Check not withdrawn from account yet - cash based accounting

tsmith

I understand that the IRS classifies a payment as complete when I hand the check to the vendor. So, that's a 2019 expense. It's marked paid in Wave. However, the vendor hasn't cashed the check, so on my bank statement, this will show up on Jan 2020. What's the best way to handle this for reconciliation, or does it even matter since I already have it marked paid and Wave account balances reflect that. (I don't have my bak account connected into Wave)

AlexL

Hi @tsmith . You can put this money into a Money in Transit account until the check is actually cashed. Check out the article here on undeposited checks.

Jimi_Fix

Moving money into the Money in Transit, then moving again seems like a lot of extra work. Why does the system not allow me to mark what has cleared the bank and reconcile that to what the balance should be? I have 4 debits/credits that have not cleared in December. From what I am reading, is that all debits/credits should be moved into the Money in Transit and then moved to the checking when it is cleared. This would remove the uncleared transactions, but creates a lot of work throughout the month to do this for every transaction.

Barsin

Hey there @Jimi_Fix

At the present moment this is how to account for undeposited checks at the moment. Our accounting team is aware of this process and hoping to streamline things for future updates. At the present moment our new reconciliation upgrade uses the real-time amount brought in by your bank connection to ensure a reliable balance is recorded.

Thanks for bringing this to our attention though!