> ## Documentation Index
> Fetch the complete documentation index at: https://help.agatabo.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Bank Transfers

> Move money between your organization's bank accounts using manual journal entries

## Overview

**Bank transfers** move money from one of your organization's bank accounts to another. In Agatabo, transfers between your own bank accounts are accomplished using **manual journal entries**, not through a dedicated transfer button.

<Note>
  **Internal transfers only**: This is for transfers between YOUR bank accounts. For external transfers (to members, suppliers, etc.), use the appropriate transaction type (loan disbursement, expense, dividend, etc.).
</Note>

## When to Transfer Between Accounts

Common scenarios:

* Moving excess funds to a savings account for reserves
* Transferring money from savings to current account for loan disbursements
* Rebalancing cash between accounts
* Setting aside funds for specific purposes
* Consolidating cash into one account

## How Bank Transfers Work

Since Agatabo does not have a dedicated "Transfer" feature, you accomplish transfers by creating **balanced manual journal entries** that move money between CASH ledger accounts.

### The Accounting Behind Transfers

**Journal Entry Structure**:

```
Dr CASH (Destination Account)    Amount
   Cr CASH (Source Account)      Amount
```

**What happens**:

1. Source account balance decreases (credited)
2. Destination account balance increases (debited)
3. Total cash remains unchanged (money moved, not gained or lost)
4. Transaction appears in both accounts' history

## How to Transfer Money

<Steps>
  <Step title="Navigate to Manual Journal Entries">
    General Ledger → Manual Journal Entries → Create Manual Entry
  </Step>

  <Step title="Set transaction date">
    Choose the date for the transfer
  </Step>

  <Step title="Add description">
    Example: "Transfer from Operations to Savings Account"
  </Step>

  <Step title="Add DEBIT line (Destination)">
    * Role: CASH
    * Bank Account: Select destination account
    * Amount: Transfer amount
  </Step>

  <Step title="Add CREDIT line (Source)">
    * Role: CASH
    * Bank Account: Select source account
    * Amount: Same transfer amount
  </Step>

  <Step title="Verify entry is balanced">
    Total debits must equal total credits
  </Step>

  <Step title="Submit">
    Click "Create Manual Entry"
  </Step>
</Steps>

### Example: Transfer 1,000,000 RWF

**Scenario**: Move 1,000,000 RWF from "Operations Account" to "Reserve Fund"

**Manual Journal Entry**:

```
Date: 2026-06-11
Description: Transfer to reserves

Dr CASH (Reserve Fund)           1,000,000
   Cr CASH (Operations Account)  1,000,000

Total Debits: 1,000,000 = Total Credits: 1,000,000 ✅
```

**Balance Changes**:

```
Operations Account:
Before: 5,000,000 RWF
After:  4,000,000 RWF (decreased)

Reserve Fund:
Before: 2,000,000 RWF
After:  3,000,000 RWF (increased)

Total Cash: Unchanged (7,000,000 RWF)
```

## Important Rules

### Entry Must Be Balanced

**Valid Transfer**:

```
Dr CASH (Account A)  500,000
   Cr CASH (Account B)  500,000
✅ Balanced
```

**Invalid Transfer**:

```
Dr CASH (Account A)  500,000
   Cr CASH (Account B)  300,000
❌ Unbalanced - will be rejected
```

### Cannot Exceed Source Balance

You cannot transfer more money than is available in the source account.

**Example**:

```
Operations Account Balance: 1,000,000 RWF

Attempt to transfer 1,500,000 RWF:
❌ Will create negative balance - rejected by system
```

### Must Use CASH Role

Both ledger lines must use the **CASH** role to represent bank account balances.

