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I want to categorize transfers yet still acknowledge the transfer between accounts

I would prefer to have transfers categorized rather than being only a transfer. As-is, I entered a payee which denotes the purpose of the transfer (particularly from checking to saving) then must enter a category of the account.



My desired process is to enter the account into payee, allowing for a category to be used denoting the purpose (such as emergency fund or vacation fund). This would be beneficial for payments to credit card to be categorized as payments, without losing the link of a transfer. This, I can include the categories in a budget and accurately reflect the transactions in budgeting and reporting.



I realize this is not the current process, but I would like an option to alter. So, this could be a feature under preferences to allow both processes to be available according to user preference.
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Comments

  • UKRUKR SuperUser ✭✭✭✭✭
    edited December 2018

    I'm afraid you can't categorize transfers.

    How about using Tags to identify this transfer as a contribution to your "vacation fund".

    Or, take a closer look at Savings Goals. Read all about it in Quicken Help (press F1 from anywhere in Quicken).

  • kenneth mcnaykenneth mcnay Member ✭✭
    edited September 2017
    I'm aware that I can't. I know that is the current state of the software.



    I hate that. I want to categorize in order to properly develop and monitor the budget. The budget only addresses categories, and does not differentiate tags, thus tags won't resolve my desire.



    Also, savings goals is insufficient, as those are not included in budget planning and reporting.



    I want a new, different, process offered in the software which is available in user preference which permits the payee to be the account transfer link, and the category to be reported and monitored in the budget. That is a valuable option for an alternate method within the software.
  • SnowmanSnowman Member ✭✭✭✭
    edited December 2018

    On the contrary you can categorize transfers.  Make it a split transaction by adding the category that you want to use and then the amount.  This will result in an "unbalanced" transaction but that is ok in this instance.  For example if you are transferring $500 into a savings fund then make the transfer in Quicken like you would normally and save it.  Then edit it by making is a "split transaction" by adding the category(s) that  you want.  The sum of the categories must be the same as the transfer.

    I tried this out on a couple of transfers in my file and it worked just fine. 

  • kenneth mcnaykenneth mcnay Member ✭✭
    edited September 2017
    I might consider this. However, this topic is labelled as an Idea, not a problem or question. 

    I want a new feature developed for future software rather than a mitigation behavior to correct a fault. 
  • Tom YoungTom Young SuperUser ✭✭✭✭✭
    edited December 2018
    Sorry, despite what anyone says there's no way to make an entry for a "transfer" AND have that transfer ALSO show up as a "category".

    Quicken is, first and foremost an accounting program that follows the conventions of double entry accounting.  So $500 transferred from checking to savings can't also show up as a $500 against some category, too.  That's $500 of real money that somehow shows up in your accounting program as $1,000 of expenditures.

    If you understand how to use the budgeting and reporting processes within Quicken you certainly CAN budget for transfers and you can have these transfers show up as a form of "expense", (outflow), or "income", (inflow).  And, you can do this in such a way that all your Accounts within Quicken are properly stated.
  • mshigginsmshiggins SuperUser ✭✭✭✭✭
    edited September 2017
    Along with your categorized transfer, you would need to be able to exclude accounts from your budget or you would need to use different categories in your credit card account and exclude those categories from your budget. That seems more painful than using the as is transfer and budgeting features.
    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the  Quicken Windows FAQ list
  • Arctic Hare (H&B 2019 Canadian)Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭
    edited September 2017
    Snowman said:

    On the contrary you can categorize transfers.  Make it a split transaction by adding the category that you want to use and then the amount.  This will result in an "unbalanced" transaction but that is ok in this instance.  For example if you are transferring $500 into a savings fund then make the transfer in Quicken like you would normally and save it.  Then edit it by making is a "split transaction" by adding the category(s) that  you want.  The sum of the categories must be the same as the transfer.

    I tried this out on a couple of transfers in my file and it worked just fine. 

