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Former Member

Bank to Bank Transfer

Hello

We wanted to move cash from our Savings to business current account, so decided to do a bank to bank transfer.

We could see the Current Account increase in the Cash position.

When we checked the GL account linked to the bank account, it was empty and instead another GL account linked for a Clearing account was used.

Is anyone familar with the next steps to move from the clearing account ?

Thanks,

Kevin.

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  • Best Answer
    Posted on May 19, 2015 at 12:47 AM

    Hi Kevin,

    Note on a bank-to-bank transfer scenario, a pair of payments is always created. One is the Outgoing Bank Transfer and the other is the Incoming Bank Transfer. These are created together once you post the cash transfer.

    The journal entry at this moment will credit the Cash Disbursement account and debit the Cash Receipt account.

    Cash Disbursement and Cash Receipt accounts are offset accounts to the bank balance account. These accounts collects any type of cash disbursement/receipt issued from any bank account.

    As soon as you Post this bank-to-bank transfer the incoming and outgoing payment parts are created (See in the Payment Monitor) for the respective bank accounts with the "Ready for Transfer" status.

    You can now select the outgoing part and set it to "In Transfer". This will make both the incoming and outgoing parts to be In Transfer. Once the payments are in transfer, you are able to Confirm them in a Bank Statement.

    The scenario requires you to create two bank statements. One for the sender account (confirms the outgoing amount) and other for the recipient (confirms the incoming amount). Once you post the bank statement confirming the outgoing part, a new journal entry is created. On this journal entry, the system will now debit the Cash Disbursement account and credit the G/L Account representing the bank deposit account for Savings.

    Hence, once you post the bank statement with the incoming part, another journal entry is created, which then credit the Cash Receipt and debit your business account.

    Long story short:

    Bank-to-bank transfer Journal Entry: credit Cash Disbursement and debit Cash Receipt.

    Bank Statement for outgoing part: debit Cash Disbursement and credit sender account (Savings).

    Bank Statement for incoming part: credit Cash Receipt and debit recipient account (business).

    I hope this clarifies the scenario.

    Best Regards,

    Alexandre.

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  • author's profile photo Former Member
    Former Member
    Posted on May 19, 2015 at 10:49 AM

    Hi Alexandre,

    Are you familar with how to enter the opening cash balance manually ?

    Thanks,

    Kevin.

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    • Hello Kevin,

      As we discussed on the phone, Opening balance would be calculated automatically by the system.

      Opening balance = Closing balance of last posted bank statement

      Closing Balance = Opening balance + Incoming payment - Outgoing payments.

      When you create a bank statement, You will only need to change the closing balance depending on the transaction matched in the Bank statement.

      If you have not created any Bank statement for the bank, in that case opening balance will be 0 calculated automatically by the system.

      Can we have exact use case as why you need to enter the opening Balance manually?

      Regards,

      Harshal

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