True split transactions
Traek
Member Posts: 4
While I think I am familiar with the split functionality, there are use cases in my business that I would like to share to see if it is possible to achieve with Wave.
As a real estate agent, I often have a single transaction -- a deposit -- hit my business checking account that actually contains several transactions inside of it. These transactions typically include:
- Income - Commission
- Income (negative) - Co-broke "fee". This is not an expense -- more on this in a minute
- Several expenses - Usually transaction fees (e.g. errors and omissions insurance, transaction coordinator/admin fee, technology fee balance, etc.).
The single imported transaction therefore consists of both debits and credits or to your terminologies: withdrawals and deposits or expenses and income. This is extremely common for real estate agents, certainly one of the biggest use cases in the US for small business owners. I'm not sure how many other professionals see these kinds of transactions and how often.
Your current implementation -- unless I'm just not figuring it out -- only allows me to show multiple categories of the same type of transaction. This can be useful for cases where you need to track, say, sales tax or you itemize your trip to Costco. I really look for excuses to use the current implementation and really only have had one or two cases. The first use case I shared here is something I see every month -- and if I'm doing my job right -- multiple times a month.
One other thing: this co-broke fee is an issue. In QuickBooks Self-Employed edition (which I still pay for because Wave can't cut it) I am able to use a category against any type of transaction. Take my Commission Income for example:
Say I have $6,425.00 commission check deposited in my account. I might see a check stub the next day that breaks down the amount like this:
- $7,500.00 Gross commission ($250,000.00 sales price @ 3%)
- -$750.00 Broker split (90/10)
- -$50.00 E&O fee
- -$250.00 Transaction Coordinator fee
- -$25.00 Technology Fee balance
- =$6,425.00 net commission
The problem is I have an imported transaction that can't reflect either the $7500 gross commission or the more accurate $6,750 in my commissions (since I am not the one paying the broker; it's actually the other way around). So I have to take a $6,425.00 transaction and either change it to $6,750 in commissions and add 3 new Expense transactions or just throw away the imported Income transaction altogether. This makes reconciliation a bit of a nightmare to say the least!
Even if I were able to do all the above, I'd still like to better deal with that $750.00 Broker split. Again, with QBSE I am able to use Commission Income on an expense (technically, I suppose, it is a negative income amount). Right now, I would like that as a -$750.00 "income" so the books show that I really only received $6750 in income. While we can talk about who is issuing 1099s and what is the legal requirement, that's beside the point. The real issue is: I don't have a way to deal with reducing a category using a negative number, even if Wave allowed the mixing of transaction types in a split.
Sorry if this is overkill but I wanted to be specific and fully describe a common use case that applies an extremely large potential user segment (at least in the United States).
So I'm really trying to help you understand two things I need to better track a very common transaction type for a very common use case:
- Allow a transaction to be split into both Income and Expenses (or Deposits and Withdrawals... heck, go for broke here and use this opportunity to standardize your nomenclature!).
- Allow the entering of negative values for any category so it can adjust a category on your books. Real accounting ledgers allow this, mostly using this same approach but I'm good with however you think is appropriate.
Does all of this make sense!?
Also, please accept my most humble of apologies if either (or both) of the above two requirements are already available and I'm too old/tired/lazy to have been able to find it. I promise I tried!!! Thanks!
P.S. The real crux of this whole request in the first place is being able to track the paperwork for this transaction inside of Wave. To do this, I need to add the aforementioned check stub to one transaction. This means all of the work that goes in to this final check needs to be reflected in not just the splits themselves, but I suppose I have a last (but lower-priority) requirement:
- Allow direct attachment of receipt to existing transactions (split or otherwise)
Comments
Hi @Traek . I'm gonna do my best to answer your questions here.
1. & 2. I'm afraid you can't split transactions themselves to become incomes and expenses, BUT you can add a negative line item to your Income transactions (deposits) which essentially does this for you (but houses it under the same transaction. This method is typically used when accounting for transactions fees from an outside merchant, but you should definitely be able to tweak it to help out in this situation. Check it out in our Help Center article here.
3. This is definitely a request we get from time to time. It's something that we've looked at implementing in the past, and it's still something that we look at on a regular basis. Unfortunately, it isn't on our current roadmap for the near future, but I do know that this is something that the team will be looking to prioritize. Thanks for the feedback on this.
unfortunately it no longer lets you add a negative line. I just tried. I like to keep record of the merchant account fees, because they do not form part of the transactions automatically brought from the bank statements.
Hey @stefanie! You can still keep a record of the merchant account fees! To create a negative line in the transaction split, select the category 'Discounts and Fees' from the dropdown. You can then select a relevant expense account for the merchant account fees (or create one if needed). You'll just have to follow the steps in this Wave guide: How to account for transaction fees. Hope that helps!