    Best practice is to only use categories for real inflows and outflows.
  • SnowmanSnowman Member ✭✭✭✭
    edited September 2017
    Tom Young said:

    Sorry, despite what anyone says there's no way to make an entry for a "transfer" AND have that transfer ALSO show up as a "category".

    Quicken is, first and foremost an accounting program that follows the conventions of double entry accounting.  So $500 transferred from checking to savings can't also show up as a $500 against some category, too.  That's $500 of real money that somehow shows up in your accounting program as $1,000 of expenditures.

    If you understand how to use the budgeting and reporting processes within Quicken you certainly CAN budget for transfers and you can have these transfers show up as a form of "expense", (outflow), or "income", (inflow).  And, you can do this in such a way that all your Accounts within Quicken are properly stated.

    It works just as I described.  You might want to try it before shooting it down.  By category if you mean an expense or income "category" in the budget you most certainly can.  I took one of my transfers, added the transfer amount to an expense category, ran the report and the transfer amount was shown as an expense for the category I put it in.

    I have no need of doing things this way but it CAN be done.  It is advisable to do so only it you really KNOW WHAT you are doing.  I had to do a variation of this to accurately track mortgage payments Interest and principle expense and it worked just fine for over 20 years until I paid everything off and no longer have any of that type of debt.

    Quicken in not a true "accounting" program.  If it where you would setup a mortgage as a long term liability.  Then you would "transfer" and amount equal to the principle owed in the current year to a short term liability account.  When you made a payment you would "expense" it to interest and principle expense.  One Jan 1 you would transfer and amount equal to the next years payments to short term liabilities and start over.

  • Arctic Hare (H&B 2019 Canadian)Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭
    edited September 2017
    Tom Young said:

    Sorry, despite what anyone says there's no way to make an entry for a "transfer" AND have that transfer ALSO show up as a "category".

    Quicken is, first and foremost an accounting program that follows the conventions of double entry accounting.  So $500 transferred from checking to savings can't also show up as a $500 against some category, too.  That's $500 of real money that somehow shows up in your accounting program as $1,000 of expenditures.

    If you understand how to use the budgeting and reporting processes within Quicken you certainly CAN budget for transfers and you can have these transfers show up as a form of "expense", (outflow), or "income", (inflow).  And, you can do this in such a way that all your Accounts within Quicken are properly stated.

    I accept that it can be done. Not everything that can be done, should be done. I recommend against categorizing inter-account transfers in Quicken. That's my opinion. No one is obligated to use the product according to my opinion.

  • Tom YoungTom Young SuperUser ✭✭✭✭✭
    edited January 2018
    Maybe I'm simply not understanding something here, but I tried to follow Snowman's method as follows:

    image
    The initial transfer entry.


    image

    The attempt to split.  Notice that Quicken balances the entry with that ($500) amount, to keep the entry balanced.  But I clicked on "OK".


    image

    The resulting Income/Expense report does show a $0 net effect of the transfer + split entry, but it does so only by creating an "income" called "Uncategorized".


    image

    I can "fix" that, of course, by simply eliminating the "Uncategorized" Category, but that results in an Income/Expense report that shows a $500 loss for the period, which is not the case.  Additionally, we know that the transfer + split transaction didn't affect the balance sheet; we started off with $5,000 in checking and ended up with $4,500 in checking and $500 in savings.  But the Income/Expense report "as modified" tells us we should have a net worth after the transfer + split transaction that's $500 less than before the transaction.


    Maybe I'm not doing it right.  If so, please illustrate the correct method that "balances the books". 
  • markus1957markus1957 SuperUser ✭✭✭✭✭
    edited January 2019
    From a budgeting perspective if you include the credit card accounts in the budget and categorize the credit card transactions you will have a proper budget. To the extent you are really trying to pay down a credit card account balance, that is a different story. In that case you may be better off using Quicken's tool to pay down debt and set your payment transfer to the amount needed to pay it down per your plan.
  • SnowmanSnowman Member ✭✭✭✭
    edited September 2017
    Snowman said:

    On the contrary you can categorize transfers.  Make it a split transaction by adding the category that you want to use and then the amount.  This will result in an "unbalanced" transaction but that is ok in this instance.  For example if you are transferring $500 into a savings fund then make the transfer in Quicken like you would normally and save it.  Then edit it by making is a "split transaction" by adding the category(s) that  you want.  The sum of the categories must be the same as the transfer.

