Reconciling Payments vs Lagging Bank Transactions

Andrew_BIT

I am trying to reconcile my account and I am looking for guidance on how to address time-delay issue I am experiencing.

The scenario is when I have a client pay for services on the last day of the month, i.e. 31st, the point of sales doesn't deposit those funds into my bank account until the next business day, i.e. 1st. If I want to reconcile my accounts for that month, my bank statement will not have the transaction to match the one on the 31st but rather it lags into the next month.

I wasn't too concerned about this until I hit my fiscal year end when I wanted to have everything accurately reflected. The way I approached this (which may or may not be correct) was to create a "Money in Transit" account, add a journal entry on the last day of the month for anything that doesn't post by then, and then at the beginning of the next month, have another journal entry which moves the money from "Money in Transit" into my banking account in waves.

This seems like a lot of work to do every month and I feel there might be a better option.

Can anyone provide some guidance or alternative approaches?

JulianP

Hey there @Andrew_BIT !

You will want to record your income the month it was deposited, not when your customer makes the payment. So if your funds land at the beginning of the following month, you will want them to be recorded like this in Wave. This should match your bank statement as your statement will reflect when the funds actually landed in your account, not when you customer made the payment. For instance, if you are recording your invoice payments/ income transactions manually, they should be recorded the day they land. I hope this helps and if I missed the mark, please don't hesitate to reach back out. I'll gladly assist you further.