General Ledger accounts defined as “reconcilable bank accounts” in File > Company > Bank have special properties as well as limitations as to where they can be used. Applying a bank G/L account in certain situations will result in a system message similar to the following:
- Ability to reconcile daily or periodically
- Access to a ledger of detail transactions
- Use in A/R cash receipts posting as a receiving bank
- Use in A/P check print as a disbursing bank
- Supports transactions from source codes Cash Receipts, Cash Disbursements and Journal Entry only
- May not be used as an expense account in Accounts Payable invoice entry
- May not be used as an adjustment offset in Cash Receipts posting
- May not be used as an offset in Miscellaneous Cash Receipts posting
- Does not support transactions from source codes Accounts Payable, Inventory Control, Sales Journal or Warranty Claim
If the funds are transferred electronically, make a journal entry to record the transaction:
Debit Receiving Bank $$$
Credit Disbursing Bank $$$
This method is suitable when a negotiable instrument is necessary to transfer the funds.
- Create a current asset G/L account called Cash Transfer Suspense in Accounting > General Ledger > G/L Account > New. This account will be used to accommodate the “sending” and “receiving” sides of the transaction without the restrictions of a regular bank G/L account.
- Establish the “receiving bank” as a vendor in File > Vendor > Master. The vendor’s Expense G/L should be set to the suspense account created in the previous step.
- Enter an A/P Invoice to the “receiving bank” in Accounting > Accounts Payable > Invoice Entry. Use the suspense G/L account established in the first step as the expense.
Source “AP” G/L Effect: Debit Bank Transfer Suspense / Credit Accounts Payable
- Produce a check for this invoice in Accounting > Accounts Payable > Check Print. Change the bank to the “sending” bank account.
Source “CD” G/L Effect: Debit Accounts Payable / Credit Signature Bank Money Market
- Receive the check into the bank via Accounting > Accounts Receivable > Cash Receipts Posting > Miscellaneous. Change the bank to the “receiving” bank account.
Source “CR” G/L Effect: Debit Valley National Bank / Credit Bank Transfer Suspense
If you do not need to maintain a vendor history for the “receiving bank,” use a non-vendor check. This process combines invoice entry and check printing into one step and does not use a full-fledged vendor.
Go to Accounting > Accounts Payable > Non-Vendor Check. The Liability account should remain Accounts Payable. Set the Bank Code to the “sending” bank. Use the suspense account as the Expense.
Post the check into the G/L bank account via the cash receipts posting screen and use the miscellaneous tab.