Transfer funds between accounts

[Cain]

I am wondering how I go about transferring funds between a money market and checking account. Do I have to set up new account in the chart of accounts? I'm a beginner at this.
Thanks!

[dringstrom]

Yes, you need to add a second cash account. How are you making the transfers? By check, or by phone/online? Give us a little more background, and we can suggest the best way to record the transaction (there are a couple of ways to choose from).

[Cain]

Thanks for the reply. I am using a check cut from one account and deposited in the other.

[dringstrom]

Since you're writing a check, you have two choices:

1. When you're entering your check in Peachtree, choose the second cash account where you're depositing the funds to. This will post a direct debit to that cash account, which means you won't have to enter a receipt transaction.

2. If that seems confusing, set up a third account in Peachtree, called Cash Transfers. Post your check to this account, then when you deposit the funds into the other account, post the cash receipt to this account. At this point, the Cash Transfers account should once again have a zero balance.

Hope this helps!

[chiefmm]

Thank you so much for your explanation of how to record this!! I am assuming when setting up the 3rd account, Cash Transfers, this is a cash account, not a receivable. Please reply.

Thank you again!

[dringstrom]

If you go the 3rd account route, it should be an Other Current Asset. The account type really doesn't matter much, because this account should always net out to zero. Using Other Current Asset is a safe bet, though, to ensure that if you miss a step that a new account will appear on your balance sheet until you resolve the discrepancy.

[chiefmm]

Thanks for your help!

[David Palmer]

When interest is posted to the money market account you should make a journal entry to debit the money market account and credit a interest income account for the interest amount.

[don718us]

How can we do in case of transferring by phone/online? Thanks

[dringstrom]

Either enter a check, and use Phone or Online as the check number, and follow the instructions above, or use Tasks, Receipts, and reference the cash account that you're taking the money on the first line of the transaction.