Reconciling Bank Statement when invoices and payments are in different months

SteveLamar

I am running accrual basis for my business. When I receive an invoice from a contractor, I upload to Wave as a receipt. I then merge the receipt with the payment made through my checking account. When I merge, the date of the transaction matches the invoice date. So, if the receipt date is Aug 30 and the payment is Sept 8, the transaction date saves as Aug 30, which I want to happen since I am running accrual. But, I am not able to reconcile my bank statement because the date of the transaction falls into a different month than when it was paid. Am I doing this right? Is there another way I should be setting this up?

Ellie_Writes_Things

Wouldn't making those bills, on the Bills page, fit what you're looking for better, @PromoPrep? You'd be able to make give them a billing date and a separate payment date, which would prevent this exact problem from popping up.

You should only be recording transactions to your bank account on dates that match with those actual payments. If you wanted to record that invoice by hand, you'd make a journal transaction that credits Accounts Payable and debits your expense account on the invoice date, and another one that credits your bank account and debits Accounts Payable when you pay it off. I'm pretty sure that's what Bills do automatically. Check the Bills page out, anyways. I think it's what you're actually looking for.

Shaun_SGL_Services

I'm having the same issue, including when the transaction takes a few days to clear.
The receipt date is the correct on to use, but it might go through my bank 2 days later and if that crosses the statement date it throws the reconciliation out.

Bills would not be a workaround for these instances

SteveLamar

@Ellie_Writes_Things Bills come in the same way. If I date the bill when I get the invoice (Aug 30), and make a payment on Sep 3, both show in the transactions log. I then merge the transactions and the date of the transaction changes to Aug 30, which is what I want in order to track the invoice in Aug. But, that debits the amount in Aug, and messes up the August reconciliation of the bank statement. I feel like this is a very basic bookkeeping thing that I am missing something somehow.

Alexia

Hi, @Shaun_SGL_Services and @PromoPrep,

@PromoPrep, you shouldn't be merging transactions for bill payments. All you have to do is categorize your payment on the transactions page as "Payment for a Bill" and choose the appropriate bill. With that said, can you give me a step-by-step breakdown of everything you are doing as part of recording a bill? I can't seem to replicate your issue on my end. If I can see exactly what you are doing, I'll have a better idea of whether this is an issue with your workflow or a problem within Wave.

@Shaun_SGL_Services, the transactions on your Transactions page should always match up with the dates as they appear on your bank statement. If you're paying by cheque, for example, and those take a few days to process, you should create an asset account with the Money in Transit account type to log those expenses instead. Once the payment clears, categorize the transaction as a transfer to that Money in Transit account instead of merging it. This will ensure that your numbers match up with your bank statement, and with reality.

Shaun_SGL_Services

Hi Alexia, thanks for replying.

I don't pay by cheque, it is usually where a card payment is made but it takes a few days to go through. I'll start crediting to Creditors and then paying that off with the bank transaction 😊

Thanks

SteveLamar

@Alexia Thanks for the response Alexia. I have been uploading invoices as receipts because I want to capture the invoice in the system to keep a record of it. So, what it sounds like what I should be doing is adding an invoice as a bill, then assign the payment to the bill. Is there a way to upload bills like I do receipts for invoices so I don't have to manually add bills and I can keep a record of the invoice in the system?

Alexia

Hi, @PromoPrep,

No, it isn't currently possible to upload a bill in the same way you upload receipts in Wave. If you'd like to have both a receipt and a bill linked together, that is possible, but it takes a bit of work. Here's how you do it.

• When you receive the bill, enter it on the Bills page as normal.
• When you pay for it, use the Receipts page to enter that transaction with a picture of your bill. Use any expense account as the Category (you'll change that in the next step, so it doesn't matter much). Make sure that you date this on the payment date.
• Find the transaction created by the Receipt on your transactions page and change the category to "Payment sent for a bill in Wave" and choose the appropriate bill.

That'll make sure you have documentation on Wave for that payment, and that the bill is handled as it should. I hope this helps!