Money in Transit

Jesper666Jesper666 Member Posts: 32

I am in the resort scuba diving business. So for one i work with online hotel agents like Agoda.com, Booking.com and Expedia.com. I also work with my own online travel agency for my own bookings.

I had an idea of using Assets (Money in Transit) for these things. This because i get paid on a monthly basis from the hotel agents. And also a lot of my own bookings do not pay me right away. Or they pay a deposit only for their booking.

Now i see when using this that is not that easy. So i have a few questions below here!

  1. Assets (Money in Transit) When i get a booking for any hotel agent. Can i put this in Assets (Money in Transit) until i get paid in the end of each month? If this would work how should i make this in a correct way? I have setup three accounts under Assets (Money in Transit), Agoda.com, Booking.com and Expedia.com already. Is this the correct way of doing this? Or should there be only one account for this?

When i read about this it seems this is more for Payments in Wave. Is this only for use when using payments in wave or can i use this manually as well?

  1. Assets (Expected Payments from Customers) This is the same things but instead of the hotel agents i would use this more for my own bookings from my online travel agency. People book with us and they pay a deposit only for their booking. The rest is paid when they arrive later. People owe us money for their bookings. Is this the correct way of doing this?

So i need help too understand how to use these accounts. And if this is possible first of all. And of course how should i work this system so everything is done correctly.

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  • AlexiaAlexia Administrator Posts: 3,315 admin

    Hi, @Jesper666,

    I haven't done gone scuba diving in years! I hope I'll be able to do it again soon.

    Money in Transit represent money that's yours but hasn't made it to your bank account yet. So, for example, if you accepted an online payment, the money from that payment would go to a Money in Transit account until it's deposited into your bank account.

    They are most commonly used to help handle merchant fees for payment processors or commissions from agents. If you make an invoice for $100 and Expedia takes a $5 cut, you want to record the full payment, account for Expedia's fee, and make sure the deposit in your bank account matches your bank statement. So you would record the full payment for your invoice to the Expedia.com account, then record an expense to that account for $5, and finally transfer the remaining $95 to your bank account.

    In short, it's money that was paid to you but hasn't quite made it into your account yet. It's a cheque that in the mail.

    Accounts Receivable represents money owed to you for service rendered. Technically speaking, this money is only owed to you if the client shows up for their booking so you wouldn't put an amount in that account until then. If you were making an invoice, the invoice's date should be the day at which your client shows up at your front desk.

    If you're looking for a good place to get started with Wave, I strongly recommend checking out Fearless Accounting, our own guide to best practices with Wave. You can find it here.

    Let me know if you have any questions

  • Jesper666Jesper666 Member Posts: 32

    Alexia you know where we are. And the diving is very good and easy here!

    These online hotel agents are hard to work with. But the way i like to setup my accounting is to use Money in Transit. This way i have a more clear picture of what Expedia owes us per month. Instead of logging into their web site and make an invoice for our payment per month. It is enough for me to do this one time per month for our payment. Not doing it several times to see what we have accumulated each month.

    When i settle the Money in Transit each month. How would i make this transaction? Since i have both income and expenses for this! Or how would i move the money from Money in Transit into the right account when the money have arrived in our bank account? I need to move this income into my income/Accommodation account. and the other into expense/agent commission account.

    To make this work would i need also to attach my bank account to Wave? Or can i do this manually without having my bank account attached to Wave?

    Or you have any better solution for us here Alexia? I am all ears since i am very new to this kind of accounting.

    Accounts Receivable. Yes we do make invoices for people who book diving, accommodation and other stuff from us. Most people would pay a deposit for this. So i record the deposit where? Into the right account straight away? And could i put the remaning balance into Accounts Receivable? Forward the date on the invice too the date when they will arrive also.

    o make this work would i need also to attach my bank account to Wave? Or can i do this manually without having my bank account attached to Wave?

    Or you have any better solution for us here Alexia? I am all ears since i am very new to this kind of accounting.

    Thanks for al your help so far and i hope to hear from you soon again.

    @Alexia said:
    Hi, @Jesper666,

    I haven't done gone scuba diving in years! I hope I'll be able to do it again soon.

    Money in Transit represent money that's yours but hasn't made it to your bank account yet. So, for example, if you accepted an online payment, the money from that payment would go to a Money in Transit account until it's deposited into your bank account.

