Reconciling Invoice Payment transactions vs Bank Deposit Transactions
dwarrilow2002
Member Posts: 3
When a sales invoice is processed it records as a deposit into the bank account or a holding account until the Deposit transaction appears from the Bank. However the Bank Deposit transaction shows as an Income transaction doubling the Sales (initial Invoice transaction + Bank Deposit)...
This is deposit could be a combination of multiple deposits ... is there a help guide or suggestion on how to reconcile this?
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Hey dwarrilow2002,
We're in the process of rolling out a new version of Wave's accounting platform that will make accounting for these kind of payments as easy as marking the transaction as a payment from another account. In the meantime, there are two workarounds to reconcile these transactions:
The first involves simply deleting the bank-imported transaction, and editing the Wave-created transaction's information to reflect the payment date as it appears on your bank statement.
The second is a little more difficult should be employed if you're trying to account for money in transit. The initial payment should be recorded to a holding account, as it sounds like you've been doing. When the bank-imported transaction is brought in, create a separate expense transaction whose Account is set to the holding account. Check the boxes to the left of the bank transaction and the expense transaction and select "Transfer." This will show a transfer of funds from the holding account to the bank account.
Hope this helps!
We had the same issue and in the end had to create a "sister" account. With one being the one that reconciles to the bank and the other being the one with the up to date paid invoices etc. Its a real problem and looking at your post this is something that has been going on since Feb as a known issue and its now July! We are considering making the switch to Quickbooks because we are finding when doing reports, we can not break down the income into categories either either sales wise or account wise. (ie the reports include both the sister acct and the regular acct combined and we can't look up sales or reports by products sold). Bottom line, I love the software for super small businesses that aren't moving retail product, otherwise you could run into some issues that Wave is in no rush to fix.
Hi, @officerwbm.
Can you give me a bit more information about how you're handling invoice payments? In Wave as it is now, all you would have to do is delete the transaction that was uploaded from your bank account (since it should match the one from your invoice). You can also select both the transaction from your bank, and the one from your invoice, and merge them using the Merge button. We are looking to automate this merging process sometime in the future, but that feature isn't quite ready.
You can also wait for the transaction from your bank account to appear and then categorize that transaction as an invoice payment.
This isn't a bug within Wave, but rather a consequence of uploading your transactions automatically through a bank connection while also recording invoice payments on the Invoices page.
Our solution is to create a Cash and Cheque Received Account, which the invoice payment cheques are put into. Then once a month reconciling the bank upload transactions against this account. If there are multiple checks on a single deposit, it is always a confusion because the bank only shows that single amount but it is what it is.
That is essentially what we did as well dwarrilow2002. But the reports still are a problem since it combines both accounts. Rendering it useless. @ Alexia (Wave rep), doesn't having to delete the deposit that is downloaded defeat he purpose of downloading? In fact, I was told by several cs reps that this is something that IS A GLITCH and being worked on. As you can see from others that posted here, they were told the same thing. If something does not work as it was intended to work, then that would be a glitch in my opinion. The bank statement deposits DO NOT match the invoice amounts because most retail establishments, including ours, make bulk deposits. So all the checks/cash deposits from the day. The bank download is the total amount deposited for the day. So even if we wanted to delete the deposit, we would have to determine exactly which transactions/invoices were included on that deposit. This creates a lot more work than its worth. As mentioned above from a couple of us, we have had to create another account to remedy this, this solves the deposit problem however, creates the report issue. Any reports run combine all the accounts and you cant run reports on just a single account.
Hi, @dwarrilow2002 and @officerwbm.
@dwarrilow2002, thanks for sharing your solution.
We are working on a way to automate the process of merging transactions, but I don't have a timeline to give as to when this will be released. I understand that it isn't intuitive, but recording a payment for an invoice from the Invoices page will always create a transaction and your connection to your bank uploads every single transaction.
The best way to handle those cheques and cash payment would be to instead treat those payments as paid to Cash on hand. When they are deposited and that bulk deposit appears on your bank account in Wave, choose the bulk deposit for that day and categorize it as a transfer from Cash on Hand. It would not only prevent duplication but also account for the payments before they're deposited to your account.
