Split transactions

guust

Let's say I get a payment from Stripe of $97. The payment is because a customer paid me $100 and Stripe charged me a $3 fee.
Why can I not split the transaction into $100 income and a $3 expense?
The only way I can record this payment correctly is to delete the automated transaction reported by Stripe, and do a journal entry with a $100 credit and a $3 debit.
Would it not be simpler that the $97 payment transaction can be split and I can enter $100 as income and also select an expense account to add my $3 fee?
Thanks

Alexia

Hi, @guust,

This isn't how you would represent this in your books. In a case like yours, there are three transactions at play:

• The payment from your client
• The merchant's fee
• The deposit in your bank account

Accounting for this in Wave manually isn't too much work, but it isn't the most intuitive either. Here's what you'll have to do.

1. First, go to your Chart of Accounts and create an asset account using the Money in Transit account type called Stripe.
2. Also, create an expense account called "Stripe fees"
3. When your client pays for your service or product, record it to that account in full (so $100)
4. Then, you create an expense of $3. Choose Stripe as the account and Stripe Fees as the category.
5. Finally, create a transfer for the rest ($97) from the Stripe account to your bank account.

You'll only have to repeat the last 3 steps for future payments handled through Stripe in this way. Let me know if you have any questions!

guust

Thanks @Alexia
That would mean the Stripe integration needs to be turned off, because you will need to delete the notified transactions. What you describe is a journal entry, instead of the automated Stripe notification.

In my scenario, I am notified in my transaction list by Stripe of $97. Stripe does not notify me of anything else. So I need to delete the automated transaction and then create a journal entry like you say. That is how I have been doing it.

1. Sales = CR 100 [split into sales and GST]
2. Bank = DR 97
3. Fee = DR 3 [split into fee and GST]

That is why I was suggesting allowing a split receipt of funds with negative amounts being allowed, so you can correct the sales amount and fee amount, in the one hit. Most other accounting packages I am familiar with do not require general journal entries for every receipt that is a sale reduced by a fee or a discount.

Thanks

Alexia

Hi, @guust,

I'm not exactly suggesting a journal entry, a journal entry wouldn't mark your invoice as paid. To mark your invoice as paid, you would need a transaction categorized as an invoice payment. This can't be done from a journal entry, so using a Money in Transit account for that purpose is best practice.

With that said, I understand where you're coming from and I'm happy to pass your feedback along.

guust

@alexia Just for your information, I do not use Wave to issue invoices, they are issued by other software: https://wpinvoicing.com/
So all I have is a notification from Stripe to Wave of the net amount. Allowing splits in credits and debits would solve quite a few more everyday accounting problems.
Thank you.