Recording international bank transaction fees
Jivre
Member Posts: 2
I just started using Wave, and while it looks good on the tin, I feel like I have to jimmy-rig everything to make it work the way I need for my business. I have almost only clients from outside my country of work (South Korea). This almost always involves a transfer fee, so I am trying to find a good way of recording that in Wave.
It's been a while since I last took an accounting class, but if I were to note this down the whole process would ideally look like this (I know Wave handles Currency loss and gain so I'm disregarding that here):
Send invoice:
Account Receivable: +1,200,000KRW (Debit)
Research Sales: +1,200,000KRW (Credit)
Payment received
Account Receivable: -1,200,000KRW (Credit)
Checking Account: +1,100,000KRW (Debit)
Transfer Fees: -100,000KRW (Debit)
I followed this advice to set up a Holding Account (as an Asset) and then made a withdrawal from there to represent the transfer fee. This seems to give a process that looks something like this:
Send invoice:
Account Receivable: +1,200,000KRW
Research Sales: +1,200,000KRW
Payment received
Account Receivable: -1,200,000KRW
Holding Account: +1,200,000KRW
Recording Transfer Fee
Holding Account: -100,000KRW
Transfer Fees: +100,000KRW
But now I don't understand how to record a transaction from the Holding Account to my bank Checking account, like so:
Holding to Checking
Holding Account: -1,100,000KRW
Checking Account: +1,100,000KRW
So I guess the problem here is: How do I record a transaction between two Asset accounts? Or is there an easier way to do this whole process? Or have I misunderstood something and let down my old accounting professor?
Comments
Hi @Jivre , thanks for your message and taking the time to investigate!
I think the simplest solution to this would be to split your deposit transaction. One split would be the gross deposit (categorized to an income category), the other split would be the fees (categorized to an expense category, which would make it automatically negative), and the total amount on the whole transaction would be the net deposit. Learn more here!
Hi, thanks for the reply.
This does not fix the issue, as the Holding Account is left untouched. I want the Holding Account to be at 0 once I have moved the money from there to checking. To illustrate with the sums above, I end up with 1,200,000 in my Holding Account, and 1,100,000 in my Checking Account which means Wave tells me that I have 2,300,000 in my asset accounts, which is just way off.
Hi @Jivre , Thanks for messaging me back! I'm sorry, I misunderstood the previous comment there. It sounds like you have a great grip on what to do for the beginning and middle steps, and that the part you're having trouble with is the final step: recording the transfer from Holding to Checking, is that correct? If so, here's how to do that:
If this is not what you meant, please let me know - I'm happy to help!