So.... now we categorize everything into an owners investment / drawings account? So the taxable or tax deductible items we would sort by putting them into personal expense categories for medical bills, or health insurance costs, or ? in personal is just in one big bucket requiring us to sort through and find our own numbers for these categories? How about in the Owners Equity / draw category, creating personal buckets like: Personal Exp. - Health Insurance, or Personal Exp. - Medical Expense ?? This would still have them move through the Owners Investment /Drawings bucket, but be in an additional category we could then use to summarize the end of year numbers for tax reporting.
Just tried this and seems to be working. In my business account, each personal expense I come across, I select Personal Expense or Withdrawal, then under Business Owner Contribution or Drawing, I select Add Account, next I create a personal account such as Personal - Medical Expense, or Personal - Vehicle Insurance, or .... Next time I come to a personal expense for another personal category I need, I make one. With my new accounts in place, I can find the totals for these personal expense categories in Reports, Account Balances and there under Equity are my personal expense totals as I need for tax purposes.
Sorry to be slow, I'm new to Wave and have a very small sole trade business and use one account for business income and expenses and personal expenses. Do I actually need a separate account now for personal expenses? I understand that the 'proper' way is to have separate business and personal accounts but as such a small business this has never made sense for me. Thanks
@Las_Brisas1@KateD Totally understand that your current businesses are smaller ones and so keeping your bookkeeping together for now may make the most sense for ease of use. It's highly recommended that you keep your business and personal bookkeeping separate because as your business scales and grows, you will likely find that your business operations will too. It's not unusual for your business structure to change as you become larger, and in these cases, your tax filings will need to be done separately. I have heard frequently from business owners that when they changed unexpectedly changed their business structure, keeping their business and personal bookkeeping separately ensured that less adjustments to their past books were needed, which ultimately means less headaches!
In saying this, you are more than welcome to use Wave in the way that works best for you! At the end of the day, you have more insight into what works best for you and your business, and my words should be taken as suggestions
No clue where to find the needed Personal Expense or Withdrawal reference.
Luckily I have found another, much better way to add a business expense paid through a personal bank account.
Bookkeeping in other packages I have used is similarly complicated (or more so!) for these sort of transactions eg an expense claim is prepared itemising the items spent with the personal money, including receipts for our ATO (tax man!) - and then reimbursed splitting the transaction according to the expense categories. .
My current situation though is now similar to a lot of Wave users it seems - I have personal, sole trader (no GST). family trust (GST applies) and company (GST applies) - and all have been "downsized" so less effort the better on the bean counting side while I am forced to use less discipline on which account money goes from as there is now less to go around!.
My only other thought had been to either create multiple Wave accounts (one for each entity) and connect all the accounts to each (!!!) or to create "virtual" bank accounts for each business entity and import only the relevant transactions from all the actual accounts (attached to personal so I can get an immediate overview of all) to each virtual account.
Other work-arounds to me have the disadvantage of losing the original transaction detail shown in the bank statement entry eg it becomes ""disconnected"" thru a journal entry or similar - that creates additional room for error and reconciliation headaches / added time input.
Hello @Samd , would it be possible to mark personal deposits (payments for business assets) and withdrawals (for personal use) just into the cash account. So that you would have paid and withdrew from this cash account?
I'm no professional at bookkeeping, but hope you can aswer my question. Wy is it not possible to use the "cash" account to put in the expenses that were paid privately?
@SSL I would also really like to hear the workaround that you've discovered for this particular situation in Wave -- it could really help out a lot of our users who are struggling to manage their personal transactions in Wave.
@brians Thanks so much for sharing your detailed workflow that you have going in Wave right now -- based on what've you wrote, I do feel like this is the current best way to handle personal transactions via Wave right now (unless we hear something new from SSL that could benefit our Wave users). We're definitely looking at improving this in the near future, so I appreciate you giving us the feedback and detail for the time being.
@MADWORK It is possible to use the Cash on Hand account for your banking (any bills that you create in Wave, or expense transactions you create can be associated with this account). If you are having difficulty associating transactions with specific accounts that you've created in Wave (or the default Cash on Hand account), let me know the exact details and I would be happy to look into this further for you.
