How to Post Transfers in Accounting

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Transfers are business events that may be captured in the accounting system.
Transfers are business events that may be captured in the accounting system. (Image: John Foxx/Stockbyte/Getty Images)

As a business grows, so does the opportunities for transfers, such as cash moves between bank accounts. Larger businesses may transfer equipment between departments or locations. Accounting, as the language of business, reflects these transfers in its financial books and reports. Posting these moves to the right accounts is usually done at the period end, when the books are closed and transactions reconciled.

Identify the transfers. Find cash moves by looking at bank statements and investment reports. To find equipment and other transfers, observe and ask other employees about any changes. Larger firms may utilize forms to document transfers, and if that's your case, obtain this documentation. When in doubt, call or email department managers or supervisors to verify any moves of furniture or other items, especially if the move involves different locations. Many local governments, such as counties, require businesses to report furniture and equipment by location. Tax is assessed, and it can change based on location.

Prepare journal entries with backup documentation. Journal entries should balance with debits equaling credits, and they should be kept at a safe, accessible location. For example, if $300 cash moved from checking account A to savings account B, the journal entry will be to debit savings-cash account B $300, and to credit checking-cash account A $300. Not all transfers require journal entries. When fixed assets move from one department to another, for instance, usually only a change in the individual records is sufficient to recognize the move.

Enter the journal entry in an accounting system using the correct date, usually the last day of a period. Be sure the journal entry is actually posted in the general ledger. Some systems post entries as they are entered, while others wait for a batch posting or for approvals. After entering the information, check on individual accounts to be sure that the entries appear -- proof that the information was indeed posted correctly. If the journal entry is not posted, look for errors, problems with dates, or ask your supervisor when an entry will be approved for posting, assuming your firm uses this setup.

Tips & Warnings

  • Follow your accounting system when recognizing transfers. Instead of journal entries, many systems require you to write checks and deposits between cash accounts.

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