Mixed income and expenses in one transaction - how best to record in Wave?

DancingSamurai

So one of the locations I provide services for pays me monthly with a cheque that includes money they collected for me, from which they deduct operating expenses. E.G. if I have $5000 income, and they charge me 30% for rent/overhead expenses, they would cut me a cheque for $3500. My bank statement would record this as a deposit of $3500. However, I can't split this transaction into INCOME of $5000 and EXPENSE of $1500 in Wave, or at least I haven't figured out how to do this. If I enter two SEPARATE transactions, I won't be able to match / merge my downloaded bank transactions, although that seems to be the simplest workaround.

What's best practice in this situation?

Alexia

Hi, @DancingSamurai.

I'm going to assume you've issued a $5,000 invoice in your example, but if you just record it as income without an invoice, the workflow is almost the same, I can follow-up with the differences if you need me to. Let's go through this step-by-step.

1. First, you'll have to create an account in your Chart of Accounts called "Undeposited Funds". This needs to be an asset account with the "Bank & Cash" type. Money in this account represents money that's yours, but not in your hands just yet.
2. Record the full payment to your invoice and choose Undeposited Funds as the payments account.
3. Create an expense transaction to Undeposited Funds for the operating costs of $1,500.
4. When the transaction from your bank connection comes in, categorize it as a "Transfer from Undeposited Funds"

By following this process, you'll be able to mark your invoice as paid and keep track of absolutely everything, while still being able to reconcile with your bank statement.