@JamieD said: @SSL I would also really like to hear the workaround that you've discovered for this particular situation in Wave -- it could really help out a lot of our users who are struggling to manage their personal transactions in Wave.>
I create an expense transaction with 50% of the amount in question since I split house expenses with the business.
A assign it to account Owner Investment/Drawings
Add a vendor
Categorize it as House Expenses (a custom chart of accounts) or Utilities in case of power bills.
Add sales taxes as needed.
That's the best I could find ... If you know any better, let me know.
As a workaround to "moving a personal transaction to a business," Wave recommends moving each of those to Owner Investment / Drawing, then manually creating a complete transaction with the same information for the business. For me that would be for hundreds of transactions, until I manage to separate my personal and biz accounts and credit cards.
Is the following a viable workaround for the above? 1) Create "business categories" in my personal Chart of Accounts (Biz Meals, Biz Repairs, Biz Phone). 2) Categorize personal expenses into these proper accounts 3) At year-end move the amount of the entire category from personal to business with a single manual entry per category. I think this gets the job done without manually reproducing every transaction. Comments welcome!
(note: this may be the approach @Las_Brisas1 described earlier in this thread, just in my own words, to give credit where due.)
Hey @RichGargas. I get where you're coming from here and agree that this would make more sense based on what you're trying to represent in Wave, but I'm not ready to advocate that this is something that should be practiced normally -- mostly because this will make your reconciliation a bit of a nightmare. Totally up to you if that is the road you want to go down, but use at your own risk.
I'm a sole trader that pays myself a weekly wage from my business account. I currently categorize it as owner drawings. are we saying that I could use "Personal Expense or Withdrawal" instead?
If I was to start using this option would it affect my reports in anyway?
Hey @davesecor, thanks for reaching out! By selecting Personal Expense or Withdrawal you are still choosing Owner Investment/Drawings, you can see on your account when you select this category on an expense transaction, this account will appear! So in other words, they are the same thing
Hey @Jaison I've moved your post into this ongoing discussion. I'd recommend taking a look at the article, as well as the discussion. If you still have questions after looking through, let us know and I'm sure a Waver or Admin will be happy to help out.
Not helpful to have such a massive change as not being able to transfer to personal, also means unable to categorise properly under personal spending unless recreate all individually.
TBH it's like having to start again from scratch and, with you guys not supporting UK bank importing & MTD going forward, I'd be better spending that same time re-learning how to use another system for my very simple accounts, or going back to spreadsheets
Hi everyone, I was trying to categorise my expenses, but I have noticed it is not possible to move a transaction from the Business account to "Personal" anymore. Does anyone have any suggestions? Thanks
Our current update is more in line with international standard practice for bookkeeping. Simply moving a transaction from business to personal was not an ideal practice for bookkeeping. Our current method allows you to account for an investment into the account or drawing from your business account. Moving the transaction is simply doing just that, moving a transaction, not necessarily accounting for a loss or gain of that transaction outside of your businesses expenses/income.
I'll reiterate below how to show this transaction.
To show a payment from business A to business B, you would need to categorize it as an Owners Investment/Drawing depending on the account you're in.
Business A account pays for business B expense:
The transaction should look like this
Make sure your business payment account is selected under account then categorize as Personal > Owner investment/drawing.
On the other side of the transaction, business B, you'll want to format it as such:
The income came from an owners investment and was selected to an expense account. In my example I used office supplies.
We've learned that this is the proper method for showing this transaction, as opposed to the classic version which simply moved two transactions between two businesses, but never actually reconciled for both accounts.
I'm missing something here - first time I've tried to use this since your change.
If I put a personal transaction in owners equity/drawings, it doesn't appear in the personal "business". I have a personal and a second "business" (which was actually to manage an estate as executor), but it's not gone in the latter either. Reading the comments it appears I may have to MANUALLY add the other side for each of these. That's just crazy! What am I missing here. What do I do next?
Also I have a random few pounds, which seems to be Stripe charges, which you have moved funder my feet rom my carefully attributed "bank charges" which count as a business expense, to some fixed account I can't control. Why can't I ascribe stripe charges to my own bank charges. And doing it retrospectively now means I have to review my accounts for the last tax year which were all done. Terrible!
Also I can no longer just tab and enter on the keyboard to mark transactions as dealt with. I have to use the mouse/trackpad now which is far, far slower to do the month's accounts.
