Transfer
A transfer moves money between two accounts owned by the same person or business, such as checking and savings, without creating any income or expense.
In short
Money moving between your own accounts, not in or out of the business. Moving $1,000 from checking to savings debits Savings and credits Checking — neither income nor expense, since nothing was earned or spent. Each connected bank account gets its own dedicated ledger code specifically so a transfer between them stays visible instead of netting to nothing.
Also called: account transfer, internal transfer
A transfer is money moving between two accounts owned by the same person or business — checking to savings, or a payment from checking that pays down a credit card balance. Nothing is earned and nothing is spent; value simply moves from one place it's held to another, which is why a transfer never touches an income or expense account.
Paying off a credit card is a common transfer that's easy to mistake for an expense: it's a credit to Checking and a debit to the card's liability balance, not a new cost. The spending already happened, and was already recorded, the moment the original charges posted to the card; paying the bill just moves money between two accounts and never touches the income statement again.
Every connected bank account gets its own dedicated code in the chart of accounts specifically to keep a transfer visible. If two of a user's own checking accounts shared one generic code, a transfer between them would debit and credit the same account for the same amount, netting to zero and vanishing from every report the moment it posted — with no way to remove it afterward, since the journal is append-only. Giving each account its own child code keeps that movement visible as an actual transfer instead.
A transfer between two of your own accounts is different from a refund, which is new money arriving from an external party reversing an earlier charge, and different from an owner's contribution or draw, which moves value across the boundary between the business and its owner rather than between two accounts the same entity holds.
What people get wrong
- Recording a transfer as income or an expense — nothing was earned or spent; value only moved between accounts already owned.
- Recording a credit-card payment as a new expense — the spending was already recorded when the original charges posted; paying the bill is a transfer.
- Assuming two accounts of the same type can safely share one ledger code — that's exactly what makes a transfer between them vanish from reports.
Common questions
- Is paying my credit card bill an expense?
- No — the expense was already recorded when the charges themselves posted. Paying the bill moves money between two accounts (checking down, card balance down) and doesn't touch the income statement again.
- Why does each bank account I connect get its own code instead of sharing one?
- So a transfer between two of your own accounts stays visible as an actual movement of money, rather than debiting and crediting the same code and disappearing from every report.
Machine-readable: /api/knowledge/concept:transfer