Banking Transactions

Recording and managing your bank activity

Banking transactions are the individual activities that affect your bank accounts, such as deposits, withdrawals, transfers, and bank fees. Properly recording these transactions is essential for accurate financial management.

Types of Banking Transactions

Deposits

Money coming into your bank account. For a tailoring business, this typically includes:

  • Customer payments for services
  • Sales of fabric or accessories
  • Refunds from suppliers
  • Loan proceeds
  • Owner contributions

Withdrawals/Payments

Money going out of your bank account. Common examples include:

  • Supplier payments for fabric and materials
  • Rent for your shop space
  • Utility bills (electricity, water, internet)
  • Employee wages
  • Equipment purchases

Transfers

Moving money between your own accounts. Examples include:

  • Moving funds from checking to savings
  • Transferring money to a payroll account
  • Moving funds to a tax reserve account
  • Transferring between currencies

Bank Fees and Interest

Charges from the bank or interest earned:

  • Monthly account maintenance fees
  • Transaction fees
  • Overdraft charges
  • Interest earned on savings
  • Credit card processing fees

Recording Banking Transactions

Recording a Deposit

  1. Go to Finance > Banking > Transactions
  2. Click "Add Transaction"
  3. Select "Deposit" as the transaction type
  4. Select the bank account receiving the funds
  5. Enter the date of the deposit
  6. Enter the amount being deposited
  7. Select the appropriate income account (e.g., Custom Tailoring Revenue)
  8. Add a description (e.g., "Payment from Ahmed for wedding suit")
  9. Add a reference number if applicable (e.g., invoice number)
  10. Click "Save Transaction"

Recording a Payment

  1. Go to Finance > Banking > Transactions
  2. Click "Add Transaction"
  3. Select "Payment" as the transaction type
  4. Select the bank account the payment is coming from
  5. Enter the date of the payment
  6. Enter the amount being paid
  7. Select the appropriate expense account (e.g., Fabric Costs)
  8. Add a description (e.g., "Premium silk for Fatima's dress")
  9. Add a reference number if applicable (e.g., supplier invoice number)
  10. Click "Save Transaction"

Recording a Transfer

  1. Go to Finance > Banking > Transactions
  2. Click "Add Transaction"
  3. Select "Transfer" as the transaction type
  4. Select the "From" account (where the money is coming from)
  5. Select the "To" account (where the money is going)
  6. Enter the date of the transfer
  7. Enter the amount being transferred
  8. Add a description (e.g., "Moving funds to savings for tax payment")
  9. Click "Save Transaction"

Managing Banking Transactions

Viewing Transactions

You can view all transactions for a specific account or across all accounts:

  • All Transactions: Go to Finance > Banking > Transactions
  • Account-Specific: Go to Finance > Banking, then click on an account name

You can filter transactions by:

  • Date range
  • Transaction type (deposit, payment, transfer)
  • Amount range
  • Description or reference number
  • Reconciliation status (reconciled or unreconciled)

Editing Transactions

  1. Find the transaction in the transactions list
  2. Click the "Edit" button (pencil icon)
  3. Make the necessary changes
  4. Click "Save Changes"

Important Note on Editing

Be cautious when editing transactions that have already been reconciled. Changing reconciled transactions can cause discrepancies in your accounting. If you must change a reconciled transaction, you may need to redo the reconciliation.

Deleting Transactions

  1. Find the transaction in the transactions list
  2. Click the "More Options" button (three dots)
  3. Select "Delete Transaction"
  4. Confirm the deletion

When to Delete vs. Void

Only delete transactions that were entered in error and never actually occurred. For transactions that did occur but need to be reversed (like a bounced check), use the "Void" option instead, which maintains a record of the original transaction and its reversal.

Best Practices for Banking Transactions

  • Record Promptly: Enter transactions as soon as they occur to maintain up-to-date records.
  • Be Detailed: Include specific descriptions and reference numbers to make tracking and reconciliation easier.
  • Categorize Correctly: Assign the proper income or expense accounts to ensure accurate financial reporting.
  • Attach Documentation: When possible, attach digital copies of receipts, invoices, or other supporting documents.
  • Regular Review: Periodically review your transactions to catch any errors or unusual activity.

Real-World Example

"Mohammed runs a tailoring shop specializing in traditional clothing. Every Monday, he deposits the previous week's cash payments into his business checking account. In the Finance Module, he records this as a deposit to his checking account, categorized as 'Custom Tailoring Revenue' with a description like 'Week of May 15 cash sales.' When he purchases new fabric, he pays with his business debit card and immediately records the payment in the system, selecting 'Fabric Costs' as the expense category and noting the specific fabrics purchased and their intended use. At the end of each month, he transfers 20% of his profits to a savings account for taxes, recording it as a transfer between accounts with the description 'Monthly tax reserve.' This disciplined approach to recording transactions gives him a clear picture of his cash flow and makes reconciliation straightforward."

ReconciliationTransactions