How to Categorize Transfers to BNY Mellon | Pershing and Northwestern Mutual Accounts?
I’m working with a client who frequently moves funds from their business checking account to two specific accounts:
- BNY Mellon | Pershing
- Northwestern Mutual | Financial Planning & Life Insurance Company
I’m looking for guidance on how to categorize these transfers for Accounting purposes. Should they be classified as “Legal and Professional Services,” or do they belong in another category?
To give you some context, the client hasn’t shared detailed information about the purpose of these transfers, but I believe they may relate to investments, financial planning, or insurance.
I would appreciate any insights or recommendations on how to accurately categorize these transactions.
Thank you in advance for your help!
One response
When categorizing transfers to BNY Mellon | Pershing and Northwestern Mutual accounts, it’s important to consider the purpose and nature of the transfers. Based on your brief description, here’s how you might approach the categorization:
BNY Mellon | Pershing: If the transfers are related to investment activities (like funding brokerage accounts for stock purchases, bonds, etc.), they could be categorized under “Investment Expenses” or “Investment Management Fees.” If they are more about setting aside reserves or savings, you might categorize them as “Capital Contributions” or simply “Transfers to Investment Accounts.”
Northwestern Mutual: If the transfers are primarily for life insurance premiums, financial planning services, or related expenses, you could categorize them under “Insurance Expenses” or “Financial Services.”
Given that you suspect these transfers are related to financial planning and insurance, using terms like “Investment Contributions” or “Insurance and Financial Services” could provide clarity and relevance, separating them from general legal or professional service costs.
Ultimately, if you can, it would be best to discuss with your client to clarify the purpose of these transfers for a more accurate categorization. Otherwise, using more specific categories reflecting the nature of these accounts can help maintain clearer financial records.