Small tips to handle 1 source Bank to 1 recipient Bank transfer transaction.
1. Create new cash journal.
2. Select appropriate cash book ( in my case i use dummy cash book to serve this transaction)
3. Next go to cash line and create a new line and select cash type as bank transfer.
4. Then select source bank account and type in transfer amount
5. Create 2nd line as in step 3.
6. This time select recipient bank account and type in transfer amount but in negative sign.
7. Back to cash journal tab, complete and post it.
8. To finalize it create, complete and post Bank statement for each bank account.
PS. Above tips can be use for more complex scenario such as transfer from 2 bank to 1 recipient.
Rgds.
Usman.
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Good tip usman, but there is a small issue with this approach and that is the transfer happens instantaneously. So, if the bank transfer takes a number of days then the accounts might no accurately represent the current standing. For example
Imagine we have two banks ABC & XYZ.
When we process the above dummy cash book entries (for say $100) we get the gl posting
11110 - Checking In-Transfer DR 100
11110 - Checking In-Transfer CR 100
Which is fine.
Our assets are not effected as both balance each other.
But it often takes some time for such a transaction to complete, i.e. it first leave bank ABC but does not arrive in XYZ for a number of days.
So when we do the Bank reconcilliation (i,.e. create the Bank Statement) for ABC the $100 is transferred out of our account.. but it will not appearred in our XYZ accuont for a number of days and in that time our accounts will be missing the $100!
Another approach is:
1. Create a GL account in the called "Funds in Transit" somewhere under the "Cash" summary account, for example 11400 (using the GW schema). It should has account type Asset.
2. Create a Charge "Funds in Transfer" pointing to this new GL account.
3. If you haven't already create the banks as Business Partners (you typically would already to manage the contacts there!)
4. Now to make the transfer by
4a. Create an AP Payment in ABC and put to the charge 'Funds in Transit' complete and post.
4b. Create an AR Payment in AXY and put to the charge 'Funds in Transit' complete and post.
5. Pick up in the Bank Statements process as per usual later.
In this scenario even when the $100 has left the ABC Bank a/c (i.e. when AP payment is reconciled with the Bank Statement) and not yet in our XYZ Bank a/c ... we still retain the value in the new asset GL a/c "Funds in Transit" so our balance sheet correctly represents our asset values.
This tip is based on the "How To"s I found on the adaxa website (www.adaxa.com.au) a great source for practical impelmentation solutions on compiere or adempiere.
colin
ps. I don't have time currently to make a wiki entry too but perhaps someone can us this information to do so? :)
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sorry. I didn't proof read before posting and made lots of typos; the most important being...
2. Create a Charge "Funds in Transfer" pointing to this new GL account.
should be "Funds in Transit" ... Which was probably obvious but just in case!
colin
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Yes, actually this is a preferred way to handle the situation and also for handling cash to bank transfer.
In fact, I discourage the usage of Bank Account transfer in Cash Journal. For larger company, usually there are separate persons who handles cash and bank. They have to maintain their own transaction document, for example a cash-out and a bank-in. In Adempiere you create a cash journal, point to Fund in Transit charge and in AR Receipt you point to the same charge. Moreover, it also allows different date of transaction.
Best regards,
Armen
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Thanks for review and sharing your another good tips.
Btw, about the case when delay occurs in funds transfer :
1. We can hold Bank statement for XYZ until the funds received.
2. Checking-in Transfer is also under asset and it serve same purpose with Fund in Transit.
Rgds.
Usman
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>> 2. Checking-in Transfer is also under asset and it serve same purpose with Fund in Transit.
Actually you are correct usman and I was wrong. I had thought when the first bank rec was completed (but before the second was) there would be an imbalance... but I seem to have been mistaken.
Sorry if I frightened anyone! :)
colin
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Hi, Adempierans.
Small tips to handle 1 source Bank to 1 recipient Bank transfer transaction.