**Correct**:

```
Dr CASH (Account A)
   Cr CASH (Account B)
✅ Both lines use CASH role
```

**Incorrect**:

```
Dr CASH (Account A)
   Cr SAVINGS (Member Account)
❌ This is not a bank transfer - this is a savings withdrawal
```

## Verification After Transfer

After creating the manual entry, verify the transfer:

<Steps>
  <Step title="Check source account balance">
    Navigate to Bank Accounts → Source Account
    Verify balance decreased by transfer amount
  </Step>

  <Step title="Check destination account balance">
    Navigate to Bank Accounts → Destination Account
    Verify balance increased by transfer amount
  </Step>

  <Step title="View journal entry">
    General Ledger → View Journal Entries
    Find your manual entry and verify it's posted
  </Step>

  <Step title="Check both account histories">
    Each account should show the transfer transaction
  </Step>
</Steps>

## Common Transfer Scenarios

### Scenario 1: Moving to Savings for Reserves

**Purpose**: Set aside 2,000,000 RWF for emergency reserves

**Entry**:

```
Description: Transfer to emergency reserve fund

Dr CASH (Reserve Savings Account)    2,000,000
   Cr CASH (Operations Current Account)  2,000,000
```

### Scenario 2: Funding Loan Disbursement Account

**Purpose**: Move 5,000,000 RWF to dedicated loan account before disbursing loans

**Entry**:

```
Description: Fund loan disbursement account for June loans

Dr CASH (Loan Disbursement Account)  5,000,000
   Cr CASH (Operations Account)      5,000,000
```

### Scenario 3: Consolidating Accounts

**Purpose**: Close old account by moving all funds to new account

**Entry**:

```
Description: Consolidate to new Equity Bank account

Dr CASH (New Equity Account)     3,456,789
   Cr CASH (Old BK Account)      3,456,789
```

**After transfer**: Old account has 0 balance and can be inactivated

## Alternative: Reserve Allocations

If you're transferring to set aside reserves, consider using **Reserve Allocations** instead:

**Advantages**:

* Dedicated feature for reserve management
* Tracks reserve purposes (emergency, loan loss, etc.)
* Prevents accidental use of reserved funds
* Better reporting for reserve balances

**When to use**:

* Setting aside emergency funds
* Loan loss provisions
* Dividend reserves
* Statutory reserves

[Learn more about reserves →](/tontines/reserves/overview)

## Reversing a Transfer

If you made a transfer by mistake, you can reverse it using another manual journal entry:

<Steps>
  <Step title="Create reversal entry">
    General Ledger → Manual Journal Entries
  </Step>

  <Step title="Reverse the debits and credits">
    Swap the debit and credit lines from original entry
  </Step>

  <Step title="Add clear description">
    Example: "Reversal of incorrect transfer from June 11"
  </Step>

  <Step title="Submit">
    Balances return to original state
  </Step>
</Steps>

**Example Reversal**:

```
Original Transfer:
Dr CASH (Account A)  1,000,000
   Cr CASH (Account B)  1,000,000

Reversal:
Dr CASH (Account B)  1,000,000
   Cr CASH (Account A)  1,000,000
```

## Best Practices

<Note>
  **Transfer tips:**

  * Always add clear, descriptive notes to manual entries
  * Verify source account has sufficient balance before creating entry
  * Double-check you selected correct source and destination accounts
  * Verify entry is balanced (debits = credits)
  * Check both account balances after posting to confirm
  * Document reason for transfer in description
  * Use reserve allocations for reserve-related transfers
  * Create transfer entries on the actual date of transfer (don't backdate)
  * Keep transfer entries separate from other manual adjustments
</Note>

## Permissions Required

| Action                      | Permission      | Scope |
| --------------------------- | --------------- | ----- |
| Create manual journal entry | `ledger:write`  | ANY   |
| View journal entries        | `ledger:read`   | ANY   |
| View bank account balances  | `accounts:read` | ANY   |

<Warning>
  **Accountant/Administrator only**: Creating manual journal entries requires advanced accounting knowledge. Incorrect entries can corrupt your financial records. Only users with proper training should create manual entries.
</Warning>

## Related Operations

<CardGroup cols={2}>
  <Card title="Manual Journal Entries" icon="pen-to-square" href="/tontines/general-ledger/manual-journal-entries">
    Learn how to create manual entries
  </Card>

  <Card title="Bank Accounts Overview" icon="building-columns" href="/tontines/bank-accounts/overview">
    Understand bank account management
  </Card>

  <Card title="Reserve Allocations" icon="piggy-bank" href="/tontines/reserves/reserve-allocations">
    Alternative for setting aside reserves
  </Card>

  <Card title="Understanding Double-Entry" icon="scale-balanced" href="/tontines/general-ledger/understanding-double-entry">
    Learn accounting principles
  </Card>
</CardGroup>