Talk:Bank to Bank Transfer Transaction tips

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Bank Transfer Tips

Good tip usman, but there is a small issue with this approach and that is the transfer happens instantaneously. So, if the bank transfer takes a number of days then the accounts might no accurately represent the current standing. For example Imagine we have two banks ABC & XYZ. When we process the above dummy cash book entries (for say $100) we get the gl posting

• 11110 - Checking In-Transfer DR 100
• 11110 - Checking In-Transfer CR 100

Which is fine.

• Our assets are not effected as both balance each other.
• But it often takes some time for such a transaction to complete, i.e. it first leave bank ABC but does not arrive in XYZ for a number of days.
• So when we do the Bank reconcilliation (i,.e. create the Bank Statement) for ABC the $100 is transferred out of our account.. but it will not appearred in our XYZ accuont for a number of days and in that time our accounts will be missing the $100!

Another approach is:

• 1. Create a GL account in the called "Funds in Transit" somewhere under the "Cash" summary account, for example 11400 (using the GW schema). It should has account type Asset.
• 2. Create a Charge "Funds in Transfer" pointing to this new GL account.
• 3. If you haven't already create the banks as Business Partners (you typically would already to manage the contacts there!)
• 4. Now to make the transfer by
  • 4a. Create an AP Payment in ABC and put to the charge 'Funds in Transit' complete and post.
  • 4b. Create an AR Payment in AXY and put to the charge 'Funds in Transit' complete and post.
• 5. Pick up in the Bank Statements process as per usual later.

In this scenario even when the $100 has left the ABC Bank a/c (i.e. when AP payment is reconciled with the Bank Statement) and not yet in our XYZ Bank a/c ... we still retain the value in the new asset GL a/c "Funds in Transit" so our balance sheet correctly represents our asset values.

This tip is based on the "How To"s I found on the adaxa website (www.adaxa.com.au) a great source for practical impelmentation solutions on compiere or adempiere.

colin ps. I don't have time currently to make a wiki entry too but perhaps someone can us this information to do so? :)

Hi, Colin.

Thanks for review and sharing your another good tips.

Btw, about the case when delay occurs in funds transfer :

1. We can hold Bank statement for XYZ until the funds received.

2. Checking-in Transfer is also under asset and it serve same purpose with Fund in Transit.

Rgds.

Usman

>> 2. Checking-in Transfer is also under asset and it serve same purpose with Fund in Transit.

Actually you are correct usman and I was wrong. I had thought when the first bank rec was completed (but before the second was) there would be an imbalance... but I seem to have been mistaken.

Sorry if I frightened anyone! :)

colin

sorry. I didn't proof read before posting and made lots of typos; the most important being...

• 2. Create a Charge "Funds in Transfer" pointing to this new GL account. should be "Funds in Transit" ... Which was probably obvious but just in case!

colin

Yes, actually this is a preferred way to handle the situation and also for handling cash to bank transfer.

In fact, I discourage the usage of Bank Account transfer in Cash Journal. For larger company, usually there are separate persons who handles cash and bank. They have to maintain their own transaction document, for example a cash-out and a bank-in. In Adempiere you create a cash journal, point to Fund in Transit charge and in AR Receipt you point to the same charge. Moreover, it also allows different date of transaction.

Best regards,

Armen

Implemented?

It appears this AP Payment and AR Payment are implemented under Bank Transfer. Only thing you need to do is add the GL Account and the Charge. Like wise the Cash Book Method described on the "page" is implemented as Immediate Bank Transfer. Of course you need to setup the cash book. I am guessing this made it in somewhere around 3.5 3.6?