    I tried this out on a couple of transfers in my file and it worked just fine. 

    However if you have budgeted for savings (as an expense) you need some way to account for transferring this money to the savings account.  This method works because you transfer $500 to savings but add the extra $500 to the savings expense category.  It is the only way you can satisfy the expense and still transfer the money.

  • Tom YoungTom Young SuperUser ✭✭✭✭✭
    edited September 2017
    Snowman said:

    On the contrary you can categorize transfers.  Make it a split transaction by adding the category that you want to use and then the amount.  This will result in an "unbalanced" transaction but that is ok in this instance.  For example if you are transferring $500 into a savings fund then make the transfer in Quicken like you would normally and save it.  Then edit it by making is a "split transaction" by adding the category(s) that  you want.  The sum of the categories must be the same as the transfer.

    I tried this out on a couple of transfers in my file and it worked just fine. 

    But, as I illustrate below, you can only use that additional Category because Quicken creates on offsetting phantom income to make the (double entry) accounting work.

    It's very easy to budget for transfers to a savings Account and very easy to customize your reporting such that the transfers show up as a form of "expense" in the budget report.  It happens automatically with no additional work on your part when you make such a transfer.
  • BillBill Member ✭✭
    edited December 2018
    I also wish I could do something like this. If I transfer money into a wife's or child's account I'd like to be able to categorize the purpose of that transfer. What does this group think about making two separate transactions instead of a transfer transaction? A debit transaction from the account I control could have the purpose categorized and the deposit into the account they control could just say cash, or vice versa? Still not perfect but would it suit the purpose?
  • SimonSezSoSimonSezSo Member ✭✭
    edited December 2018
    Snowman said:

    On the contrary you can categorize transfers.  Make it a split transaction by adding the category that you want to use and then the amount.  This will result in an "unbalanced" transaction but that is ok in this instance.  For example if you are transferring $500 into a savings fund then make the transfer in Quicken like you would normally and save it.  Then edit it by making is a "split transaction" by adding the category(s) that  you want.  The sum of the categories must be the same as the transfer.

    I tried this out on a couple of transfers in my file and it worked just fine. 

    Snowman and Tom, there is a simple way to get rid of the "unbalanced" condition.  Just simply transfer into the account itself  For example

    Account Name - Savings Account

    Split Transaction: (transfer to checking account)

    Category                       Memo                                   Amount
    [Checking Account]      Actual Transfer                     500.00
    Transfer to Checking    To "categorize" the Txfr       500.00
    [Savings Account]        Offset for the "unbalanced" -500.00

    By doing this, you have no "unbalanced" condition, and the [Savings Account] split is "invisible".  I used to do this all the time when I wanted to update an asset, but I needed to do a transfer at the same time as well.
  • SimonSezSoSimonSezSo Member ✭✭
    edited December 2018
    Bill how about this:

    This is a transfer from checking to savings, 



    When you make a transfer into the account itself (in this case, checking to checking), it is "invisible"  and won't show on any report.
  • SimonSezSoSimonSezSo Member ✭✭
    edited December 2018
    You can also use Tags with transfers.  It simply gives another level of categorization.  Which might be easier, if you don't mind using Tags.
  • BillBill Member ✭✭
    edited December 2018
    Hi Simon. I saw your post above and I think this will do the job for me. I had done somehting like this before, but not for a transfer. When I cashed a check for someone I had a three entry split. But I just used Cash as the third entry. I like the idea of the transfer back into the same account to make it invisible. Thanks.
  • Arctic Hare (H&B 2019 Canadian)Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭
    edited December 2018
    Bill said:

    Hi Simon. I saw your post above and I think this will do the job for me. I had done somehting like this before, but not for a transfer. When I cashed a check for someone I had a three entry split. But I just used Cash as the third entry. I like the idea of the transfer back into the same account to make it invisible. Thanks.

