When making transfers to non-bank accounts, which method is commonly used?

Using checks or journal entries is the common method for making transfers to non-bank accounts. This approach allows for proper documentation and tracking of transactions, ensuring that both accounts involved in the transfer reflect the changes accurately in the financial records. Checks provide a tangible form of payment that can be used for various types of transactions, while journal entries allow for internal record-keeping, facilitating the adjustment of accounts without the need for an actual cash exchange.

Substituting physical cash is less practical for non-bank transfers, as it lacks traceability and may not be feasible depending on the transaction type. Direct deposits and online bill pay tend to be more restricted to bank accounts, making them unsuitable for non-bank account transactions. Therefore, checks and journal entries become the preferred methods for these scenarios, providing the necessary flexibility and accountability in financial management.