The connection with bank does NOT upload every single transaction. That is the problem. It uploads the days transactions as a lump figure. Putting in invoices as cash on hand is an auditing nightmare. Also, doesn't not solve report issues. I have to guess at this point that no one will be contacting me to discuss the issues in details with possible solutions?
Hi @officerwbm.
Here's what I mean in using Cash on Hands to better handle receiving invoice payments in cash, or by cheque, and how to match it to bulk deposits through transfers. Following these steps will account for everything and ensure that the balance on your bank account matches up with reality. My assumption here is that the bulk deposits you've mentioned include both incomes in cheque and cash form.
Following these steps will ensure that you don't have to break down these bulk deposits into individual invoice payments and save you time, as well as prevent duplications.
For invoices payments deposited directly into your bank account (via credit or debit card), you can record payment to your invoice as normal, to your bank account. When the duplicate transaction is uploaded from your bank, select both of these transactions and click the "Merge" button.
Does this clear things up a bit better? Following these steps will take care of all duplication and make sure that your bank account and your reports are accurate.
Let me know if your payments by cheques aren't deposited as part of those bulk transactions, and I'll happily offer a different workflow to handle those.
That is more or less the way that we do it.
I received cash and then from this cash received I pay expenses. I then deposit the difference into a bank account. How do I reconcile this between my Cash on Hand and the income in the Bank Account, so that my Income is not reflected twice, i.e. in my Cash on Hand and in the Bank Account
Hi, @jojvr.
First, you'll have to record your cash sales to Cash on Hand. Then, you'll record expenses to that same account. When you make your deposit, you'll create a transfer from Cash on Hand to your bank account. To do this, just wait for the deposit to be uploaded from your bank and categorize it as "Transfer from Cash on Hand". Wave will take care of the rest.
@Alexia thank you. Please tell me why Wave is inserting an Invoice payment dated 2018.01.20 after 2018.06.20 and not in correct date order. I have printed the screen to show you but don't how to upload it.
@Alexia don't worry I figured it out, the invoice date was wrong. Thanks
@Alexia On a different subject all together, how do I handle the value of stock in wave. We buy tennis balls, but they are not used all at once. I do a stock take at the end of every month to count how many unused tennis balls we have and then I give them a value and need to capture that somehow on my Income Statement. So I take my income which is generated from people paying to play tennis, then I subtract the cost to buy tennis balls, then I subtract the value of open used tennis balls and then I add the value of unused tennis balls. This then gives me a net profit. How do I capture this in Wave
Hi, @jojvr.
I have the perfect Help Center article for you! Here's how we suggest handling inventory in Wave. You're absolutely on the right path.
The short version is this:
Try this out and let me know if you have any questions.
Hi @Alexia I am still not getting this right. I captured everything as instructed, well at least I think I did. But now on the Income Statement it shows my revenue for tennis balls sold (R 2850) and then under Cost of Goods Sold: Tennis Balls, it is deducting that same amount (R 2850). No where else on my Income Statement is it showing what was spent to purchase the Tennis Balls. Please help
Hi, @jojvr.
Here's the workflow, broken down further:
The reason why your leftover tennis balls aren't counted as profit is that they are not income, they represent inventory. This amount is not new money that you now own, but more product that you can sell and turn into money later down the road. If you were returning those to your supplier and got money back, then you record these as an income.
The balance sheet might actually be the report you're looking for.
Hi @Alexia ,
I will try this, but just to let you know, we don't buy and sell tennis balls to make a profit. We buy balls to use them to play tennis. We then sell the used balls, at a minimum price just to recover some costs. So we don't make revenue out of the balls.
Hi, @jojvr.
It would still look more or less the same, just with different numbers. The tennis balls you sell after the fact are only considered income once an invoice is created. Until you actually do sell them, they don't represent profit just yet, they're inventory.
In essence, until your client offers you money, there is no income to record.
@Alexia Thank you for your patience and help
No problem, @jojvr! Happy to help!
Hi is there a solution yet to the original issue?
"simply deleting the bank-imported transaction, and editing the Wave-created transaction's information to reflect the payment date as it appears on your bank statement."
This is quite a cumbersome solution and the wave-created transaction can't even be edited.
What's the ETA on this being fixed?
Would be great to be able to merge..
Thanks