Why does Wave payments put the transaction through Cash on Hand?
halifaxopera
Member Posts: 3
Why do Wave Payments default to Cash on Hand when the money is being put into my chequing account? Is it because the service charge is taken out before the money is deposited? Do I then have to do a transfer from cash on hand to chequing? That's an extra (and somewhat annoying) step. Is there a better way to set this up -- I really don't want to have to do transfers in the bookkeeping for my credit card payments.
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Hello @halifaxopera you can change this in the settings. I put mine as the Bank account, you’ll see 2 transactions: (1) the full invoice payment (2) the fee that is deducted. Only 1 will appear in your actual bank statement (the net payment that is deposited).
The reasoning behind posting to the Cash on Hand account first is that the funds are not immediately available in the bank (3 days or so). I agree it would be a nice feature that when the net deposit transaction is imported from the bank account that we could manually choose the Cash on Hand account as the appropriate account to be Credited.
Thanks @LagoFinancial for taking this one!
Hi @halifaxopera. @LagoFinancial is mostly right! The bank account as it exists on the Payments page, and the one that appears on your Chart of Accounts (whether or not you have an active bank connection going), don't link automatically. Wave doesn't have a way to see both of these accounts as matching by default. We default to "Cash on Hand" as the default payment account, simply because it's the default payment account everywhere. Thank you for bringing this up, actually. If this is causing confusion, it's certainly a process we should look into making smoother.
The asset account linked to the bank account can be changed on the Settings page, under "Payments Mapping". Let me know if you need help!
@Alexia cc: @halifaxopera, @LagoFinancial, I found this thread dealing with the same confusion. I think it makes sense that the payment would default to the Cash on Hand Account since the fee is not charged to your bank account, but processed before the net payment is "Transferred" to your bank account. It would then make sense that when the linked bank account shows the net payment being deposited, that Wave would create the accompanying transfer from Cash on Hand to the bank account it was transferred to. Is this an option on the platform yet? Otherwise is this on a development roadmap?
Thanks!
Good point @halifaxopera. One of my concerns with the Wave chart of accounts is that some key accounts are system accounts and can't be changed. You can create a chequing account if you want. The 'checking' account is synonymous with your cash account.
Hi, @Birtwe11.
Actually, the payment goes through a transit account first. The full payment for an invoice paid through Payments by Wave goes to "Payments by Wave". Then, an expense transaction for the fee is applied to that account, and finally, the rest is transferred to whichever account is mapped for payment.
The intention is for new users to add their bank accounts to Wave when they set things up. Cash on Hand represents physical cash that belongs to the business but isn't in a bank account. It's used as a default in a lot of places simply because it's the only payment account created its the only one that exists when you create your Wave account.
@Alexia - So if I understand it correctly, if I set the payment mapping to the linked bank account that receives the transfer, Wave will automatically create the necessary transactions so that they match what is reflected on the linked bank statement?
Exactly that, @Birtwe11.
It won't change past payments, but all of your future payments should be accounted for automatically.
@Alexia Great! Thanks for your help!