General Ledger beginning balances that aren't zero

daviderik

A note from my accountant (who has access to wave):

Something in Wave is bugging me. In the income and expense accounts, when I look at the general ledger, there are beginning balances that aren't zero. It does look like the profit and loss is correct, and I'm wondering if Wave makes you close the previous year out in their software somehow to start the profit and loss accounts back at zero. Some older style software packages do that.

Is there a way to reset to zero or is there an explanation i can provide him??

BRANDY2020

I have the same question. Did you get a reply? Thanks Irma

daviderik

Nothing so far. From some google hunting it looks like this might just be an older style of accounting and there is no way to Zero things out. Hoping someone will chime in.

SpPAP12_

I have the same question...from my experience, income and expense accounts should zero out at the end of the fiscal year (Dec. 31). I would like to zero out these accounts. And as someone who may be forced out of Wave because of their recent policy of not working with organizations outside the US, I am concerned that these "starting balances" may mess up export of data to Zoho. I hope someone on the Wave Team can address this issue.

RajN

So will all my transaction accounts zero out in 2021? But I can still go back and do entries for 2020?

JulianP

Hey everyone!

So there's a balance on your reports since in Wave, there is no need to close out the year!

Other accounting platforms don't allow you to touch historical data, but in Wave, you can pull up reports and make adjustments at any time. This means that your previous years never really "close". All that happens at year-end is that current year earnings get zeroed and added to previous year earnings.

At the start of your new fiscal year, you will see your new previous year earnings balance, fresh income and expense account balances, and your usual bank account balances.

What Wave doesn't do is put those amounts under a common account, such as retained earnings, that you can post transactions to. If you want your previous year income/loss to roll forward into retained earnings, you will need to manually do this. Here's how:

1. Run an income statement for the year. This will give you all of your income and expense final balances.
2. Save this statement in excel or a PDF so you have all of the balances saved.
3. Click Accounting > Transactions > More > Add journal transaction.
4. Enter the balances as opposite of how they appeared on your income statement.
5. Note that the amount of Net Income on the Income Statement matches the amount of the debit to Owners Equity.