How to categorize interest earned in a business checking account.
ltj2021
Member Posts: 2
I have recently switched to a new business checking account that earns interest. I am not really sure how to categorize it in Wave. None of the categories seem to fit.
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Hey @ltj2021 !
Great question. What you'll need to do is split any expense transaction that contains interest to identify and account for the interest separately. We have a great Help Center article that you can shed some more light on this here. Despite the article addressing loans, the workflow will still apply.
hey there @ltj2021 !
I don't think @JulianP answered your question correctly, so I just thought I would help you out. I'm not sure how your bank labels interest deposits in your account, but ours lists them as Dividends. Wave has a category under Income as "Dividends from XXXX". This is the label you are looking for! Hope that helps!
The whole point of using an accounting package is to organise your Revenues and Expenses. And Revenues minus Expenses equals Profits for the period.
So just post your interest earned as a refund to your interest Expense account. The arithmetic works out the same. Unless you earn significantly more than your other banking expenses there is no issue.
Keep it Simple!