To import bank transfers into QuickBooks Desktop correctly, record each move between your own accounts once with Banking > Transfer Funds. Then, when the files for both accounts are imported, match the money-out line in one account and the money-in line in the other to that same transfer. Neither line should be added as income or expense.
Why does a Desktop bank transfer import as income?
A transfer between two of your accounts appears in two bank files, and QuickBooks Desktop reviews each file separately. It has no way to know that "TRANSFER TO CHK 4417" in the savings file and "TRANSFER FROM SAV 9032" in the checking file are the same money. Added as new, one becomes an expense and the other becomes income.
The damage is quiet. Each account's balance is still right, so reconciliations tie. What goes wrong is the Profit and Loss report, which now shows income you never earned and a cost you never paid. Over a year of regular transfers, such as a monthly move from savings to cover payroll, those false figures can add up to a large share of reported revenue.
Entering one Transfer Funds record for both Desktop accounts
A Transfer Funds entry is a single QuickBooks Desktop transaction that takes money out of one account and puts it into another. Open Banking > Transfer Funds, choose the account the money left and the account it reached, enter the amount and the date, and save. Both registers now show the movement, and nothing touches income or expenses.
Use the date the money left the first account. Banks sometimes post the receiving side a day later, especially between banks, and that is fine. The memo field is worth filling in with a short reason, such as "cover March payroll", because it will help whoever reviews the books later.
Make the transfer before you import the files if you know about it, or as soon as you spot the first line during review. Either way, it has to exist before you can match to it.
Matching the transfer in each Desktop account's import
Matching links a downloaded line to a transaction already in the register. For a transfer, you match twice: the money-out line in the source account and the money-in line in the receiving account, both to the one Transfer Funds entry. Each register then shows the transfer as matched, and nothing is added.
A step list for one example transfer
This example moves 2,000.00 from savings to checking on March 12. The account names and amounts are examples.
- In Banking > Transfer Funds, record 2,000.00 from "Business Savings (9032)" to "Business Checking (4417)", dated March 12.
- Import the savings file with File > Utilities > Import > Web Connect Files, linked to the savings account.
- In the Bank Feeds Center, find the -2,000.00 line and confirm the match QuickBooks offers to the transfer.
- Import the checking file, linked to the checking account.
- Find the 2,000.00 deposit line and confirm its match to the same transfer.
- Open both registers and check that the transfer appears once in each, marked as matched.
If QuickBooks does not offer a match, check that the amount is identical and the dates are within a few days. Do not delete a downloaded line to get rid of a duplicate. The Intuit guide to downloading bank feed transactions in QuickBooks Desktop says deleted downloaded transactions cannot be downloaded again. Delete your own copy instead.
When one of the accounts only gives you PDF statements, importing PDF bank statements into QuickBooks Desktop explains how to turn them into a QBO file first. SimpleBankConvert is being built to do that conversion for you, so a statement-only account can be matched like any other.
What if only one side of the transfer is in Desktop?
When the other account is not in QuickBooks Desktop, such as a personal account or an account you have not set up yet, there is no second register to transfer into. Record the line against the account that describes the money instead: owner contributions for money in from a personal account, owner draws for money out to one.
If the other account is a business account that simply has not been added yet, add it to the chart of accounts with its opening balance and record the transfer properly. Leaving it as equity "for now" tends to become permanent. Some people hold off on adding an account because they are wary of a live bank connection. Web Connect files do not need one, and whether it is safe to connect your bank to QuickBooks covers the choice if you are weighing it up.
Desktop transfers confused with loan and payroll payments
Some outgoing lines look like transfers because they move money to an account with your name on it, but they are not simple transfers. A loan payment splits into interest, which is an expense, and principal, which reduces the loan. A payroll funding line pays wages and taxes, which are costs.
Treat a line as a plain transfer only when the full amount lands, unchanged, in another asset account you own. A payment to a business loan is better entered as a check or a split against the loan and interest accounts, as shown in importing loan payments into QuickBooks Desktop. A transfer to a payroll account is a transfer, but the wages paid from that account are not, which importing payroll transactions into QuickBooks Desktop works through line by line.