IFRS for SMEs / For bookkeepers / Transfers between the company's own bank accounts
Transfers between the company's own bank accounts
The rule
A transfer between two of the company's own accounts moves cash; it is not a cash flow of the business and never income or an expense (7.2). The money leaves one account and arrives in the other.
How to record it
- Post the outgoing line to the receiving bank account, and the incoming line on the other statement to the paying bank account, or use a transfer clearing account that returns to zero.
- Check that both sides were recorded: a transfer booked on one statement only leaves a balance in the clearing account.
- A payment to the company's own credit card account is recorded against that card account, not as an expense; the card statement carries the expenses themselves.
Worked examples
| Bank statement line | In or out | Categorise to |
|---|---|---|
TRANSFER TO SAVINGS | Out | Savings account |
Related
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