

• Ensure both accounts are linked in QuickBooks for a smooth transfer.
• Use transfers to move money between checking, savings, and other accounts within your company file.

How to Transfer Funds in QuickBooks Desktop & Online

Transferring funds between accounts in QuickBooks is a straightforward process, whether you’re using QuickBooks Desktop or QuickBooks Online. Here’s how you can do it in each version:

QuickBooks Desktop:

1. Go to the Banking Menu: From the main screen, click on the Banking menu, then select Transfer Funds.
2. Select Accounts: Choose the account from which you want to transfer funds (Source Account) and the account to which the funds will be transferred (Target Account).
3. Enter Transfer Details: Enter the amount you want to transfer and any relevant information, like the date.
4. Save the Transfer: Click Save & Close to complete the transaction.

QuickBooks Online:

1. Go to the Banking Tab: In the left-hand menu, click on Banking and select the Transfer option.
2. Choose Accounts: Pick the account you’re transferring funds from (Source Account) and the account you’re transferring funds to (Target Account).
3. Enter Transfer Amount: Enter the amount to be transferred and fill in any additional details like the date and description.
4. Confirm Transfer: Click Save and Close to record the transfer.

By following these steps, you can easily manage funds between accounts in QuickBooks, keeping your records up-to-date and accurate. Whether you’re using the desktop or online version, transferring funds is quick and simple.

How to Record a Transaction as a Transfer in QuickBooks Online

Recording transfers in QuickBooks Online is simple. When you move money between accounts, you can classify the transaction as a transfer for accurate record-keeping. Here’s how to do it:

1. Go to the + New Button
   From your QuickBooks Online dashboard, click on the + New button on the left-hand side.
2. Select Transfer
   Under the “Other” category, select Transfer.
3. Choose the Accounts
   • Transfer From: Select the account from which you are transferring money.
   • Transfer To: Select the account where the funds will be transferred.
4. Enter the Transfer Amount
   Enter the amount of money being transferred.
5. Date and Memo (Optional)
   • You can adjust the Date if necessary.
   • Optionally, add a Memo to provide more details about the transfer.
6. Save the Transfer
   Once everything looks good, click Save and Close or Save and New if you want to record another transfer.

By following these steps, your transfer is recorded accurately in QuickBooks Online, reflecting the movement of funds between your accounts.

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.

FAQs

What account type is marked as Transfers in QuickBooks?

Checking and Savings accounts both are marked as Transfers in QuickBooks.

 Is a Transfer an Expense?

Transfers are intended to move funding, not expenses, so funds are transferred into an account (to cover expenditures), rather than expenses moved out.

What is a Transfer of funds between two accounts?

When you move money from one bank account to another, you need to record this as a transfer. This ensures your account balances are correct, and that you won’t mistake a single movement of funds between your accounts as income (or an expense).

What are the categories for Transfers in QuickBooks?

There are three categories for transfers in QuickBooks such as – owner’s deposit, owner’s withdrawal, and credit card payment.

How to Edit or Delete a Recorded Transfer in QuickBooks

Mistakenly recorded a transfer in QuickBooks? No worries! You can easily edit or delete a transfer to keep your records accurate.

Editing a Transfer in QuickBooks Online & Desktop

1. Go to the Transaction List:
   • In QuickBooks Online, navigate to Transactions > Chart of Accounts, then select the account where the transfer was recorded.
   • In QuickBooks Desktop, open the Register for the account.
2. Find the Transfer:
   • Locate the transfer transaction you need to modify.
3. Edit the Transfer:
   • Click on the transfer to open it.
   • Update details such as the amount, date, or accounts involved.
   • Click Save & Close to confirm changes.

Deleting a Transfer in QuickBooks

1. Follow the steps above to locate the transfer in your transaction list.
2. Click on the transaction to open it.
3. Select Delete (or use the More > Delete option in QuickBooks Online).
4. Confirm the deletion.

