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 of 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.