GoDaddy Bookkeeping uses the "Transfer In" and “Transfer Out” categories to represent non-business transactions that do not affect your Profit & Loss. The most common examples are transferring money between your PayPal account and your bank account. While this won’t affect your business P&L, you still want to keep track of these transactions.
You'll want to use the "Transfer" category in GoDaddy Bookkeeping in the following situations:
- To record currency conversions. Read more about currency conversions here.
- To record amounts transferred between bank accounts (such as checking to savings, savings to checking, bank to PayPal, PayPal to bank, etc.)
- To show amounts related to loans; both the initial loan amount and payments; remember to record any interest you pay as an "interest expense," or interest you collect as "interest income."
There are a couple other Non-Business categories that will keep a transaction from affecting your Profit & Loss:
- Credit Card Payment - to record a payment from your bank account for a credit card bill (make sure the expenses themselves are categorized correctly), GoDaddy Bookkeeping makes sure that this doesn't get counted twice.
- Personal Expense + Personal Income - to show items / transactions meant to be left out of your business accounting.
- Owner Contribution/Draw - Owner's transactions affect your equity, not your revenue or expense accounts. Therefore, these transactions do not affect your Profit/Loss.
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