    They are most commonly used to help handle merchant fees for payment processors or commissions from agents. If you make an invoice for $100 and Expedia takes a $5 cut, you want to record the full payment, account for Expedia's fee, and make sure the deposit in your bank account matches your bank statement. So you would record the full payment for your invoice to the Expedia.com account, then record an expense to that account for $5, and finally transfer the remaining $95 to your bank account.

    In short, it's money that was paid to you but hasn't quite made it into your account yet. It's a cheque that in the mail.

    Accounts Receivable represents money owed to you for service rendered. Technically speaking, this money is only owed to you if the client shows up for their booking so you wouldn't put an amount in that account until then. If you were making an invoice, the invoice's date should be the day at which your client shows up at your front desk.

    If you're looking for a good place to get started with Wave, I strongly recommend checking out Fearless Accounting, our own guide to best practices with Wave. You can find it here.

    Let me know if you have any questions

    edited September 19, 2018
  • AlexiaAlexia Administrator Posts: 3,315 admin

    Hi, @Jesper666,

    One day, maybe I'll get to visit, but for now, my vacation funds are dreadfully low!

    Recording payments to Money in Transit

    The amount you'll record here for a payment is always going to be what the client paid. To use my example from above, if your client is paying $100, then that's what you'll record to this account. This is income from your sale, so you categorize this payment to the appropriate income account.

    You'll then make an expense transaction for the amount of the merchant's fee ($5 in my example) with Money in Transit as the payment account and "Merchant's fee" or "Expedia's fee" as the category. The category here is an expense account.

    When the money is deposited to your account, make a transfer for that amount from Undeposited Funds to your bank account. Here's how to make a transfer in Wave. That can absolutely be done manually if that's how you prefer to handle your books.

    Handling deposits

    That largely depends. Can that deposit be reimbursed at all? If it isn't, you can just mark it a payment to your invoice, since it is, by all accounts, yours. If it is reimbursable, it's a bit more work to handle. Let me know and I'll be happy to get into it.

  • Jesper666Jesper666 Member Posts: 32




    Ok just too make sure i make this in the right way and order Alexia!

    1. I make an invoice to Jesper Nyqvist or to Expedia.com?
      I fill in for example 10 night for a Double Room. Then i save this invoice as it is. Should next step be recording a payment for this invoice? If so payment method should be bank transfer?
      Payment account should be Expedia.com that is under Money in Transit? I move the date forward to date of payment which is in the end of the month.

    2. Under transaction, deposits or withdrawal! Should i change this from deposit to withdrawal so i can transfer this to my bank account correctly? If i don’t change this this option will not show up.
      Then i get a new transaction from this. Have all this been recorded correctly under each account for me or not? Meaning our sales have been recorded under sales accommodation, Money been hold in Money in transit at the start.
      Then they been moved into our bank account when they arrived their correctly Alexia?

    3. Then under invoices it says invoice is not not paid yet. So here i record the invoice? Payment method bank payment and payment account would be my Bank account PHP, Thats it for this?

    I just want to make sure i am doing this correctly before i start using this option.

    @Alexia said:
    Hi, @Jesper666,

    One day, maybe I'll get to visit, but for now, my vacation funds are dreadfully low!

    Recording payments to Money in Transit

    The amount you'll record here for a payment is always going to be what the client paid. To use my example from above, if your client is paying $100, then that's what you'll record to this account. This is income from your sale, so you categorize this payment to the appropriate income account.

    You'll then make an expense transaction for the amount of the merchant's fee ($5 in my example) with Money in Transit as the payment account and "Merchant's fee" or "Expedia's fee" as the category. The category here is an expense account.

    When the money is deposited to your account, make a transfer for that amount from Undeposited Funds to your bank account. Here's how to make a transfer in Wave. That can absolutely be done manually if that's how you prefer to handle your books.

    Handling deposits

    That largely depends. Can that deposit be reimbursed at all? If it isn't, you can just mark it a payment to your invoice, since it is, by all accounts, yours. If it is reimbursable, it's a bit more work to handle. Let me know and I'll be happy to get into it.

    edited September 22, 2018
  • AlexiaAlexia Administrator Posts: 3,315 admin

    Hi, @Jesper666,

    Your invoice payment should be recorded to your Expedia transit account once your clients have paid that amount. That amount shouldn't be made into a bank transfer. You'll have to make another transaction for the bank transfer. You should have 3 transactions in your Transaction page:

    • Payment for the invoice, an income to Expedia for Php19,500
    • The part of the transfer coming from Expedia, an expense categorized as a transfer for Php19,500
    • The part of the transfer going to your bank account, an income categorized as a transfer for Php19,500

    The transfer and the payment for your invoice are two separate procedures entirely. If you don't record the payment to your Expedia account before the transfer, you'll end up with a balance of -19,500 to that account.

