Hi @muzufx , thanks for providing this specific feedback and for all the understanding you bring with it! For context (in addition to being free software), Wave isn't working on this particular feature, and has no plans to at this time, because we're focused on being a finance management app, rather than product, project, or time management-focused.
I can definitely understand how this can get a little overwhelming to dig into, and if you or other users ever need help with any of the steps, the Community admin team is happy to help with explaining to how-tos & expanding on complicated steps with you.
instead of creating a specific journal entry why cant wave do that for me
and instead of having to put the inventory account why not calculate the remaining inventory based on purchase-resale items
Hello!
New to Wave and really trying to learn how to use it as intended. I followed the example above as it relates to purchasing and selling inventory. The gap in my understanding is how the purchase of the inventory translates under the "Purchases" features in Wave. I started with trying to add it via Recipes, but I see that I'm not given the ability to assign an Inventory category to a receipt (confirmed by @BarsinA below). So then I went to Bills thinking this was the intention. In adding a bill I see the inventory category, but when I go to add the Product/Service I yet again, cannot assign the Inventory category to the expense. I not only need to track the transaction of the inventory purchase (as described above), but need to record the purchase/receipt of it.
Hi @munachiso , I'm afraid I can't comment on why the system was built like this, but these are the current steps to add track Inventory in Wave at the moment.
Hey @CharlesN , when creating an expense transaction in your Transactions page, you are in fact recording the purchase of the inventory. Is there any reason that you want to have this recorded specifically under the Purchases section / under Bills or Receipts?
Hi @AlexL, thanks for the reply.
Recording it under receipts and associating it to a transaction is a HUGE advantage to organize and manage my receipts. I love being able to review a transaction and quickly see the associated receipt (I don't know of a way to attach a receipt to a transaction other than adding it to receipts first). As for the Purchases section I'm still lost on its purpose if I'm being honest.
Hi @CharlesN - thanks for following up with us on this! When uploading receipts into Wave, you are correct that the transaction is only created when you upload the receipt and assign an expense account for the receipt. Once the receipt transaction is created in the Transactions page, it can be merged with an imported transaction from your bank statement if it matches the details in the receipt (i.e. the amount and date of the receipt transaction).
As for the Purchases section in your Wave account, the features within it function the same way as the receipts do. You can create bills, add vendors, record payments on those bills etc. These features allow you to track purchases you've made to vendors by either allowing you to upload receipts or to create bills for specific vendors. Please let us know if you need further clarification on these features!
Thank you @QaisE. It's still not clear the expectation on how to use the Receipts and Purchasing features in relation to purchasing and selling inventory. When I purchase an item I put into inventory, I'm recording the transaction as detailed in this article, but I really want to also associate/upload the receipt to that transaction. I can't because when I upload the receipt I'm unable to assign it to an Inventory category. Is this by design or am I missing something?
Hey @CharlesN , thanks for getting back! That's correct, when you upload a receipt via Receipts, the only options to select are expense accounts, whereas the recording of inventory requires categorization to an asset account. I'll provide some context & a solution below.
CONTEXT
Ultimately, recording inventory in Wave is a sort of workaround rather than a designed function, so it does encounter some snags when the workaround is interacting with other features designed for a different focus - such as Receipts, which is a feature designed to focus on the less advanced accounting action of recording expenses. (Inventory recording is more advanced.)
WORKAROUND
What you can do as a workaround, if you want receipts uploaded & posted to Accounting to be part of your inventory tracking, is to:
Head to Purchases > Receipts
Upload your receipt. Once 'Ready', under the Account field, choose the correct account from which this expense was withdrawn. Under the Category field, choose any expense category; it doesn't matter which. Under the NOTES section, make a note that reads something like "The category here in Receipts is wrong; refer to the category in Accounting > Transactions for the true record" so that you have a record of this discrepancy.
Head to Accounting > Transactions, and change the category on the posted transaction to your inventory asset account
When you click 'view receipt' from within this transaction, it will show you the receipt, and be associated with the correct expense account in your reports, as the Reports feature pulls data from the Transactions page rather than from the Receipts page.
If you look at the receipt alone in Purchases > Receipts, it will still show the wrong category - but as long as it is correct in Accounting > Transactions, then it will report accurately. Hopefully this helps!
