Contrary to what your friends may have told you, the process of moving cash from one bank account to another within the same business is NOT income when it comes to recording the transaction in QuickBooks (though that would be nice for sure!).
Rather, all that is being done in this case is the transfer of funds from one asset account to another within the same business.
Example - a business transfers $10,000 from a Checking account into a Savings account to put the money away for a rainy day.
In QuickBooks, there are two ways to go about recording this transfer in your accounting records:
- Use the Transfer Funds button found in the Banking option in the menu bar.
- Use the Write Checks window
Either option gets the job done for you. Option 1 is probably easier if you move the money via an online electronic transfer and Option 2 is easier if you are actually making a physical deposit of a check at the bank.
Even better, by using either of the options above, your accounting records will properly reflect the transaction being made. No more will you have a profit and loss report showing income that doesn't exist.
In a future post, I'll discuss how to move money between bank accounts that exist in different businesses.