Skip to main content
D
DileepaNirmal
June 5, 2023
Question

Fund transferred to incorrect bank account

  • June 5, 2023
  • 2 replies
  • 0 views

Greetings!

 

I mistakenly transferred funds to the incorrect bank account number. And I got the money back into the bank account. What is the proper way of recording this process?

 

I hope to create an account called "Incorrect fund transfer" under the assets to record this.

 

I'd like to have your suggestions on this case.

 

I appreciate any help you can provide.

 

2 replies

D
DileepaNirmalAuthor
June 5, 2023

@paul72 

C
ChristieAnn 11
June 5, 2023

Welcome back to the QuickBooks Community, DileepaNirmal. I'll ensure you can record the transferred funds properly in QuickBooks Online by following the steps below

 

To begin, I recommend creating a journal entry to record the amounts you've transferred. This entry allows you to move funds between accounts and make sure your books balance in particular ways. I recommend consulting an accountant before doing the process. They will be able to advise you on how to correctly handle transfer transactions, particularly the category or account to utilize for debit and credit.

 

Here's how:

 

  1. Click the + New button and choose Journal entry.
  2. On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
  3. From the next line, choose the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
  4. Enter information in the memo section so you know why you made the journal entry.
  5. Fill in the other necessary field.
  6. Click Save and close.

 

On the other hand, you can open this article on how you can create an Incorrect fund transfer account under the assets to track your transfer entries: Add an account to your chart of accounts in QuickBooks Online.

 

Lastly, I'm adding this article that you can read for additional guidance in moving funds between two companies: Transfer funds between accounts.

 

You can always get back to me if you need more help with transferring funds in QBO. I'll be here ready to back you up, DileepaNirmal. Have a great day!

paul72
paul72
June 9, 2023

Hi @DileepaNirmal 

Do you mean you transferred the money to another of your bank accounts - or you sent a Bill Payment to an incorrect account (not the person/company you intended it to go to)?

 

If it was an internal account (one that is already shown in QBO CoA) it's simply a Transfer in QBO for both directions.

 

If you sent a payment to the wrong person, I guess there are a few ways to record it.

 

(1)  Enter the incorrect payment as a Bill Payment.  Enter the Money Returned as Deposit to Accounts Payable & using the Supplier's Name - this will make sure it shows up on the Supplier's Register - with a brief description of why the money has been returned.  Then Pay Bill again to clear off against the Deposit (which will appear in Pay Bills because you entered in AP).

 

(2)  Following your thoughts - you could enter as a Cheque in QBO using your Incorrect Fund Transfer account & NoVAT code to keep it off the VAT Return.

Enter the return payment as a Deposit with the same settings.

 

(3)  If the payment/refund happened relatively quickly (so they show in the same accounting period & on the same bank statement for example) & they clearly offset each other, I wouldn't bother keying into QBO at all.

(you really don't have to mirror every minor detail in QBO - just enough to make sure that accounts balance at the end of the month/quarter/year & enough to any unusual transactions such as this can be explained as & when necessary).

 

Hope this helps.

D
DileepaNirmalAuthor
June 13, 2023

Thank you, @paul72, for the detailed explanation.

 

I meant a bill payment to an incorrect account (not the person/company I intended it to go to).

 

Paul, he is not a supplier of our business. Therefore, I did not add him as a supplier in QuickBooks.

And I created an account named "Incorrect bank transfer" under the current liability and recorded the transactions using journal entries. (To quickly identify the case, I added a description in journal entries.)

 

 

 

 

 

 

 

 

Terms & ConditionsAccessibility statement