Thank you for the detailed response. This confirmed my assumptions and have been using this workaround (I've been selecting Uncategorized Expense in Receipts). Please share with your product team a #FeatureRequest to associate receipts of purchased inventory without a workaround and a more clear delineation of the traceability. Thank you!
Hey @cliang! Stock checking and inventory management as far as product count isn't actually something that is currently available within Wave. I'm sorry for the inconvenience here!
This is tedious. Wave is the best out there but surely an inbuilt inventory system has to be the goal for development team. Creating all those accounts and subsequent entries just forces one to look for alternatives. As it is with wave a business with many items for resale can only record sales for the same but fails on stock reconciliation. One is forced to outsource an inventory system of use excel and again book the same sales. Please we humbly request a basic and simple inventory system where items bought from suppliers once sold inform the user of stock levels and re-order levels without the need to carry many apps and excel sheets. For the team.
Hi, you need to somehow have the functionality to allocate a transaction from the Transactions as a "Sale from Inventory" so that it automatically generates the journal to reduce Inventory by the same amount. This is a very simple fix to a step that currently users unnecessarily having to do manually. So you would chose when allocating a transaction what Asset account to reduce and the system would automatically do the journal. Find it baffling that the official work around is something so time consuming as to be impractical and is completely limiting the functionality of the entire platform. Worse yet, you have so many other great features that it is so frustrating to find out that something as simple as creating a journal by some sort of flag or drop down menu is still not fixed. This is nothing to do with inventory management, unit tracking, FIFO or nothing like that, just automation of a manual step, take the transaction value and reduce the selected inventory account, simple.
I have added a number of bills under Purchases > Bill which gets added into Transactions as a 'Bill Payment' with a category of e.g. 'Bill #6145 | Payment to CompanyX'. Should I then change the category to my selected Inventory category? Will this affect anything? Thanks
In this case when it comes to inventory tracking it's actually best to just use an expense transaction on your Accounting > Transactions page rather than a bill!
Hello,
since there is so much interests in relation to inventory, are there any plans to implement in the nearest future the inventory management / stock checking module?
Currently Wave does not offer this feature within this version of our app. We're always looking for feedback from our customers on how we can improve our software with every update we make.
Presently, this is not a feature we have on our roadmap at this time. I do apologize about that!
Hey there @Mcdohl ! In this case, you would record a traditional refund in your Wave account. If you'd like, you can also leave a note on the transaction or change the description to help you identify that the refund was for damaged goods/inventory.
How do you account for inventory write off (damaged goods). I assume you can just do a journal transaction from inventory to COG account or is it better to have a 'Damaged inventory' expense account. Please explain the correct method.
Thanks
I do type in the VAT on all my receipts even though I'm not VAT registered. I see it spilts out the VAT in inventory journal entries (so the inventory doesn't reflect what I paid). What is the best way of accounting for tax in inventory accounts for a non tax registered business?, thanks
Hey @David101 ! Since our inventory tracking method is a workaround and not a functionality that is built out through Wave, I advise you to reach out to a professional CPA to get the most accurate accounting advice in this case. I'm sorry for the inconvenience.
Hi All, @Barsin and other Wave administrators
Thank you for the great work you do.
Picking up from the below reply to @David101
...."Hey there @David101
In this case when it comes to inventory tracking it's actually best to just use an expense transaction on your Accounting > Transactions page rather than a bill! "...
The above scenario would be giving misleading information on the dashboard at a glance. One of the principles of accounting is prudence concept - do not overestimate the amount of revenues recognized or underestimate the amount of expenses to be recognized. As it is their should be a feature added when one makes an entry with regards to purchase. The current option is an expense bill. You will appreciate that for retail businesses when a purchase is made it is a current asset in form of inventory. By design wave categorizes everything as either a revenue or expense. As such the reports generated from the system will be misleading as purchases (inventory stock-current assets) have been categorized as expenses when in-fact they are assets. This will give the impression the company is making losses but in truth those are inventory captured inaccurately as they can only be registered as losses when they are sold for less than they were bought.
To paraphrase an option needs to be added under purchases that will capture stock as current assets and not bills. This will give a better financial position in accordance with materiality concept.
I've been with Wave for over 8 years. I find it very sad that you ask us to make suggestions on new features, but then answer "Sorry, it is not on our roadmap at this time". What is the point?