I've merged your conversation into this thread where I think you may be able to find more answers on how to accomplish this task. See my discussion above!
I'll reiterate below how to show this transaction.
I actually find this a bit patronising
I'm a sole trader, cash basis, sell services (no products), have only basic bank accounts, I only need the very simplest of income/expense that I can do on a spreadsheet, but using Wave allowed me to reconcile bank transactions, capture receipts (well sometimes), create bills for expected expenses and made keeping up easier, I could also keep track of personal spending (which I did not previously do)
The ability to have business & personal aspects and move transactions from one to the other worked perfectly for me, i.e. business side "Move to personal" = "Drawings" and in personal side allowed me to categorise my spending; transactions "Moved from Personal" = "Expense" again categorised correctly.
It would have been nice to have retained that option for those like me, that maybe don't need to do full accountants level double entry bookkeeping, because when I need that I'll have to employ someone.
I'm just reaching out to apologize if you felt that I was being patronizing, I assure you that wasn't my intent at all. So forgive me!
I just wanted to let you and others know that in the past the method we had instated (moving your transaction from business to personal) was incorrect accounting, not on the user level, but on the platform level. Doing this method in your old account did not show this transaction as equity movement. If you were to go to your reports you'd see that this equity transaction did not actually occur as an equity transaction. It would import your transaction into your personal account however it would have attached an account that is still connected to your business. For example your business checking account, or your company credit card, which is likely not affiliated with your personal account. This is a language layer that Wave overlooked and we've fixed by using the owner investment/drawing account. You're correct in saying that this is double entry accounting, and although it may not be how you operate your business we've decided that the best method moving forward was to categorize the transactions as owners drawing in order to maintain a standardized method of showing this type of transaction.
I hope this makes a bit more sense, and although I understand it might not be ideal for you as there is an extra step involved, it is the correct way to show this movement of equity.
@fas said:
I'm missing something here - first time I've tried to use this since your change.
If I put a personal transaction in owners equity/drawings, it doesn't appear in the personal "business". I have a personal and a second "business" (which was actually to manage an estate as executor), but it's not gone in the latter either. Reading the comments it appears I may have to MANUALLY add the other side for each of these. That's just crazy! What am I missing here. What do I do next?
Also I have a random few pounds, which seems to be Stripe charges, which you have moved funder my feet rom my carefully attributed "bank charges" which count as a business expense, to some fixed account I can't control. Why can't I ascribe stripe charges to my own bank charges. And doing it retrospectively now means I have to review my accounts for the last tax year which were all done. Terrible!
Also I can no longer just tab and enter on the keyboard to mark transactions as dealt with. I have to use the mouse/trackpad now which is far, far slower to do the month's accounts.
I'd really appreciate some feedback about how to transfer transactions to personal. This is a major problem for me currently
Barsin at Wave. Thanks for the info and screenshots, but this still isn't totally clear to me. Like others stated, the "old" way was simpler and our bookkeeper understood the Wave reports, but perhaps because Wave is trying to appeal to multiple nations is what's driving the change because I don't think it was a problem for US; we didn't have an issue with personal expenses from our business accounts handled the way it was before.
What do you mean, "On the other side of the transaction, business B..." What do you mean by "on the other side" Exactly what are the steps to get to "the other side" because it seems instructions are missing.
The issue wasn't on the business side of your reports, but on the personal account. When you moved those funds to your personal account they still had an account that was categorized to your businesses chart of accounts. It was not a categorized expense in your personal account. This didn't matter to some people as long as it was categorized as owners draw on the business side.
In regards to importing the transaction, this automation does not exist anymore and needs to be done manually. This exists because often business owners would come to us saying they only wanted to categorize part of their transaction as personal. So for example I spend $10 on office supplies for my business, but $1 is spent on gum, and that's a personal expense. This type of transaction is something we saw frequently. Creating the transaction in your personal account manually gives you the freedom to manually enter part of your transaction as personal AND categorize is to which personal account type you'd like, not one that was attached to your business account.
Believe me I understand the frustration in the lack of automation here, as it seems counterproductive to our previous version, but in reality our team has looked closely at this movement of funds from business to personal and this gives you the most autonomy over the transaction type. Hope this gives a bit more clarity!
It makes it almost unusable for me. Fortunately, I had finished the executor account, as there were dozens like that in there, but even so there are many each month.
This is just awful to contemplate. You cannot leave it like this!
I don't mind it going into equity, but surely you could have a switch that says "create equivalent income transaction in personal" when you do this. If I can create it manually, I don't see what is wrong about giving me a helping hand to create it from information already present instead of forcing me to retype it all. That would also allow a note to be added to each which says where it went to /came from, information which is lost the way you're doing it now.
I don't understand your part business/part personal comment - surely you could always have split a transaction in those circumstances. I do that routinely.
Comments
So.... now we categorize everything into an owners investment / drawings account? So the taxable or tax deductible items we would sort by putting them into personal expense categories for medical bills, or health insurance costs, or ? in personal is just in one big bucket requiring us to sort through and find our own numbers for these categories? How about in the Owners Equity / draw category, creating personal buckets like: Personal Exp. - Health Insurance, or Personal Exp. - Medical Expense ?? This would still have them move through the Owners Investment /Drawings bucket, but be in an additional category we could then use to summarize the end of year numbers for tax reporting.
Just tried this and seems to be working. In my business account, each personal expense I come across, I select Personal Expense or Withdrawal, then under Business Owner Contribution or Drawing, I select Add Account, next I create a personal account such as Personal - Medical Expense, or Personal - Vehicle Insurance, or .... Next time I come to a personal expense for another personal category I need, I make one. With my new accounts in place, I can find the totals for these personal expense categories in Reports, Account Balances and there under Equity are my personal expense totals as I need for tax purposes.
Sorry to be slow, I'm new to Wave and have a very small sole trade business and use one account for business income and expenses and personal expenses. Do I actually need a separate account now for personal expenses? I understand that the 'proper' way is to have separate business and personal accounts but as such a small business this has never made sense for me. Thanks
@Las_Brisas1 @KateD Totally understand that your current businesses are smaller ones and so keeping your bookkeeping together for now may make the most sense for ease of use. It's highly recommended that you keep your business and personal bookkeeping separate because as your business scales and grows, you will likely find that your business operations will too. It's not unusual for your business structure to change as you become larger, and in these cases, your tax filings will need to be done separately. I have heard frequently from business owners that when they changed unexpectedly changed their business structure, keeping their business and personal bookkeeping separately ensured that less adjustments to their past books were needed, which ultimately means less headaches!
In saying this, you are more than welcome to use Wave in the way that works best for you! At the end of the day, you have more insight into what works best for you and your business, and my words should be taken as suggestions
Thank you Jordan, much appreciated. Indeed, you are right. In this first year of putting numbers into Wave, we are recognizing our wayward ways
This is difficult, time consuming, just stresses me out. Now, I need to find another way to budget everything.
No clue where to find the needed Personal Expense or Withdrawal reference.
Luckily I have found another, much better way to add a business expense paid through a personal bank account.
SSL - would you care to share your better way
Bookkeeping in other packages I have used is similarly complicated (or more so!) for these sort of transactions eg an expense claim is prepared itemising the items spent with the personal money, including receipts for our ATO (tax man!) - and then reimbursed splitting the transaction according to the expense categories. .
My current situation though is now similar to a lot of Wave users it seems - I have personal, sole trader (no GST). family trust (GST applies) and company (GST applies) - and all have been "downsized" so less effort the better on the bean counting side while I am forced to use less discipline on which account money goes from as there is now less to go around!.
My only other thought had been to either create multiple Wave accounts (one for each entity) and connect all the accounts to each (!!!) or to create "virtual" bank accounts for each business entity and import only the relevant transactions from all the actual accounts (attached to personal so I can get an immediate overview of all) to each virtual account.
Other work-arounds to me have the disadvantage of losing the original transaction detail shown in the bank statement entry eg it becomes ""disconnected"" thru a journal entry or similar - that creates additional room for error and reconciliation headaches / added time input.
@SSL I would also really like to hear the workaround that you've discovered for this particular situation in Wave -- it could really help out a lot of our users who are struggling to manage their personal transactions in Wave.
@brians Thanks so much for sharing your detailed workflow that you have going in Wave right now -- based on what've you wrote, I do feel like this is the current best way to handle personal transactions via Wave right now (unless we hear something new from SSL that could benefit our Wave users). We're definitely looking at improving this in the near future, so I appreciate you giving us the feedback and detail for the time being.
@MADWORK It is possible to use the Cash on Hand account for your banking (any bills that you create in Wave, or expense transactions you create can be associated with this account). If you are having difficulty associating transactions with specific accounts that you've created in Wave (or the default Cash on Hand account), let me know the exact details and I would be happy to look into this further for you.
I create an expense transaction with 50% of the amount in question since I split house expenses with the business.
A assign it to account Owner Investment/Drawings
Add a vendor
Categorize it as House Expenses (a custom chart of accounts) or Utilities in case of power bills.
Add sales taxes as needed.
That's the best I could find ... If you know any better, let me know.
Is the following a viable workaround for the above?
1) Create "business categories" in my personal Chart of Accounts (Biz Meals, Biz Repairs, Biz Phone).
2) Categorize personal expenses into these proper accounts
3) At year-end move the amount of the entire category from personal to business with a single manual entry per category.
I think this gets the job done without manually reproducing every transaction. Comments welcome!
(note: this may be the approach @Las_Brisas1 described earlier in this thread, just in my own words, to give credit where due.)
Hey @RichGargas. I get where you're coming from here and agree that this would make more sense based on what you're trying to represent in Wave, but I'm not ready to advocate that this is something that should be practiced normally -- mostly because this will make your reconciliation a bit of a nightmare. Totally up to you if that is the road you want to go down, but use at your own risk.
I'm a sole trader that pays myself a weekly wage from my business account. I currently categorize it as owner drawings. are we saying that I could use "Personal Expense or Withdrawal" instead?
If I was to start using this option would it affect my reports in anyway?
Hey @davesecor, thanks for reaching out! By selecting Personal Expense or Withdrawal you are still choosing Owner Investment/Drawings, you can see on your account when you select this category on an expense transaction, this account will appear! So in other words, they are the same thing
On the new platform I can't see where the move to option is available.
Please can you advise?
Hey @Jaison I've moved your post into this ongoing discussion. I'd recommend taking a look at the article, as well as the discussion. If you still have questions after looking through, let us know and I'm sure a Waver or Admin will be happy to help out.
Not helpful to have such a massive change as not being able to transfer to personal, also means unable to categorise properly under personal spending unless recreate all individually.
TBH it's like having to start again from scratch and, with you guys not supporting UK bank importing & MTD going forward, I'd be better spending that same time re-learning how to use another system for my very simple accounts, or going back to spreadsheets
Hi everyone, I was trying to categorise my expenses, but I have noticed it is not possible to move a transaction from the Business account to "Personal" anymore. Does anyone have any suggestions? Thanks
Hey @JCD
Our current update is more in line with international standard practice for bookkeeping. Simply moving a transaction from business to personal was not an ideal practice for bookkeeping. Our current method allows you to account for an investment into the account or drawing from your business account. Moving the transaction is simply doing just that, moving a transaction, not necessarily accounting for a loss or gain of that transaction outside of your businesses expenses/income.
I'll reiterate below how to show this transaction.
To show a payment from business A to business B, you would need to categorize it as an Owners Investment/Drawing depending on the account you're in.
Business A account pays for business B expense:
The transaction should look like this
Make sure your business payment account is selected under account then categorize as Personal > Owner investment/drawing.
On the other side of the transaction, business B, you'll want to format it as such:
The income came from an owners investment and was selected to an expense account. In my example I used office supplies.
We've learned that this is the proper method for showing this transaction, as opposed to the classic version which simply moved two transactions between two businesses, but never actually reconciled for both accounts.
I'm missing something here - first time I've tried to use this since your change.
If I put a personal transaction in owners equity/drawings, it doesn't appear in the personal "business". I have a personal and a second "business" (which was actually to manage an estate as executor), but it's not gone in the latter either. Reading the comments it appears I may have to MANUALLY add the other side for each of these. That's just crazy! What am I missing here. What do I do next?
Also I have a random few pounds, which seems to be Stripe charges, which you have moved funder my feet rom my carefully attributed "bank charges" which count as a business expense, to some fixed account I can't control. Why can't I ascribe stripe charges to my own bank charges. And doing it retrospectively now means I have to review my accounts for the last tax year which were all done. Terrible!