How to Categorize Bank Transfers in QuickBooks

Properly categorizing bank transfers in QuickBooks ensures accurate financial records and smooth reconciliation. Here’s how you can do it:

Step 1: Access the Bank Transactions

• Open QuickBooks Online or QuickBooks Desktop and go to the Banking or Transactions tab.
• Select the bank account where the transfer occurred.

Step 2: Identify the Transfer

• Find the transaction in your bank feed or manually enter it if it’s not automatically imported.
• Click on the transfer to review its details.

Step 3: Categorize the Transfer

• Choose “Transfer” as the transaction type.
• Select the correct “From” and “To” accounts to ensure the transfer is recorded properly.
• Add notes or memos for better tracking.

Step 4: Match or Reconcile

• If QuickBooks detects a matching transaction, confirm it to avoid duplicate entries.
• Reconcile the transfer during your monthly bank reconciliation to ensure accuracy.

Common Scenarios for Categorizing Transfers

• Between Business Bank Accounts: Mark it as a transfer rather than income or expense.
• Credit Card Payments: Record it as a credit card payment instead of a transfer.
• Loan Payments: Split between principal (liability) and interest expense if applicable.
• Owner Contributions or Withdrawals: Categorize under Owner’s Equity or Drawings.

How to Record Transfers Between Bank Accounts in QuickBooks Desktop & Online

Recording transfers between bank accounts in QuickBooks is a straightforward process. Here’s how you can do it for both QuickBooks Desktop and QuickBooks Online:

For QuickBooks Desktop:

1. Open QuickBooks Desktop and go to the Banking menu.
2. Select Transfer Funds.
3. Choose the Account to Transfer From and the Account to Transfer To.
4. Enter the Amount and any Details (such as memo or description).
5. Click Save & Close or Save & New if you need to record more transfers.

For QuickBooks Online:

1. Log in to QuickBooks Online and navigate to the + New button.
2. Under the Other section, select Transfer.
3. Choose the Transfer From and Transfer To accounts.
4. Enter the Amount and Date.
5. Click Save and Close to complete the transfer.

This process helps you easily manage transfers between bank accounts in QuickBooks.

How to Transfer QuickBooks Online Data to a New Account

Transferring your QuickBooks Online data to a new account is a straightforward process, but it’s essential to follow the correct steps to ensure that everything is done properly. Here’s how to do it:

1. Sign In to Your QuickBooks Online Account
   Log in to the QuickBooks Online account that you want to transfer data from.
2. Export Your Data
   In QuickBooks Online, go to the Settings menu and select Export Data. This allows you to download reports and financial data that you want to keep when transferring.
3. Set Up the New QuickBooks Online Account
   Create or sign in to your new QuickBooks Online account.
4. Import Your Data
   Once your new account is set up, go to the Settings menu and choose the option to Import Data. You can upload the exported files from your old account.
5. Reconfigure Settings
   You may need to reconfigure settings such as payment methods, invoices, and other preferences in your new account.
6. Verify the Transfer
   Ensure that all your data has been correctly transferred, including customer details, transactions, and financial reports.

By following these simple steps, you can easily move your QuickBooks Online data to a new account without losing any important information.

When to Use a Bank Deposit Transaction to Record a Transfer in QuickBooks

A bank deposit transaction in QuickBooks is used when funds are deposited into your account, but you want to categorize or track the money as a transfer between accounts. Here’s when to use it:

1. Recording Transfer Between Accounts:
   If you’re moving money from one account to another (e.g., from a checking to a savings account), you can use a bank deposit to record the transfer. This ensures both accounts reflect the change.
2. When No Sales or Income Is Involved:
   If the transaction is strictly transferring funds without generating income, like internal transfers between business accounts, using a bank deposit helps categorize the movement properly.
3. When You’re Depositing Funds from Transfers:
   For cases where the funds were transferred, for instance, from a different financial institution or another account of the same company, a bank deposit transaction will allow you to categorize it correctly.

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.