The point is it leads us to keep searching for another tool offering 100% free online accounting [with all the stuff you DON'T offer]
I have tried my best to find an answer to my own question reading all the Q&A's here, but I still am missing something and would appreciate the help!
We make and sell solar lamps. We have several accounts under Expenses - COGS like electrical components, material components, different supplies to build our lamps etc, basically anything used to piece together our final product which is a lamp.
So when we go out and buy this material, let's say we purchase 100usd worth of electrical components, 100usd worth of glue and 100usd worth of other assembly materials, all have their own separate accounts under Expenses - COGS. This is exactly what we need as it tracks all that which we spend that goes towards making our lamps.
When a lamp has been assembled, its given a serial number and it waits on a shelf to be sold, and as soon as it gets sold we simply record a Sale which goes to an account in our Income section.
However, I need to use the Inventory account to track the lamps as Assets on our balance sheet. How can I link the Inventory Account to our expense COGS accounts and then our Sales Income accounts?
I hope I have made myself clear, thanks in advance for the help!
As you may know, Wave does not currently support inventory tracking I'm afraid. However, we do offer one workaround. Feel free to check it out here.. With this method, you can create inventory asset accounts and keep track of each account's balance on your Balance Sheet along with the performance of your business after each sale through your Profit and Loss report.
Since this is only a workaround, if you have any specific questions about the accounting behind this process, I recommend reaching out to a professional CPA for further guidance. I hope this helps!
To clarify, did you follow this workflow when creating your inventory asset account(s)?:
To handle basic inventory accounting in Wave, you need two additional accounts: an Inventory asset account, and a Cost of Goods Sold expense account. Here's how you can create your new accounts:
On the left hand menu bar, head to Accounting > Chart of Accounts
Under the Asset account type, click on the Inventory account to add it. On the next line enter the name of this new account. Click Save to create the new account.
Under the Expense account type, click on the Cost of Goods account. On the next line enter the name of this new account. Click Save to create the new account."
This doesn't work for those who make their own inventory. Great if you buy it to resell, however how do I track inventory price from what I made to sell from the parts and materials i've bought.
Example:
Parts and materials (COGS)----> make products worth $1000 & waiting to be sold (Inventory assest) ----> sold product (income). How do I track the sold product from the made product worth? Or is this inventory workaround only made for those who buy and resell already made items?
This is very confusing and it would be awesome if i could talk to a human so im not incurring an extra $2k in taxes for no reason except the fact that it literally makes no sense
Comments
Hi @muzufx , thanks for providing this specific feedback and for all the understanding you bring with it! For context (in addition to being free software), Wave isn't working on this particular feature, and has no plans to at this time, because we're focused on being a finance management app, rather than product, project, or time management-focused.
I can definitely understand how this can get a little overwhelming to dig into, and if you or other users ever need help with any of the steps, the Community admin team is happy to help with explaining to how-tos & expanding on complicated steps with you.
instead of creating a specific journal entry why cant wave do that for me
and instead of having to put the inventory account why not calculate the remaining inventory based on purchase-resale items
Hello!
New to Wave and really trying to learn how to use it as intended. I followed the example above as it relates to purchasing and selling inventory. The gap in my understanding is how the purchase of the inventory translates under the "Purchases" features in Wave. I started with trying to add it via Recipes, but I see that I'm not given the ability to assign an Inventory category to a receipt (confirmed by @BarsinA below). So then I went to Bills thinking this was the intention. In adding a bill I see the inventory category, but when I go to add the Product/Service I yet again, cannot assign the Inventory category to the expense. I not only need to track the transaction of the inventory purchase (as described above), but need to record the purchase/receipt of it.
TIA!
Hi @munachiso , I'm afraid I can't comment on why the system was built like this, but these are the current steps to add track Inventory in Wave at the moment.
Hey @CharlesN , when creating an expense transaction in your Transactions page, you are in fact recording the purchase of the inventory. Is there any reason that you want to have this recorded specifically under the Purchases section / under Bills or Receipts?
Let me know.
Hi @AlexL, thanks for the reply.
Recording it under receipts and associating it to a transaction is a HUGE advantage to organize and manage my receipts. I love being able to review a transaction and quickly see the associated receipt (I don't know of a way to attach a receipt to a transaction other than adding it to receipts first). As for the Purchases section I'm still lost on its purpose if I'm being honest.
