Entering Transfers Between Bank Accounts
In the normal course of events, transferring from one bank account to another simply requires a single entry which debits one account and credits the other.
However, this causes a problem with bank reconciliations. When the entry under the first bank account is marked off, the entry under the second bank account is also considered marked off and will therefore not appear in the bank reconciliation.
This occurs because each entry is considered a single entry for bank reconciliation purposes even though it involves two accounts.
The workaround is to post transfers between bank accounts as two entries, using a suspense account as the contra for each transaction.
For example, to transfer $1,000 from Westpac (bank account 16014) to ANZ (bank account 16010), post the following entries:
|16014||7000||18/02/05||0.00||1000.00||TRANSFER TO ANZ|
|16010||7000||18/02/05||1000.00||0.00||TRANSFER FROM WESTPAC|