• Amanda Amey

How to process bank TRANSFERS

In Xero, if you are transferring money from one bank account that is set up in Xero, to another one of YOUR bank accounts that is also set up in Xero. (example, when you transfer money from your main business account to a GST saver account) it is really important that you don't use the "create" tab, but rather that you use the "Transfer Tab"




Why does this matter ?


If you use the create tab Xero will not automatically create a credit in the other bank account, so in effect you end up double processing and potentially picking up double credits or double debits.



If you use the Transfer tab, Xero will give you a drop down menu of which account you are transferring the money to.



Then, when you go into that account to reconcile the bank, you will notice that credit is already there and xero has turned it green and suggests it for you. So all you need to do is click the Okay button.




Then how do I pick up the actual Expense?


The way you pick up the expense (to get the deduction in your Tax return) is by using the Create Tab when you actually Pay the supplier. You cannot use the create tab and pick up the material expense unless you are actually paying the money TO the supplier. Transferring the money to your "materials" bank account, or "GST Saver" account is not actually Paying the expense. It is merely transferring money from one bank to another.


Quick Tip : The GST code for bank tranfers is Always BAS excluded




This articles intention is to inform rather than advise and is based on legislation at the time. Each Taxpayer’s circumstances vary so we strongly recommend that you discuss this information with your Tax Agent, Accountant or Bas Agent before implementation. If you take, or do not take action as a result of reading this article, we accept no responsibility for any financial loss incurred.

 

Knowledge is the Key, Let us help you

Accounts and More trades under a separate legal entity and carries out Bas Agent and Bookkeeping services under Amanda Amey Bas Agent Lic. 89917009

MQ Accountants is a separate legal entity and carries out Tax Agent and Accounting services under Nicholas Moon, Tax Agent Lic. 25922767

 

CONTACT DETAILS

PO Box 14, Nobby Beach, Qld 4218

Phone : 0409 715577

E. accounts.more@bigpond.com