    @Bill: use the proposed method with caution. It is a bad accounting practice because it is essentially "printing" money. The negative $50 entry is like receiving cash from a third party and using that receipt from a third party to fund the Gift Given $50; but you didn't actually receive any cash here. In small amounts this might not cause a material issue, but if done in larger amounts the money "printing" could distort the view of your finances. Put another way, using this construct, you manage to give the same $50 bill to two different people at the same time. It is not a good accounting practice, so use with caution. Just because something can be done, doesn't mean it should be done.
  • BillBill Member ✭✭
    edited December 2018
    Bill said:

    Hi Simon. I saw your post above and I think this will do the job for me. I had done somehting like this before, but not for a transfer. When I cashed a check for someone I had a three entry split. But I just used Cash as the third entry. I like the idea of the transfer back into the same account to make it invisible. Thanks.

    Hi Hare. When I first read your comment I was afraid that if I did it like Simon suggested that it would affect my net worth. I wouldn't like that. But I tried a single test and the net worth did not change at all. Not that I doubt you, but if this is printing money, then where is that money showing up in Quicken or what would it affect?

    This is happening because I am lending money for a particular purpose to a family member whose account I keep track of in Quicken because it is part of the family assets. This loan should be paid back and when it is I would do a transfer the opposite direction. Then at any time I can get a report on the loan category and see how much is outstanding. With a simple transfer I can't do that partly because some times the transfer is not a loan.

    When I've lent money to a friend before, I didn't have this problem because I was not keeping track of my friend's account in Quicken. So it was shown as a withdrawal from my account and I was able to assign a category. But I realized that while the loan was outstanding, my net work was showing lower than it should, since I expected to get paid back and so I considered that promise to repay an asset. (It was repaid.)

    When I lent a more substantial amount to another friend, I set up a virtual account for him in my Quicken. It was Joe(not his real name)  Loan. To Keep track I transferred money in Quicken from my real account to his virtual account. So my net worth didn't go down when I lent him money and I could look in the virtual account to see how much he owed and after it was repaid the virtual account balance was zero and I could hide the account. And I could use that virtual account again if he needed to borrow again.

    It would be nice to have one method to keep track of all these possibilities. Can you think of one or suggest one? Someone mentioned tags but i never used that before and don't know if it will work or if it has limitations.

    I remember thinking before, but not the reason, that it would be nice if there could be multiple categories assigned to some transactions. But I guess that's another topic so I won't confuse the issue any further.

    Thanks, Bill
  • SimonSezSoSimonSezSo Member ✭✭
    edited December 2018
    Bill said:

    Hi Simon. I saw your post above and I think this will do the job for me. I had done somehting like this before, but not for a transfer. When I cashed a check for someone I had a three entry split. But I just used Cash as the third entry. I like the idea of the transfer back into the same account to make it invisible. Thanks.

    Artic Hare, I used that method I described to Bill, for a very long time, and it hasn't caused any issues. My reason was a little different, but the concept is the same.  I need to do a transfer that both recorded purchase (let's say "Auto Purchase") and updated an asset account ("Car Value").  If I left it at that, the amount would be doubled, so I had another split item for the offset.  Using my method, I can create one transaction without manually creating a separate transaction.  It never affected my net worth or anything else.
  • Tom YoungTom Young SuperUser ✭✭✭✭✭
    edited December 2018
    Bill said:

    Hi Simon. I saw your post above and I think this will do the job for me. I had done somehting like this before, but not for a transfer. When I cashed a check for someone I had a three entry split. But I just used Cash as the third entry. I like the idea of the transfer back into the same account to make it invisible. Thanks.

    "Hi Hare. When I first read your comment I was afraid that if I did it like Simon suggested that it would affect my net worth. I wouldn't like that. But I tried a single test and the net worth did not change at all. Not that I doubt you, but if this is printing money, then where is that money showing up in Quicken or what would it affect?"

