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Reversing Journals
thomssi
Member Posts: 27
Is there any plan to add reversing journal functionality? This is a pretty common feature and helps people avoid double counting things like accruals when an invoice or bill actually hits.
Thanks
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Hi @thomssi . As of right now, there still isn't a timetable as to when we would be adding this particular feature -- although, it could be sometime in the near future. After you associate a payment to a bill/invoice in Wave the accounting is automatically created for you, however, if you do have your bank connected, it will duplicate the amounts associated with those invoices/bills (which is a functionality that needs work).
Hi, @JamieD Thanks for the reply. The issue we have is there are some passthrough transactions effectively as a client service. Where an invoice has been raised but the bill not received then we are effectively recognising revenue that does not exist and will go away once the bill arrives, that is ok but it means if this goes over a month or year end we get periods over and understated.. Now we can enter a manual journal to get rid of this and then post another one to offset when the bill arrives but the worry is someone forgets to do that. If the reversing functionality was there then it would effectively do this automatically and we can correct our month ends without worrying about it and also where possible it is preferable to have just the automatically posted things rather than too much manual intervention.
Thanks
Hey @thomssi,
That makes sense; thanks for taking the time to flesh that out! I can't say if/when that this type of reversal function would be implemented, although it's certainly worth understanding what it could be used for. How often do you find yourself having to journal those reversals back out? How much time would this give you back if there was an automated reversal function?
This is needed and would be nice. I realize Wave is accrual accounting, but true accrual accounting doesn't recognize revenue until it occurs. For example, I operate a photo booth company. We book events pretty far out into future months and years. We do invoice our clients and requiring payment up front with the remainder due closer to the event. So, when I create an Invoice in Wave, if I choose a future Invoice Date (say 9/20/2019 which is one I am working on right now), I cannot have a Due Date prior to that date, which is not ok. So I have to create an invoice with today's date or sometime around now in order to require a payment now. In Wave, that recognizes the revenue now when it really should not be until later. If accounting for correctly, I should then do a JE on today's date to defer the revenue (DR Revenue, CR Deferred Revenue), and then I should be able to set that as an auto-reversing journal to reverse on 9/20/2019 when the event/revenue occurs. Right now that has to be done manually.
The other option would be to expand the Invoice to have an Invoice Date, Rev. Rec. Date, and a Due Date, and then Wave handle all of the Deferred Rev, A/R, and Rev. Rec. on its own, but that is a bigger ask I believe than at least starting with auto-reversing journal entries.
Thank you for your feedback @JamBoothBrandon! Those are both great suggestions I can pass on.
I have this exact same issue - all of my invoices are for 12+ months ahead & manually deferring is a major headache for me!
This is my ONE issue with Wave. I love the app but it has to be able to handle revenue that is Invoiced but not recognized or be able to switch between Accrual or Cash accounting. The preferred method is obviously deferred revenue on the Invoice that can handle taking payment now for work performed later.
In addition to not having a more accurate picture of what is happening (I book now for work due in September 2019, I show revenue this month but none in September) I also can't use my reports to pay Sales Tax, which is a big bummer.
I end up just using the Cash Flow report to recognize Revenue and pay Sales Tax on it because I am not hardcore enough to do JE's on every Invoice.
In the photography business (and I am sure a lot of others) it is almost every Invoice. Any Invoice that has a deposit due or payment plan agreements makes a big mess on the Income Statement because it recognizes all the revenue in one month when no revenue is earned.
The best fix in my opinion isn't a reversal JE, but an ability to set a recognize revenue date on the Invoice.
I end up using the Cash Flow Report as my Income Statement because it is far more accurate for my business than the Accrual method without the ability to have deferred revenue.
Just adding that this feature would be great, also in a client services situation where there is pass through transactions which need to sit on the balance sheet. Currently looking at a manual work around to do a monthly calculation of what to journal at an aggregate level, and then will just have to reverse that manually the following month and journal the new aggregate number. Any update on if this might be added as a feature?
Hey @Kit! Thanks for your taking the time to share your feedback on this! At this stage I have not heard that this feature is being worked on, but it is great to gather these details from you so that the team can reference why this feature is important to you and that there is a need for it.