Q-1:

Subject: Quicken Tips

 

Hi Kerry,

 

I came across your Quicken tips today and found it quite helpful.  I've been doing on-line banking for quite some time now and I'm a bit confused about managing multiple accounts.  We have several accounts at our bank (home chequing, home savings, child's savings, 2 business acounts, a line of credit and a visa card) all with on-line banking.  It's really handy being able to download all our transactions for each account into Quicken, but I'm running into problems when I try to use Categories/Transfer List since the transaction appears as a deposit in one account and a payment in the other account.

 

I figured out that using a Category doesn't work since it looks like income when it really is just a transfer.  So I've tried using the Transfer List, but when I do this, it duplicates the entry in the other account.  I'm not sure the best way to handle this.  I've been using the Transfer List while in one account, then just deleting the one generated by the on-line banking in the other account, but I was wondering if you knew of a better way.  Any suggestions you have would be greatly appreciated.

 

Thanks,

 

PS  I hope this makes sense - I don't have much of a background in this so I'm not too up on the lingo.  I'm also not sure if I've totally missed the boat on this.

A-1:

As I said in my online tips, transfers between bank accounts should not be posted to anything that will show up on the P&L, such as an Income or Expense category in Quicken. 

Ideally, only one entry needs to be made to reduce the balance in one account and increase the balance in the other.  If your online banking downloads the entries into each account's register, you could very easily end up with duplicate entries for the transfers. 

You have a couple of ways to handle this.  You could just delete the duplicate entries.

Another way is to set up a new Bank Account in your chart of accounts called "Transfers."  When posting transfers between actual bank accounts, have the offsetting side go to this new Transfers account.  You can train the online activity downloads from your bank accounts to use this account automatically.  If posted properly, the ending balance in the Transfers account should always be zero.

Good luck.  I hope this helps.

Kerry Kerstetter

Q-2:

Hi Again,

 

I liked your explanation of Cash Accounts.  I tried setting this up awhile back, but found I was very bad at keeping track of where the money was going.  My question is, what do you do in this situation to update your cash account to reflect the actual balance when you don't know where some of it has gone.

 

Sorry if this is a totally silly question.

 

Thanks again,

A-2:

What I usually do is make a big adjusting entry as of the end of the year to bring the balance in line with reality, with the offset to something like Personal Supplies.  You should actually do this occasionally throughout the year, with the offsetting categories the closest to where you think the money was spent.  As long as you aren't claiming a tax deduction for these expenditures, accuracy isn't that crucial a matter.

I hope this helps.

Kerry Kerstetter

Follow-Up:

Thank-you so much!!

 

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 2/12/2006 01:23:00 PM Send this post: