Virtual financial accounts are commonly used in accounting for tracking funds. For example, you may have a financial account designated for payroll or petty cash. They do not match an actual bank financial account, but can be used to track separately a variety of expenses or incomes.
There is no limit to the number of financial accounts you can create in ISP. Each financial account is associated with a filer. If you have just one filer in your account, then all of them are associated with that filer. All transactions in your financial accounts will pull to reports based on the filer associated with that financial account. As far as compliance accounting goes, it does not matter where your transactions are. This allows for flexibility in tracking finances via virtual financial accounts.
How do I move funds between financial accounts?
To indicate money moving from a financial account representing an actual bank account and a virtual account, use the Internal Transfer transaction type.
- Navigate to Accounting and select Add Transaction.
- Select Internal Transfer transaction type.
- Set the To and From Accounts. This will tell the system what account to pull funds from and where to put it.
Once created, you will see two Internal Transfer transactions. One will be negative in the financial account money is pulled from, and the other will be positive in the financial account the money is put. Neither will appear on a compliance report and is purely internal. They do, however, pull to Bank reconciliations and other internal financial reports for accounting.