Bookkeeping undeposited checks
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Recording Check Payments in Transit
Any time there’s a gap between receiving a payment, and the payment actually making its way into your bank account (for instance, when you deposit a check on Friday, and it doesn’t post until Monda...
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What if you don't import your bank records. How would you process the transfer at that point?
Hey @durwoodghib,
That's a good question! The guide above is predicated on the assumption that someone would want the accounting activity in their Wave account to reflect (as much as possible) what's happening in real-time with their bank account. So, the presumption is that you'd import your bank statement in one way or another. When you found this article, what questions brought you to it? Are you looking to get your account set up based on our recommendations, or do you have alternative ways you're looking to set it up?
To get back to your base question, you'd just manually create the income transaction in your Wave account as if it had arrived from your bank connection or an uploaded statement. Then, you'd create the transfer based on the steps described.
I do keep things matching my bank account but since in use Wave for a side business I don't have a lot of transaction. So uploading my statement is an extra step I don't feel is necessary at this point in time.
I appreciate the feedback.
Is this article based on the old system? The description of step 3 makes it seem so. I'm in the middle of being upgraded with one account in the old system and one in the new. These instructions are not working for me in the new system
Thanks,
Chris
Hello, @durwoodghib! So sorry for the delay here! In that case when you upload the receipt, record this transaction to a money in transit account, when the money is withdrawn from your account in the following month, you will need to create another expense transaction showing the money leaving your account. Once that's done you can create transfer from your bank account > the receipt expense transaction to ensure your reconciliation matches up!
Hey @cgarai! The steps in this article are actually geared toward our updated accounting software. Are you having issues following these steps in your older or newer account? Can you confirm for me where you're getting stuck and I would be happy to help!
I followed the steps exactly as indicated above. However, it is still recording as a double transaction. What did I do wrong?
NM. I figured it out.
The changes you've made to your system are an absolute nightmare for me. This requirement, for instance, adds a ton of additional work and unnecessarily complicates transactions. I've already had to pay my bank $100 for old bank statements because your updates caused more than 3 years worth of reconciliations to be thrown off. I'm on the verge of tears daily since you made these changes.
Hi @RayOfSunshine . I can see how learning a new system can definitely be frustrating. The positive aspect to the new system is you're now able to record when the check was cashed, as well as when it actually hits your system, making the insight into your finances a lot more in-depth. In the old system, you'd see when the check was cashed, but not when it actually hit your bank statement.
This is definitely a new workflow so I do understand that it can take some time to understand, but the end result is a more detailed accounting tracking system.
Having to make two different transactions for a check is not my idea of an improvement.
I've never used a bookkeeping system that required this. If it wasn't for the new way your reconciliations work, this wouldn't be necessary. Your reconciliations worked before in the manner reconciliations generally work.
Hey @RayOfSunshine
I just want to apologize that your information wasn't able to be seamlessly migrated without creating adjustment entries. We understand that this was less than ideal, however in order for us to improve our system and give you all the newest updates that are still yet to come, we needed to migrate all users over.
The old version of Wave Accounting only considered verified transactions for reconciliation, however, all transactions were included on reports, which to instances where users considered an account reconciled, but reports were wrong.
The new version counts all transactions in reconciliation to ensure that the transactions that are on reports are reconciled with your bank, helping you keep your reports accurate. Starting reconciliation from the earliest available month is the best way to determine where these errant transactions are, and correct them if need be.
If you haven't checked out our adding adjustment entries article please check this out.
How do I complete a reconciliation with unmatched transactions now? If I issue a check at the end of an accounting period and it doesn't show up on my bank statement until the next accounting period there seems to be no way to finish my reconciliation with all matched transactions accounted for. I must be missing something very obvious. Thank youl
Hi @RiverRider , I merged your comment into this thread which should give you some further insight into how to handle undeposited checks or checks in transit.
Really? Another account to record these transactions in transit? You do understand this isn't proper accounting, right? As a CPA who has to reconcile client's accounts, won't be long until I will be asking them to make the change. And this is from someone who hates QB online, but at least they get it right.
As Wave should know, you can not create an accurate income statement or balance sheet just using imported bank information, as the bank statement does not reflect the date an expense was paid.
Hi, I;m trying to follow the step 2. When you depost check, categorize the deposit as a Transfer from Bank, Credit Card or Loan and select the Money in Transit account. But the problem is the Money in Transit account isn't showed up. The account that is showed up is the accounts in the category of Cash and Bank. Why is it?
Hey @PeterINA , it's possible that a Money in Transit account has not been added to your account yet. You can check this by heading to your Chart of Accounts page and checking the Money in Transit heading. If there's nothing listed, feel free to add a new account to this sub-section.
I am unable to connect my financial institution (a credit union in Southern California) to Wave, and when I attempted to upload a csv of my bank transactions, Wave recorded the transaction numbers as the dollar amounts, which was inaccurate and made everything look wonky. So, I deleted the CSV upload and decided to enter everything manually.
My husband (the owner of the business) processes the checks he receives from clients in Wave and puts the payments into Checks to Clear.
I'm not sure what to do next. I tried entering the deposits from my bank statements manually, but now I don't know how to reconcile those with the payments he has processed.
Am I missing something?
Wow, I can't believe that a legit accounting software package would make you do this, all to "fix" an incorrectly programmed reconciliation process. If you write a check and send it to a vendor, but it hasn't cleared your bank statement by the end of the month, that is not an error! It's an outstanding check; a mere timing difference. "Reconcile" doesn't mean "force my ledger balance to equal what the bank statement says", it means "explain what the differences are". You've turned accruals based accounting into cash based accounting, which is contrary to GAAP. Yikes. And even if you put aside the GAAP angle, why would you create extra work for yourself by changing perfectly correct entries into some new "Money in Transit" account (and presumably changing them back again next month). What a waste of effort!!
What if I can't connect my bank to Wave, though? How then would I do Step #2?
How do I record a check deposit manually in Transactions (the first part of Step #2)? Is it considered an Expense or a Deposit, because neither one is allowing me to "select the Money in Transit" account. I can see the Money in Transit account, but I cannot select it.
Is there anyone who can answer that question?
Hey @Kellye , the .csv uploader can definitely cause headaches sometimes. Try using our Google Sheets integration called Wave COnnect whihd usually makes this process a whole lot easier.
In regards to deposited checks , you can use our Help Center article on creating a transfer to transfer from your Checks to Clear account to your bank account. You'll want to categorize your new bank deposits as transfers to the bank account representing the money finally hitting.
It sounds like maybe you're having an issue with where the Checks to Clear account is located? If your husband has been putting checks into this account in Wave, please ensure that it's located under the same sub-section that the Money in Transit account is located, otherwise you can just move the amount to the Money in Transit account instead.
I followed your steps on Record Undeposited Checks to Money in Transit but it did not zero out the money in transit account once I categorized the deposit and selected the money in transit. All accounts show a total of what is in the bank along with money in transit. Wouldn't the money in transit account zero out?
Hey @Confusedbyaccounting , it sounds like you may have an issue with the way your transfer transactions are working. Check out our Help Center article on transfers to get a full picture of how this works.
The transfer will indeed clear the balance out of your Money in Transfer account and place it into your bank account.
Let us know if you have any specific questions about the process and we'd be happy to answer them!
So out of the three transactions, how do I tie the Invoice number to the payment? Would it not be simpler to either wait until the check clears the bank to record the payment or merge the Invoice and related deposit transaction once the check clears, without creating the Money In Transit transaction? At least I can connect the deposit and the Invoice by following either of these processes.