How do I correct a transfer between bank accounts, that was incorrectly recorded as income or expenditure?

This article explains how to correct a transaction that has been recorded in ExpensePlus as income or expenditure, but should be recorded as a transfer between bank accounts.

If you’ve transferred money from one bank account to another, it should be recorded in ExpensePlus as a transfer between accounts.

If you’ve recorded it as income / expenditure, you’ll need to correct this to avoid over-inflating the income / expenditure in your organisation’s accounts. This article explains how to make this correction, so the transaction is correctly recorded as a transfer between accounts.

What is a transfer between accounts, and how should I record it?

There are several scenarios where you might transfer money from one bank account to another. For example, you might move money:

• from a current account, to a savings account where it will earn interest
• from an investment that’s matured, into a current account

In fund accounting, when you move money in this way, it’s neither income nor expenditure. That’s because the money is your own money, which you’re simply transferring from one “pot” to another.

So you should reconcile such transactions using the transaction type 'transfer between bank accounts' – see our Help Guide article Transfer between bank accounts for more information on how to do this.

How do I correct a transfer that was incorrectly recorded as income / expenditure?

If you incorrectly reconciled a transfer as income / expenditure, you’ll need to:

• unmatch the transaction that was incorrectly matched – please see How to unmatch incorrectly matched transactions for how to do this.
• reconcile the transaction as a transfer – see Transfer between bank accounts.      

To better understand the Bank Reconciliation module, please view the module overview video here.