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HAI1670
November 23, 2022
Question

Sweep Investment Account

  • November 23, 2022
  • 2 replies
  • 0 views

I use QB Desktop. 

We recently opened an automated investment sweep with our existing banks checking account.

I did not see any articles or help topics on sweep accounts. I am looking for an overview of how to set up my chart of accounts and debit/credit/transfer funds within those charts in order to account for the sweep transactions as well as the checking account transactions. Ex: Sweep credits, what acct type and what postings, Sweep debits, what acct type and postings?

Is there a standard setup in bookkeeping for sweep accounts? I am unable to get my checking account to reconcile because of the newly added sweep transactions which are included within my checking account statement figures. Thank you.

    2 replies

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    Pete_Mc
    November 23, 2022

    I don't know if I've heard of a Business Checking Account being tied to an Investment Account.  Is it really a Checking Account and something like a Money Market?  Or do you really mean money goes out of your Business Checking into something like Merrill Lynch or Fidelity Investment?

     

    If it's a Money Market, which should just be set up as a Bank Acct in QBs.  So you'll have your Biz Checking and your Money Market "Bank" Accts.  Then you just need to show the Transfers between the two accounts.  If both are online, then when you do the Bank Feed it will capture the Transfers.  I typically do NOT like to just auto accept new entries into my accounts as the Bank Feed was designed to just SHOW you transactions for matching, not to just enter them.  But in this case after Matching all of the other Transactions, you could review the Transfers and have them enter them into the Register.

     

    If the Sweep Acct is really just the Cash Acct within a real Investment Acct.  Then you just need to show the Transactions and Reconcile the Cash at the end of the month per the statement. 

     

    And if it is really a Biz Checking and a totally separate real Investment Acct.  I think you need to have a talk with your CPA/Accountant on this.  I've just never heard of that kind of Acct, so I'm not exactly sure how it works.  I don't know that I'd want my Business Checking swept into an Investment Acct.  I might be building cash to buy the next new gizmo I need.  And if I have to pull the money back out of stocks or something else, I don't see that as good Cash Flow.  But obviously my biz is probably different than yours.

     

     

    C
    Carollw
    September 21, 2023

    I use QB online and I know what you are talking about. I can't find any help on this either. We have a Working Capital Sweep account which is part of our checking account. 

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    HAI1670Author
    September 26, 2023

    add account/bank type "Sweep Credit" and "Sweep Debit"

     

    go to your bank online statements find options for custom reports find a report with the Sweep data included, and export as CSV/Excel file. Sort columns so that the Sweep Credits, debits, and sweep interest are all sorted together and auto sum those amounts (SW CR. SW Dbt, SW Int). 

     

    1. add transfer (from CK to SW Debit) this figure is the SW Debit total from the above data sort/sum.

    2. add transfer (from SW Credit to CK) this figure is the SW Credit total from the above data sort/sum. NOTE: when you do this for the 2nd/ongoing months this figure will be "stepped over" from the previous month and a "new" transfer will NOT be entered, just step over/replace this figure. 

     

    go to the bank rec screen for the checking acct with sweep built in, enter bank statement being and end balance and the Sweep interest figure from the sum/data above for SW Int. 

     

    once into the rec screen you will find the #1 above on the checks/pmt side/listings, click it. on the deposit/credit side/listing you will find the #2 from above, click it

    these clicked/selected with all your other reg banking items should allow you to reconcile your statement (remember the Sw interest is in the main rec screen).

     

    after the rec is completed:

    add a NEW transfer (SW Debit to Sw Credit) this is the #1 figure from above)

    add a NEW transfer (Sw Credit to CK) this is the LAST SW DEBIT transaction found on the statement you just rec. 

    these two transfers should place both the sweep cash accounts back to zero. and will be ready for the next months rec.

    see if this makes sense and let me know. 

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