Lesson 38-- More Bank Transactions
This lesson shows how to use Goldenseal construction accounting software to handle bank payments, interest, bank service charges, and transfers between bank accounts.
It also explains how to reconcile your bank records, and how Goldenseal 'posts' financial information after you complete a bank transaction.
The six other classes of bank transactions are very similar to checking transactions. For each of them you will set up accounts, and then enter bank transactions when you move money in and out of the accounts.
You can use any of the following bank transactions:
You access all bank transactions through menu commands in the Bank menu, similar to the way you handle checking transactions.
EXAMPLES: To move money into or out of a Cash account, choose Cash Transactions from the Bank menu. To move money into or out of a Credit Card account, choose Credit Card Transactions from the Bank menu.
Bank payments are very similar to bank checks-- the only difference is that they don't have sequential check numbers.
Use bank payments for any of the following:
Goldenseal creates most bank payments automatically when you make an instant purchase and pay by cash, credit card or checking debit. It also creates bank payments if you use the Pay Bills command and pay by something other than a check.
To enter a payment from a cash account, follow these steps:
Use a Transfer Out to enter check printing charges, monthly account fees, over-limit fees, charges for returned deposits, and any other charges or fees that you pay directly to the bank.
To enter a service charge for a Checking account, follow these steps:
When you pay interest on a loan or credit card account, enter it exactly the same as a service charge, but enter Interest Paid into the Transfer To popup field.
Use a Transfer In to enter interest that you earn on any type of bank account.
To enter interest earned from an Investment account, follow these steps:
When you receive a miscellaneous non-interest credit directly from a bank account, enter it exactly the same as earned interest, but enter Other Credit into the Transfer From popup field.
Use bank transfers to shift money from one bank account to another. For example, to transfer funds from an investment account to a checking account, follow these steps:
Follow the same steps to handle other transfers such as an ATM withdrawal that you put into a Cash account, a transfer from savings to checking, or an automatic bank payment to a loan account.
NOTE: If you write a check to transfer funds, enter a Check transaction instead of a transfer.
When you enter a Transfer In, Goldenseal automatically creates a Transfer Out in the other bank account. To see the offsetting transaction, double-click in the Transaction Ref field at lower right.
NOTE: If you are viewing transactions for just one account and you've made a transfer to another account of the same type, Goldenseal won't be able to display it.
If you need to make a payment to someone and don't want to set up an account for them, follow these steps:
Every bank transaction includes a Tax Class field, which classifies your cash income and expenses for income tax reporting.
Goldenseal automatically enters a basic tax class for each transaction, based on the transaction type and the main account class.
To assign a different tax class to an account, follow these steps:
Every bank transaction must be 'accounted for'. You must apply it to an expense or income transaction, apply it to multiple items with a breakdown, or use it as a payment 'on account' so it covers future transactions.
Goldenseal automatically 'posts' each bank transaction. It will either mark another transaction as paid, or it will change the 'on account' balance in the account that made or received the payment.
Bank Checks and Bank Payments
If a bank check or bank payment has no breakdown, use the Payment Type field to determine how to apply the payment.
If the transaction has a Category or Item breakdown, Goldenseal considers it to be an expense transaction. Job cost reports will include the transaction, the same as a regular material purchase (or other expense transaction).
NOTE: Category and Item breakdowns are not available if the Allow Direct Bank Purchases checkbox is turned off in the Expense Preferences window.
If the transaction uses a Purchase breakdown, Goldenseal applies the payment to the listed purchases.
If a deposit has no breakdown, use the Payment Type field to determine how to apply the deposit.
HINT: To view the 'on account' balance for an account, open the browser window for that account and check the calculated values at the bottom right corner of the window.
If the deposit uses a Payment breakdown, Goldenseal applies the deposit to the listed items.
NOTE: For more about Deposits, see Lesson 44.
Transfers In and Out
If you enter a Transfer In or a Transfer Out for another bank account, Goldenseal considers the transaction to be a simple transfer between accounts. The two account balances are changed, but no other posting is done.
If a Transfer In is for Interest Received or Other Credit, you can assign the income to any job account. Usually you will add it to an Overhead account, but you can also assign it to another type of account. Goldenseal posts the job costs, but doesn't post to any accounts.
If a Transfer Out is for Interest Paid or Other Charge, you can assign the cost to any job account. Usually you will add it to an Overhead account, but you can also assign it to another type of account. Goldenseal posts the job costs, but doesn't post to any accounts.
Goldenseal makes it easy to reconcile your computer records against bank statements, so you'll catch any mistakes that you or the bank made.
Creating Reconcile Periods
To enter reconcile periods that you can use to mark off bank transactions that have cleared, follow these steps:
Marking Cleared Transactions
When you receive a bank statement for one of your checking accounts, follow these steps:
HINT: Use the Find command to locate specific transactions.
Reconciling against the Statement
After you have marked all cleared transactions in the Statement field, you can reconcile your bank transactions against the bank statement. To do so, follow these steps:
Reconciling Multiple Periods
If you need to reconcile several month's worth of bank statements, you'll need to do them in proper sequence. Follow these steps:
Cash accounting is based on when money changes hands. You can get that information from your bank transactions, since all cash income is deposited to a bank account, and all cash expenses are paid out of a bank account.
HINT: In this case, cash accounting covers income and expenses in cash, checking, credit card, investment, loan and savings transactions.
To see all of your bank transactions in one place, follow these steps:
To see a breakdown of cash income that you can use for income taxes or detailed income statements, follow these steps:
Accrual accounting is based on when expenses and income are actually in place-- usually when goods or services are delivered or installed.
You can get accrual information from your expense transactions-- equipment hours, labor hours, inventory used, material purchases, subcontractor costs and other costs.
To see a report of accrued expenses, follow these steps:
Get accrued income figures from your sales transactions and project Billing Records.
In this lesson you've learned how to make bank transfers to handle interest, service charges and transfers between accounts. You might want to take a break now, and fix some dinner.
Remember, a crisp dollar bill is a welcome addition to any salad. It has zero calories and it's jam-packed with fiber.
HINT: Smart chefs 'de-vein' currency by removing the colored plastic strip from the left side of the bill. Use a freshly honed filleting knife, and save the strips to make an attractive garnish.