    If you go up and look at my post with lots of pictures of the entries you'll see the answer. Quicken is a double entry system and simply creates an offsetting form of income called "Uncategorized. "

    "This is happening because I am lending money for a particular purpose to a family member whose account I keep track of in Quicken because it is part of the family assets. "

    You can keep track of this inter-family loan without using a "category", in various ways. One way would be to create a new Account in Quicken into which "loan disbursements" go and out of which "loan repayments" are made. This has the advantage of making the loan balance always visible to you without needing to run a report. It has the disadvantage of making Account reconciliation more difficult but depending on the volume of activity in the two Accounts the extra work could be trivial. Another way of keeping loan activity isolated from other transfers would be to use the Payee/Description field and use a unique Payee/Description for loan disbursements/receipts and periodically run a report on that Payee.


    "When I've lent money to a friend before, I didn't have this problem because I was not keeping track of my friend's account in Quicken. So it was shown as a wit hdrawal from my account and I was able to assign a category. But I realized that while the loan was outstanding, my net work was showing lower than it should, since I expected to get paid back and so I considered that promise to repay an asset. (It was repaid.)"


    You don't use Categories (income and expenses) to track loans, you use Accounts.
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited December 2018
    Bill said:

    I also wish I could do something like this. If I transfer money into a wife's or child's account I'd like to be able to categorize the purpose of that transfer. What does this group think about making two separate transactions instead of a transfer transaction? A debit transaction from the account I control could have the purpose categorized and the deposit into the account they control could just say cash, or vice versa? Still not perfect but would it suit the purpose?

    Bill,
    If you move your wallet from your left rear pocket to your right rear pocket, would you want a Category for that transaction?  Because that's all that a Transfer does ... you're neither richer nor poorer after that transfer.

    Transfers move money between accounts.  Categories make your richer (income) or poorer (expenses).

    To track your "purposes" use either the Tag or the Memo field of the transaction.  That's what they were created for.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Arctic Hare (H&B 2019 Canadian)Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭
    edited December 2018
    Bill said:

    Hi Simon. I saw your post above and I think this will do the job for me. I had done somehting like this before, but not for a transfer. When I cashed a check for someone I had a three entry split. But I just used Cash as the third entry. I like the idea of the transfer back into the same account to make it invisible. Thanks.

    @Bill: You are correct that you won't see the issue in your net worth, but the proposed transaction will allow you to have the same $50 show up as being "spent" as a gift and then show up again in another category. In your case, the $50 that was spent a s gift could then be re-spent in another category from the account that received the $50 transfer. The same $50 shouldn't be able to be "spent" twice. Simply put, categories should only be used for payments to and receipts from a third party, i.e. outside of your defined Quicken environment; however, you've drawn that boundary. When you are shifting money within the same Quicken environment, then you could use tags to keep track of pockets, if you will. 
  • BillBill Member ✭✭
    edited December 2018
    Bill said:

    I also wish I could do something like this. If I transfer money into a wife's or child's account I'd like to be able to categorize the purpose of that transfer. What does this group think about making two separate transactions instead of a transfer transaction? A debit transaction from the account I control could have the purpose categorized and the deposit into the account they control could just say cash, or vice versa? Still not perfect but would it suit the purpose?

    Hi NotACPA. I had been using the memo field just to keep track but it's not ideal as it's hard to get a report and therefore a total. I started experimenting with tags last night. So far that is working but I'm not happy that tags are not as flexible as categories in that I can't have sub-tags. Not a major problem but if I lend for multiple purposes I have to select multiple tags to get a report. At least I can still subtotal by tag.
  • BillBill Member ✭✭
    edited December 2018
    Bill said:

    Hi Simon. I saw your post above and I think this will do the job for me. I had done somehting like this before, but not for a transfer. When I cashed a check for someone I had a three entry split. But I just used Cash as the third entry. I like the idea of the transfer back into the same account to make it invisible. Thanks.