Also I can no longer just tab and enter on the keyboard to mark transactions as dealt with. I have to use the mouse/trackpad now which is far, far slower to do the month's accounts.
Hey @Ma_Uri79
I've merged your conversation into this thread where I think you may be able to find more answers on how to accomplish this task. See my discussion above!
.....
I actually find this a bit patronising
I'm a sole trader, cash basis, sell services (no products), have only basic bank accounts, I only need the very simplest of income/expense that I can do on a spreadsheet, but using Wave allowed me to reconcile bank transactions, capture receipts (well sometimes), create bills for expected expenses and made keeping up easier, I could also keep track of personal spending (which I did not previously do)
The ability to have business & personal aspects and move transactions from one to the other worked perfectly for me, i.e. business side "Move to personal" = "Drawings" and in personal side allowed me to categorise my spending; transactions "Moved from Personal" = "Expense" again categorised correctly.
It would have been nice to have retained that option for those like me, that maybe don't need to do full accountants level double entry bookkeeping, because when I need that I'll have to employ someone.
Hey again, @JCD
I'm just reaching out to apologize if you felt that I was being patronizing, I assure you that wasn't my intent at all. So forgive me!
I just wanted to let you and others know that in the past the method we had instated (moving your transaction from business to personal) was incorrect accounting, not on the user level, but on the platform level. Doing this method in your old account did not show this transaction as equity movement. If you were to go to your reports you'd see that this equity transaction did not actually occur as an equity transaction. It would import your transaction into your personal account however it would have attached an account that is still connected to your business. For example your business checking account, or your company credit card, which is likely not affiliated with your personal account. This is a language layer that Wave overlooked and we've fixed by using the owner investment/drawing account. You're correct in saying that this is double entry accounting, and although it may not be how you operate your business we've decided that the best method moving forward was to categorize the transactions as owners drawing in order to maintain a standardized method of showing this type of transaction.
I hope this makes a bit more sense, and although I understand it might not be ideal for you as there is an extra step involved, it is the correct way to show this movement of equity.
Take care and have a great weekend!
I'd really appreciate some feedback about how to transfer transactions to personal. This is a major problem for me currently
Barsin at Wave. Thanks for the info and screenshots, but this still isn't totally clear to me. Like others stated, the "old" way was simpler and our bookkeeper understood the Wave reports, but perhaps because Wave is trying to appeal to multiple nations is what's driving the change because I don't think it was a problem for US; we didn't have an issue with personal expenses from our business accounts handled the way it was before.
What do you mean, "On the other side of the transaction, business B..." What do you mean by "on the other side" Exactly what are the steps to get to "the other side" because it seems instructions are missing.
Hey there, @CRG @fas
The issue wasn't on the business side of your reports, but on the personal account. When you moved those funds to your personal account they still had an account that was categorized to your businesses chart of accounts. It was not a categorized expense in your personal account. This didn't matter to some people as long as it was categorized as owners draw on the business side.
In regards to importing the transaction, this automation does not exist anymore and needs to be done manually. This exists because often business owners would come to us saying they only wanted to categorize part of their transaction as personal. So for example I spend $10 on office supplies for my business, but $1 is spent on gum, and that's a personal expense. This type of transaction is something we saw frequently. Creating the transaction in your personal account manually gives you the freedom to manually enter part of your transaction as personal AND categorize is to which personal account type you'd like, not one that was attached to your business account.
Believe me I understand the frustration in the lack of automation here, as it seems counterproductive to our previous version, but in reality our team has looked closely at this movement of funds from business to personal and this gives you the most autonomy over the transaction type. Hope this gives a bit more clarity!
It makes it almost unusable for me. Fortunately, I had finished the executor account, as there were dozens like that in there, but even so there are many each month.
This is just awful to contemplate. You cannot leave it like this!
I don't mind it going into equity, but surely you could have a switch that says "create equivalent income transaction in personal" when you do this. If I can create it manually, I don't see what is wrong about giving me a helping hand to create it from information already present instead of forcing me to retype it all. That would also allow a note to be added to each which says where it went to /came from, information which is lost the way you're doing it now.
I don't understand your part business/part personal comment - surely you could always have split a transaction in those circumstances. I do that routinely.