How do I account for transfers between checking and savings?
Cherapple
Member Posts: 8
I have both checking and savings accounts for my business. The system automatically accounts for transfers as "income" on one side and "expense" on another, which isn't accurate.
If I send a portion of my income to my business savings account, how do I account for the transfer there and back again (when I later want to use the money)?
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That's actually how it should show up on the transactions page, @Cherapple.
Are you worried about them showing up as income and expenses in your reports? If you are, they won't. The transfer category isn't actually income/expense.
Thanks for your response, @Orion Renell
Where does it say it's a transfer? They import from my bank as "uncategorized" expenses and income. I don't want to leave anything without a category.
Oh! You have to categorize that yourself. There's an article on the help center about it... just a second... there: https://support.waveapps.com/hc/en-us/articles/208621616-How-to-create-a-transfer-between-two-accounts-e-g-categorize-a-credit-card-payment-
Thank you, @Orion Renell! That's exactly what I was looking for.
You are very welcome, @Cherapple!
I say when you get the chance to make this whole thing a little less stressful for someone, you gotta jump on it
One more question, @Orion Renell, if you can. I cleared all those transfers in my accounting. (I love the little dopamine hit every time you hit "verified" on a transaction.
)
But I have one left.
How do I document a transfer from an old savings account that I've closed out to a new one? Since the account has to be different, but it's from savings to savings?
I'm here @Cherapple! Sorry about the delay, it's been a busy few weeks!
I think you'd have to create that account in your Chart of Accounts, create an income transaction to set a starting balance and then transfer all of that into your current savings account. I think that's how I would do it, anyway. Or if it's from a personal account, just make it an income to your savings categorized to Owner's Investments.
Thanks @OrionsBelts! I'll look at that. Otherwise, I was considering just deleting the transactions that cancel each other out. Everything going forward goes into my new savings account. So for bookkeeping purposes, it's all the same savings.
In the end, it really just depends on how much details you want. More detail is always better (or at least, they'll make your accountant happier), but you could just set a starting balance for your new account as it was after the old one was cleared out and just start from there, ignoring the old account entirely. Whatever works best, really.