    Tom, If I had thought of it for the first friend, I would have used an account for him too. I only thought of it later when I noticed my net worth dropped after a loan to my second friend. But I don't think it works when it's my family member whose account is also being tracked in the same Quicken file. The loan account would correctly show the amount still owed but the real account in the bank would show less than that actual amount and probably in this case also show a negative amount. So I wouldn't be able to reconcile.

    I don't mind some extra work to keep track of things as much as I mind something not matching the bank statement.

    Would a savings goal work for this? I never used that before so it may be a dumb question. A savings goal as I understand it sets aside some money for some goal like a vacation. Could my goal be the return of my loan or the amount loaned? Is a savings goal tied to a particular bank account or independent of the real accounts? When I reconcile do I see the true amount?
  • BillBill Member ✭✭
    edited December 2018
    Bill said:

    Hi Simon. I saw your post above and I think this will do the job for me. I had done somehting like this before, but not for a transfer. When I cashed a check for someone I had a three entry split. But I just used Cash as the third entry. I like the idea of the transfer back into the same account to make it invisible. Thanks.

    I tried it with tags and it's worked out nicely. Any transfer from the account under my control to the account under her control will have a tag for its purpose.

    One thing I noticed is that the tag carries over to the other account. so if I do a report for all instances of that tag, it balances out to zero. I have to specify to report from the one recipient account only.

    For me, problem solved. And thanks for the introduction to tags.
  • TJ102TJ102 Member ✭✭✭✭
    edited April 2019
    When you do a Category transaction transfer you end up with an outgoing with a matching ingoing line item in the register. Then when I spend the money or whatever is done with it you will have outgoing line item that will be categorized. What I do for all 3 transaction is create in memo a note (MF042019) MF designating a money function,  then the other numbers represent the date. That same number is then in Memo, and at any time you can do a Find/Repl or a Search using that number MF...... to see the account the money was transferred from, to, then what the money was used for. You can also use that number for reports. The other option is to add that MF# as a tag.
  • juttonnjuttonn Member ✭✭
    Great discussion. I use quicken 2017 Rental Property Manager to keep track of my personal finances, my business finances (that is, an LLC that my wife and I own), and my rental properties. With some of the transfers that I want treated as expenses and income, I do split them up as two separate entries. That is, I am leasing my car that I own personally to my business. To make payments, I transfer $ from my business account to my personal account. This is an actual business expense, and personal income. So, I duplicate the transaction in one account, then re-categorize the copied transaction. Then I go to the other account and re-categorize that transaction.

    Re-categorizing a transfer transaction deletes the transaction in the other account, so that is why I first duplicate the transaction. Re-categorizing the matching transaction then deletes the duplicate entry. I would still kind of like to see that the $ went from one account to the other, but I guess I could add that to the memo, or create a tag. Does this seem to make sense to those that know more than I?

    I did just switch the option in preferences so that Quicken will now as me before linking transfers, so that I can choose not to have these transfers set up as such in the first place. That will make the categorizing easier (and also prevent the random matching expenditures that link as transfers that aren't really transfers). On a side (but related) note, is there a way to un-link a transfer? That is, take a linked transfer and re-categorize it without that action deleting the matching entry in the other account? Thanks
  • q_lurkerq_lurker SuperUser ✭✭✭✭✭
    @juttonn
    • "On a side (but related) note, is there a way to un-link a transfer? That is, take a linked transfer and re-categorize it without that action deleting the matching entry in the other account? "
    No.  When you change the Category field from the transfer-account to an income or expense category, the transaction in the other account, has to go away.  

    The rigorous among us would likely tell you the LLC should have a separate file from your personal finances.  They are rigorously-speaking two distinct taxable entities and should normally be treated separately in Quicken.  If you have a way to make it work for you, more power to you, but you should expect it to be carry along these types of complications.  You might look at it as if you had a separate bookkeeper handling the LLC.  That person would not be recording transfers to and from your personal accounts.  

    HTH
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