1. Create new cash journal.
2. Select appropriate cash book ( in my case i use dummy cash book to serve this transaction)
3. Next go to cash line and create a new line and select cash type as bank transfer.
4. Then select source bank account and type in transfer amount
5. Create 2nd line as in step 3.
6. This time select recipient bank account and type in transfer amount but in negative sign.
7. Back to cash journal tab, complete and post it.
8. To finalize it create, complete and post Bank statement for each bank account.
PS. Above tips can be use for more complex scenario such as transfer from 2 bank to 1 recipient.
Rgds.
Usman.
Hi Usnam,
thank you for sharing your knowledge; your how-to contributions in the Wiki are good, too.
Best regards,
Mario Calderon
Yes, here i give the link done by Usman http://www.adempiere.com/wiki/index.php/Bank_to_Bank_Transfer_Transaction_tips
Good tip usman, but there is a small issue with this approach and that is the transfer happens instantaneously. So, if the bank transfer takes a number of days then the accounts might no accurately represent the current standing. For example
Imagine we have two banks ABC & XYZ.
When we process the above dummy cash book entries (for say $100) we get the gl posting
11110 - Checking In-Transfer DR 100
11110 - Checking In-Transfer CR 100
Which is fine.
Our assets are not effected as both balance each other.
But it often takes some time for such a transaction to complete, i.e. it first leave bank ABC but does not arrive in XYZ for a number of days.
So when we do the Bank reconcilliation (i,.e. create the Bank Statement) for ABC the $100 is transferred out of our account.. but it will not appearred in our XYZ accuont for a number of days and in that time our accounts will be missing the $100!
Another approach is:
1. Create a GL account in the called "Funds in Transit" somewhere under the "Cash" summary account, for example 11400 (using the GW schema). It should has account type Asset.
2. Create a Charge "Funds in Transfer" pointing to this new GL account.
3. If you haven't already create the banks as Business Partners (you typically would already to manage the contacts there!)
4. Now to make the transfer by
4a. Create an AP Payment in ABC and put to the charge 'Funds in Transit' complete and post.
4b. Create an AR Payment in AXY and put to the charge 'Funds in Transit' complete and post.
5. Pick up in the Bank Statements process as per usual later.
In this scenario even when the $100 has left the ABC Bank a/c (i.e. when AP payment is reconciled with the Bank Statement) and not yet in our XYZ Bank a/c ... we still retain the value in the new asset GL a/c "Funds in Transit" so our balance sheet correctly represents our asset values.
This tip is based on the "How To"s I found on the adaxa website (www.adaxa.com.au) a great source for practical impelmentation solutions on compiere or adempiere.
colin
ps. I don't have time currently to make a wiki entry too but perhaps someone can us this information to do so? :)
sorry. I didn't proof read before posting and made lots of typos; the most important being...
2. Create a Charge "Funds in Transfer" pointing to this new GL account.
should be "Funds in Transit" ... Which was probably obvious but just in case!
colin
Hi Colin,
Yes, actually this is a preferred way to handle the situation and also for handling cash to bank transfer.
In fact, I discourage the usage of Bank Account transfer in Cash Journal. For larger company, usually there are separate persons who handles cash and bank. They have to maintain their own transaction document, for example a cash-out and a bank-in. In Adempiere you create a cash journal, point to Fund in Transit charge and in AR Receipt you point to the same charge. Moreover, it also allows different date of transaction.
Best regards,
Armen
I am reading this again due to https://sourceforge.net/forum/forum.php?thread_id=1897387&forum_id=611161, offering a programmed resolution.
If no one has made a wiki on this i will just paste Colin's snips and warts here to the talk page of Usman's workaround.
Hi, Colin.
Thanks for review and sharing your another good tips.
Btw, about the case when delay occurs in funds transfer :
1. We can hold Bank statement for XYZ until the funds received.
2. Checking-in Transfer is also under asset and it serve same purpose with Fund in Transit.
Rgds.
Usman
>> 2. Checking-in Transfer is also under asset and it serve same purpose with Fund in Transit.
Actually you are correct usman and I was wrong. I had thought when the first bank rec was completed (but before the second was) there would be an imbalance... but I seem to have been mistaken.
Sorry if I frightened anyone! :)
colin