How to explain the transfer of funds between bank accounts in FreeAgent

This article describes how to explain bank transactions that relate to transfers to and from another bank account in FreeAgent. It also explains how to correct duplicate transactions.

Once both bank transactions have been imported into your FreeAgent account via a bank feed or uploaded from a bank statement, you will need to follow the steps below to explain the transfer of funds in FreeAgent. Please note that following these steps before both transactions have been imported into FreeAgent may result in transactions being duplicated.

You can add a new bank account if you need to, for example a savings account. If you need to manually add transactions related to a bank transfer, please see this article.

You’ll need to have level 6 access or above to your FreeAgent account to be able to explain bank transactions.

For information on explaining the transfer of funds to or from a bank account in a foreign currency, please see this article.

Explaining bank transfers

Navigate to the ‘Banking’ tab at the top of the screen and select ‘Bank Accounts’ from the drop-down menu.

Choose the bank account that the money is being transferred from.

Select the transaction that you would like to explain.

Select ‘Transfer to Another Account’ from the transaction ‘Type’ drop-down menu.

Select the relevant bank account that the funds are being transferred to using the ‘Bank Account’ drop-down menu.

Select ‘Explain Transaction’ to complete the process.

What happens next?

FreeAgent will record the transfer as equal ‘Money Out’ and ‘Money In’ transactions in your outgoing and receiving bank accounts.

If the corresponding ‘Money In’ bank transaction in the receiving bank account has already been imported into FreeAgent via a bank feed or bank statement upload, FreeAgent will automatically explain the bank transaction as a transfer from the outgoing bank account.

Correcting duplicate transactions

If the corresponding ‘Money In’ bank transaction in the receiving bank account has not yet been imported into FreeAgent via a bank feed or bank statement upload, FreeAgent will create a manual transaction in the receiving bank account.

When the corresponding ‘Money In’ bank transaction is then imported into FreeAgent, it may create a duplicate transaction for the transfer in the receiving bank account, which you’ll need to match with the existing manual transaction.

You'll be able to match transactions together as long as the duplicate transactions are recorded in FreeAgent within 14 days of each other. If there is a gap of more than 14 days, you will need to delete the uploaded transaction.

When you match these transactions together, the purple manual transaction and the red duplicate transaction will merge together into one green transaction, which will be linked to the other green transfer transaction in the original bank account.

If you have Guess enabled in one or both of the bank accounts, you may wish to edit the Guess rules so that only one of the bank accounts guesses transfers, which might also help avoid duplicates.