Moving money from "Business Checking" to "Cash-on-Hand"

ScottShusterScottShuster Member Posts: 5

Greetings, all! This is my first - and surely not my last - post, as I bravely try for the first time to do my own accounting - ulp! The instruction for "How to create a transfer between two accounts" is not working for me when I want to transfer money from "Business Checking" to "Cash-on-hand," aka petty cash. I am getting a message that says: "Failed: Cannot create transfer with that pair of transactions." What I am doing (in real life) is removing working capital from Business Checking in cash, to use for the cash payment of business expenses. Later I will show these expenses as being paid from "Cash-on-Hand" -- but first I have to move the cash into Cash-on-Hand from Business Checking - right? How should I show that in Wave? Thanks in advance for your kind reply - !

Comments

  • eliteacchkeliteacchk Member Posts: 31

    The instruction you read is on the right track.

    Navigate to Accounting > Transactions. Click the More button at the top right hand corner and select Add journal transaction, then enter the following details.

    Debit Cash on Hand the amount you are adding to petty cash
    Credit Your Cheque account by the same amount

    Click Save button to proceed.

  • ScottShusterScottShuster Member Posts: 5

    Ahh! A Journal Transaction! Thank you, Philip: You have started your day there in Hong Kong with a good deed! -- Grateful to you for this... = Scott

  • eliteacchkeliteacchk Member Posts: 31

    You're welcome. Glad I could help.

  • SeajaysSeajays Member Posts: 5

    I was just looking at the same issue - as Scott said, here it talks about creating two separate transactions and then connecting them afterwards, which sounds awfully complicated!

    Is a journal transaction the equivalent of this - what's the pros/cons of each method?

  • eliteacchkeliteacchk Member Posts: 31
    In short, the article is correct.

    Strictly speaking, you do record a payment out of the bank account, and then a deposit into the cash account, and in double-entry bookkeeping, these two are Credit and Debit entries of the transaction respectively. In Wave, you see two entries listed under Transactions instead of one - one is the one you entered, eg., withdraw money from the bank for transfer to cash, and the other is created by Wave automatically (labelled Created Transfer) for depositing money from bank acc into Cash on Hand. These two entries in Transactions correspond to the two vouchers you should be making - a payment voucher for the bank ledger, and a receipt voucher for the cash ledger.

    Technically, a Journal Entry is for anything that does not involve a bank/ cash ledger, eg., sales/ receivables (sales journal), purchases/ expenses payable, depreciation, etc., but Scott was having an issue creating the bank/ cash entries so a journal entry can have the same effect. I have a client who enters everything as journal entries and obviously it works for her.
  • ScottShusterScottShuster Member Posts: 5

    "Debit Cash on Hand the amount you are adding to petty cash
    Credit Your Cheque account by the same amount"

    (Just for clarity to future readers: For me, and what I described above, this would be the other way around: I wanted to move money OUT of my Business Checking (aka working capital) account and putting it into "Cash on Hand" -- a term I use only for "Petty Cash," aka, actual coins and bills of national currency.

    Wave uses the term "Cash on Hand" not necessary to refer to coins and bills -- "cash" -- they use it to mean any currently available money, including money that is in your bank account. Before you create other accounts in Wave, everything is referred to as "Cash on Hand." In my accounts however, I use the term "Cash on Hand" to mean only actual national cash coins and bills,

    Because that is what the word "CASH" means to me.

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