Payments by Wave - Stripe Tax Reconciliation
triggK
Member Posts: 1
Hi, I am having issues with how to deal with the wave payments as it is not editable, all fields are shaded including the bank account, and categories. I have tried doing a journal transfer from the Pay by Wave account to the bank account but the balance is still not right? What am I missing here, taking a while to get my head around the new changes.
0
Comments
Hey @triggK! You're right there have been some big changes made to the bookkeeping involved in payments received through Wave. Here are the 3 things that you should now be seeing:
1) Your customer pays by credit card, and this automatically creates an income transaction and corresponding expense for the processing fee (just like before)
2) Wave automatically posts this to the Payments by Wave account, which is a money in transit account. This represents that you don't have this money yet, but you will.
3) The income transaction imports from your bank connection. Wave then recognizes this transaction, and automatically transfers the funds from the Payments by Wave account to your actual bank account in Wave. This is based upon Wave recognizing the WAVSV9Txxxx descriptor for those transactions, so make sure you don't change the descriptions on them!
There is also this help centre article that digs a little bit deeper. I hope that helps to clarify things a bit for you!
Hi Zoe
I'm having trouble with the 3rd dot point you mentioned above in your explanation.
Unfortunately wave is not recognizing the payment in the bank import so it's not making the connection between that and the wave payment. Consequently all my "Payments by Wave" transactions just stays in that account. I can only assume this is occurring because the bank transaction amount is different to Wave payment amount; which is because the actual merchant fee levied by Stripe differs from what was automatically calculated in the Wave payment.
Please see attached image for example of the two transactions side-by-side (some details removed). This is happening consistently for all payment via Wave, and there doesn't seem to be any way for me to manually merge these transactions.
Can you please advise how to deal with this, or perhaps allow the editing of the original payment by wave transaction to manually adjust the merchant fee?
Note: We're based in Australia with Aussie $ setup as the currency.
Thanks
@Municator Wave doesn't automatically account for taxes in Stripe's fees. Since you're in a region where Stripe charges tax on the processing fee, you'll need to add this manually using a Journal Transaction. To open this function, click on More > Add journal transaction in the upper right-hand corner of the Transactions page.
If the tax you're recording is recoverable, the Journal Transaction should look like this:
Dr Sales Tax Paid Account for the amount of the tax
Cr Payments by Wave clearing account for the amount of the tax
If the tax is not recoverable, the Journal Transaction should look like this:
Dr Merchant/Stripe Fee Account for the amount of the tax
Cr Payments by Wave clearing account for the amount of the tax
Then, if you have your bank account set to automatically import to Wave, make sure to categorize the incoming deposit as a transfer from the Payments by Wave account.
One last thing to note - if the tax you're paying is recoverable, make sure to add this detail to the notes of the Journal Transaction for your records. You'll also want to use the account transactions report for this Sales Tax, found by going to Reports > Account Transactions report, when filing. Because this tax has been entered manually using a Journal Transaction, it won't appear on the Sales Tax report as other transactions do.
I hope this helps to guide you, and clarifies how to keep track of tax on fees for your Wave account.
We are also in Australia, and whilst I appreciate the instructions above to rectify the issue, this is going to add a LOT of extra work and make reconciliation of these transactions much more complicated than it ever was before. It will require at least a daily journal entry if not more.
This is a very disappointing change.
Unlocking the fields for the Merchant Fees for Payments by Wave transactions would allow us to edit the fee to include GST (recoverable tax) without having to do any additional calculations.
Thank you for that feedback @Joy, I'm going to make sure that your feedback is noted, and I do apologize for the additional work required with this method.