Hi @CharlesN - thanks for following up with us on this! When uploading receipts into Wave, you are correct that the transaction is only created when you upload the receipt and assign an expense account for the receipt. Once the receipt transaction is created in the Transactions page, it can be merged with an imported transaction from your bank statement if it matches the details in the receipt (i.e. the amount and date of the receipt transaction).
As for the Purchases section in your Wave account, the features within it function the same way as the receipts do. You can create bills, add vendors, record payments on those bills etc. These features allow you to track purchases you've made to vendors by either allowing you to upload receipts or to create bills for specific vendors. Please let us know if you need further clarification on these features!
Thank you @QaisE. It's still not clear the expectation on how to use the Receipts and Purchasing features in relation to purchasing and selling inventory. When I purchase an item I put into inventory, I'm recording the transaction as detailed in this article, but I really want to also associate/upload the receipt to that transaction. I can't because when I upload the receipt I'm unable to assign it to an Inventory category. Is this by design or am I missing something?
Hey @CharlesN , thanks for getting back! That's correct, when you upload a receipt via Receipts, the only options to select are expense accounts, whereas the recording of inventory requires categorization to an asset account. I'll provide some context & a solution below.
CONTEXT
Ultimately, recording inventory in Wave is a sort of workaround rather than a designed function, so it does encounter some snags when the workaround is interacting with other features designed for a different focus - such as Receipts, which is a feature designed to focus on the less advanced accounting action of recording expenses. (Inventory recording is more advanced.)
WORKAROUND
What you can do as a workaround, if you want receipts uploaded & posted to Accounting to be part of your inventory tracking, is to:
If you look at the receipt alone in Purchases > Receipts, it will still show the wrong category - but as long as it is correct in Accounting > Transactions, then it will report accurately. Hopefully this helps!
Thank you for the detailed response. This confirmed my assumptions and have been using this workaround (I've been selecting Uncategorized Expense in Receipts). Please share with your product team a #FeatureRequest to associate receipts of purchased inventory without a workaround and a more clear delineation of the traceability. Thank you!
Hi there!
How can I generate an inventory list for stock checking?
Hey @cliang! Stock checking and inventory management as far as product count isn't actually something that is currently available within Wave. I'm sorry for the inconvenience here!
This is tedious. Wave is the best out there but surely an inbuilt inventory system has to be the goal for development team. Creating all those accounts and subsequent entries just forces one to look for alternatives. As it is with wave a business with many items for resale can only record sales for the same but fails on stock reconciliation. One is forced to outsource an inventory system of use excel and again book the same sales. Please we humbly request a basic and simple inventory system where items bought from suppliers once sold inform the user of stock levels and re-order levels without the need to carry many apps and excel sheets. For the team.
Hi, you need to somehow have the functionality to allocate a transaction from the Transactions as a "Sale from Inventory" so that it automatically generates the journal to reduce Inventory by the same amount. This is a very simple fix to a step that currently users unnecessarily having to do manually. So you would chose when allocating a transaction what Asset account to reduce and the system would automatically do the journal. Find it baffling that the official work around is something so time consuming as to be impractical and is completely limiting the functionality of the entire platform. Worse yet, you have so many other great features that it is so frustrating to find out that something as simple as creating a journal by some sort of flag or drop down menu is still not fixed. This is nothing to do with inventory management, unit tracking, FIFO or nothing like that, just automation of a manual step, take the transaction value and reduce the selected inventory account, simple.
I have added a number of bills under Purchases > Bill which gets added into Transactions as a 'Bill Payment' with a category of e.g. 'Bill #6145 | Payment to CompanyX'. Should I then change the category to my selected Inventory category? Will this affect anything? Thanks
Hey there @David101
In this case when it comes to inventory tracking it's actually best to just use an expense transaction on your Accounting > Transactions page rather than a bill!
Hello,
since there is so much interests in relation to inventory, are there any plans to implement in the nearest future the inventory management / stock checking module?
Hey there @KC280780
Currently Wave does not offer this feature within this version of our app. We're always looking for feedback from our customers on how we can improve our software with every update we make.
Presently, this is not a feature we have on our roadmap at this time. I do apologize about that!
hey there,
How do I record Damaged Goods/Inventory that I received from my supplier? I have already been refunded the damaged items.
Thank you
Hey there @Mcdohl ! In this case, you would record a traditional refund in your Wave account. If you'd like, you can also leave a note on the transaction or change the description to help you identify that the refund was for damaged goods/inventory.
