Internal transfer accounts (was:Having 2 Descriptions Per Transaction)

[Geert Janssens]

On Friday 06 November 2015 22:13:54 Wm... wrote:
> Fri, 6 Nov 2015 11:05:58 <3925045.Kd771LdALL at legolas.kobaltwit.lan>
> Geert Janssens <geert.gnucash at kobaltwit.be> wrote...
> 
> [snip]
> 
> >Another possibility would be to work with an intermediate account.
> >That's what most accounting packages here in Belgium do as well. That
> >means, when you import your checking account, set the savings
> >transactions to go to an intermediate account, named say "Internal
> >transfer". The transaction description can remain "to Savings". Then
> >when you import your savings account, set your checking transactions
> >to go to that transfer account as well, and keep the description as
> >"from Checking". In the end the transfer's account balance should
> >always be 0.>
> >  This last option has an advantage as well that it handles date
> >
> >differences between your own bank accounts. For accounts with the
> >same bank the transaction normally affects both accounts on the same
> >day, but if you have accounts in different banks a transfer can take
> >one or more business days.
> 
> Is this an acknowledged way of doing things in computerised accounting
> in Belgium generally?  I mean do auditors look at books that include
> an Internal Transfer Account and understand what it is there for?
> 
Yes. I have kept books for various firms here in several accounting commercial/non-free 
applications over the years, and they all did the same thing.

> Is it usually an Asset / Liability account with a specific use (e.g.
> interbank transfers) or a more general Equity account that balances to
> zero most of the time in practical use?
> 
I *think* it's an Asset/Liability account, though I never referred to it using these terms. 
Belgium's official chart of accounts is heavily based on account numbers so I'm more used 
to the number associated to it.

The number for the Internal Transfer account is 580000. Numbers starting with 5 here are 
for cash, bank accounts, and things like that. Which I understand are Asset/Liability 
accounts.

> Regular use of Suspense accounts (of which your Internal Transfer
> Account is an example) seem to be frowned on these days [1] in spite
> of providing very real solutions to every day accounting problems
> like "where was the money between two bank accounts over the
> weekend".
> 
> [1] that may just be because they have been abused in the past for
> hiding things rather than accounting for them.

Well, clearly not in Belgium so far :)

Thanks for your input however. It helps me to evaluate my habits in a global scope.

Regards,

Geert