Cash on hand inflating total of accounts
jotcreative
Member Posts: 10
I run a very small business and run everything out of one bank account. I rarely handle physical checks and never use an ATM. Since switching to Wave for invoicing and accounting, I'm trying to figure out what to do with this "cash on hand" account.
When I get paid on a Wave invoice, the full payment shows up in my cash on hand account, and so does the fee I pay to Wave. So, say a $10 payment and a $0.59 fee, and cash on hand shows $9.41 (I can't seem to categorize either transaction). My checking account downloads the same transaction from the bank, showing up as $9.41 (I categorize it as "Sales").
Now it looks like my "net worth" is $18.82.
Two questions:
- What is the proper way to handle this?
- Is there somewhere I can go to learn basic things like this instead of troubling you fine people?
Thanks!
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Hey @jotcreative. Simply put, when you accept a payment in Wave from an invoice -- this will automatically create a transaction and put the funds in a holding account (most likely Payments by Wave). The other transaction that comes in is associated with your bank account (the deposit if you have a bank connection). What you will need to do is categorize that transaction as a 'Transfer From Payments By Wave' so the funds are moving into the correct spot. There is a great help centre article that explains how to accomplish this; https://support.waveapps.com/hc/en-us/articles/115004964423-Bookkeeping-changes-to-Payments-by-Wave
One thing I should mention here though, if you are marking invoices as paid manually and selecting the payment account as Cash on Hand, this is where the funds would go initially -- It would be the same process as above but you would need to choose 'Transfer From Cash on Hand' so the accounts aren't bloated.
Hope this help!
This was just what I need to push me over the finish line - thank you!
It appears that prior to 2019 the system was putting my paid invoices into "cash on hand" for some reasons. Transactions since the first of the year have been correctly going into "Payments by Wave." I learned that I could move transactions from one account to another, so I just moved all of the transactions in the "cash on hand" register into the "Payments by Wave" account, and archived the now empty cash on hand since I never use it.
One question remains: why were these going into cash on hand in the first place, and is it the UI refresh that switched it over? I don't remember doing it. That said, if there is a setting, I'd love to know where it is so I can make sure this doesn't happen in the future.
I also now understand how a paid invoice is tied to a transaction, just like account transfers are connected to one another.
So I'm all sorted. Thanks again!
Glad to hear it @jotcreative! In terms of Cash on Hand as a default, this may have occurred in the older version of Wave, and it used to be changeable via Settings > Account Mapping. When we moved users over to our newer system, payment transactions directly through Wave became locked for editing, but there were certain cases where Cash on Hand remained the default account, throwing off the possibility to do transfers. So we basically opened up editing again so that the payment account (in this case Payments by Wave) can be swapped in.
I read through this thread, because I had incorrectly mapped my Payments by Wave to go to my Business Checking Account in 2018, but Wave was also posting the net payment to the same account 2 days later, minus fees. After reading this post about the automatic set up of a "Payments by Wave" account in 2019, I don't see it in my Waveapps.com account. Is there a way to set that up manually?
I can't say for sure, but I read somewhere that not everyone had been moved over to the new Waveapps yet. Perhaps yours is one of those accounts?
https://community.waveapps.com/discussion/comment/11189
I believe you're right about that, since my version doesn't behave the way the blog says it should. I'm having to use journal transactions and then delete the downloaded bank transactions for Payments by Wave.
@britannic I just checked, and can confirm you're on the old version (for now!) so I just wanted to reinforce that you're correct to delete the duplicate transaction which imports from your bank connection when the payments land in your actual Wave account. Keep in mind that when you get migrated to the new version, the workflow is opposite: you need to keep the bank-imported transaction from these payments so Wave can automatically detect the transfer from your money in transit account to your actual bank account!
@Ryan_W, thanks for the heads up!