How do you account for inventory write off (damaged goods). I assume you can just do a journal transaction from inventory to COG account or is it better to have a 'Damaged inventory' expense account. Please explain the correct method.
Thanks
I do type in the VAT on all my receipts even though I'm not VAT registered. I see it spilts out the VAT in inventory journal entries (so the inventory doesn't reflect what I paid). What is the best way of accounting for tax in inventory accounts for a non tax registered business?, thanks
Hey @David101 ! Since our inventory tracking method is a workaround and not a functionality that is built out through Wave, I advise you to reach out to a professional CPA to get the most accurate accounting advice in this case. I'm sorry for the inconvenience.
Hi All,
@Barsin and other Wave administrators
Thank you for the great work you do.
Picking up from the below reply to @David101
...."Hey there @David101
In this case when it comes to inventory tracking it's actually best to just use an expense transaction on your Accounting > Transactions page rather than a bill! "...
The above scenario would be giving misleading information on the dashboard at a glance. One of the principles of accounting is prudence concept - do not overestimate the amount of revenues recognized or underestimate the amount of expenses to be recognized. As it is their should be a feature added when one makes an entry with regards to purchase. The current option is an expense bill. You will appreciate that for retail businesses when a purchase is made it is a current asset in form of inventory. By design wave categorizes everything as either a revenue or expense. As such the reports generated from the system will be misleading as purchases (inventory stock-current assets) have been categorized as expenses when in-fact they are assets. This will give the impression the company is making losses but in truth those are inventory captured inaccurately as they can only be registered as losses when they are sold for less than they were bought.
To paraphrase an option needs to be added under purchases that will capture stock as current assets and not bills. This will give a better financial position in accordance with materiality concept.
Regards,
Truth Only.
I've been with Wave for over 8 years. I find it very sad that you ask us to make suggestions on new features, but then answer "Sorry, it is not on our roadmap at this time". What is the point?
The point is it leads us to keep searching for another tool offering 100% free online accounting [with all the stuff you DON'T offer]
Hi all,
I have tried my best to find an answer to my own question reading all the Q&A's here, but I still am missing something and would appreciate the help!
We make and sell solar lamps. We have several accounts under Expenses - COGS like electrical components, material components, different supplies to build our lamps etc, basically anything used to piece together our final product which is a lamp.
So when we go out and buy this material, let's say we purchase 100usd worth of electrical components, 100usd worth of glue and 100usd worth of other assembly materials, all have their own separate accounts under Expenses - COGS. This is exactly what we need as it tracks all that which we spend that goes towards making our lamps.
When a lamp has been assembled, its given a serial number and it waits on a shelf to be sold, and as soon as it gets sold we simply record a Sale which goes to an account in our Income section.
However, I need to use the Inventory account to track the lamps as Assets on our balance sheet. How can I link the Inventory Account to our expense COGS accounts and then our Sales Income accounts?
I hope I have made myself clear, thanks in advance for the help!
Hey @AndreasSagar !
As you may know, Wave does not currently support inventory tracking I'm afraid. However, we do offer one workaround. Feel free to check it out here.. With this method, you can create inventory asset accounts and keep track of each account's balance on your Balance Sheet along with the performance of your business after each sale through your Profit and Loss report.
Since this is only a workaround, if you have any specific questions about the accounting behind this process, I recommend reaching out to a professional CPA for further guidance. I hope this helps!
I dont see my new Inventory asset category in the drop down menu
Hey @Serge !
To clarify, did you follow this workflow when creating your inventory asset account(s)?:
To handle basic inventory accounting in Wave, you need two additional accounts: an Inventory asset account, and a Cost of Goods Sold expense account. Here's how you can create your new accounts:
For more information on this workflow, feel free to check out this Help Center article.
This doesn't work for those who make their own inventory. Great if you buy it to resell, however how do I track inventory price from what I made to sell from the parts and materials i've bought.
Example:
Parts and materials (COGS)----> make products worth $1000 & waiting to be sold (Inventory assest) ----> sold product (income). How do I track the sold product from the made product worth? Or is this inventory workaround only made for those who buy and resell already made items?
This is very confusing and it would be awesome if i could talk to a human so im not incurring an extra $2k in taxes for no reason except the fact that it literally makes no sense