Accounts Receivable Workflow

Handyman615

I could use some guidance on what my SOP should be for entering AR transactions.

I am not using Wave's invoicing or payment features, that is all handled elsewhere.

What I expected to do was to go to Accounting>Transactions>Add Income, select the Accounts Receivable as the account (since it is an asset account), and select Job Income as the category. Then after the invoice is paid and I actually receive money, it would go from the Accounts Receivable asset account to the particular bank account that it is deposited to.

Instead, I can't select the AR account from the account drop down when adding income, only bank/cash/money in transit/etc. The AR account shows up in the category section.

Should I be using journal transactions to enter these? Is there something I'm missing in the way I'm looking at it? Essentially I view the AR account as a sort of 'Money in Transit' account, so I expected it to be similar to when I book income to my CC payment processor before I actually see the deposit in my account.

Any guidance on how to either do this differently, or change my perspective so this makes sense to me?

Many thanks!

Handyman615

Ok, so I'm not sure if this is the best way to handle things, but here's my current workflow...

• Send Invoice
• Create Journal Transaction debiting AR and crediting Job Income for the invoice amount
• Client pays with card
• Add Income debiting CC processing account and crediting AR
• CC Processor deposits to my actual bank account
• Create Journal Transaction debiting bank account & expense account for net deposit/CC fees and crediting CC processing account

Is there a better way of handling this process?

AlexL

Hey @Handyman615 , I'd recommend reaching out to an accountant because as much as I'd like to say that this makes sense to me (it looks good in my opinion) I'm not an accountant and they'd be able to confirm or deny your process as being acceptable. As I did mention, this looks good, but I'd hate to lead you down the wrong path because I don't have a full understanding of your situation.

Handyman615

Thanks, @AlexL - I think I'll stick with this method for now. I was more interested in whether or not there was a better way to book income into Accounts Receivable within Wave than what an accountant might consider 'proper', so your affirmation that this makes sense to you confirms there probably isn't a more streamlined workflow.

This method has been working well for getting my reports to reflect numbers as expected on an accrual basis, even though it is more steps than I expected it to be at first glance.

Thank you!