    The invoice is marked as unpaid because, when you changed the category away from "Payment for invoice #1", it unlinked that transaction from the invoice.

    Does that make more sense?

  • Jesper666Jesper666 Member Posts: 32

    Hello Alexia!
    Could you please show me one time with screen shoots how you will make this.

    • Payment for the invoice, an income to Expedia for Php19,500
    • The part of the transfer coming from Expedia, an expense categorized as a transfer for Php19,500
    • The part of the transfer going to your bank account, an income categorized as a transfer for Php19,500

    The second part here i do not get from you. (transfer coming from Expedia, an expense categorized as a transfer for Php19,500)

    @Alexia said:
    Hi, @Jesper666,

    Your invoice payment should be recorded to your Expedia transit account once your clients have paid that amount. That amount shouldn't be made into a bank transfer. You'll have to make another transaction for the bank transfer. You should have 3 transactions in your Transaction page:

    • Payment for the invoice, an income to Expedia for Php19,500
    • The part of the transfer coming from Expedia, an expense categorized as a transfer for Php19,500
    • The part of the transfer going to your bank account, an income categorized as a transfer for Php19,500

    The transfer and the payment for your invoice are two separate procedures entirely. If you don't record the payment to your Expedia account before the transfer, you'll end up with a balance of -19,500 to that account.

    The invoice is marked as unpaid because, when you changed the category away from "Payment for invoice #1", it unlinked that transaction from the invoice.

    Does that make more sense?

  • AlexiaAlexia Administrator Posts: 3,315 admin

    Hi, @Jesper666,

    Sure thing, here are the screenshots...

    The payment for the invoice:

    The side of the transfer from the bank's side:

    The other side of the transfer:

    A transfer is made of two transactions since the money is leaving one account and going to the other: one to your Expedia account (the money leaving that account) and one to your bank account (the money is going there).

  • Jesper666Jesper666 Member Posts: 32

    Thank you Elexia! Your the best.

    @Alexia said:
    Hi, @Jesper666,

    Sure thing, here are the screenshots...

    The payment for the invoice:

    The side of the transfer from the bank's side:

    The other side of the transfer:

    A transfer is made of two transactions since the money is leaving one account and going to the other: one to your Expedia account (the money leaving that account) and one to your bank account (the money is going there).

  • Jesper666Jesper666 Member Posts: 32

    One last questions for you Alexia!
    1. There is one more transaction needed here or not!
    i record a payment of $100 from Expedia.com. This is what the client paid. But then we also need to make an expense transaction for the merchant fee of $5. Where and how is the easiest way to make this after the 3 other transactions are made? Can you please give an example of this as well.

    1. Accounts Receivable!
      Should this be done exactly the same way as we do above here with the example of Expedia.com? Or is there another easier and better way to do this?

    The only difference here what i can see is the deposit made for the customers booking! These deposits will not be reimbursed. They pay a deposit for their booking, non refundable. Can you please give an example of this as well.

    @Alexia said:
    Hi, @Jesper666,

    Sure thing, here are the screenshots...

    The payment for the invoice:

    The side of the transfer from the bank's side:

    The other side of the transfer:

    A transfer is made of two transactions since the money is leaving one account and going to the other: one to your Expedia account (the money leaving that account) and one to your bank account (the money is going there).

  • Jesper666Jesper666 Member Posts: 32

    @Jesper666 said:
    Thank you Elexia! Your the best.

    @Alexia said:
    Hi, @Jesper666,

    Sure thing, here are the screenshots...

    The payment for the invoice:

    The side of the transfer from the bank's side:

    The other side of the transfer:

    A transfer is made of two transactions since the money is leaving one account and going to the other: one to your Expedia account (the money leaving that account) and one to your bank account (the money is going there).

    One last questions for you Alexia!
    1. There is one more transaction needed here or not!
    i record a payment of $100 from Expedia.com. This is what the client paid. But then we also need to make an expense transaction for the merchant fee of $5. Where and how is the easiest way to make this after the 3 other transactions are made? Can you please give an example of this as well.

    Accounts Receivable!
    Should this be done exactly the same way as we do above here with the example of Expedia.com? Or is there another easier and better way to do this?
    The only difference here what i can see is the deposit made for the customers booking! These deposits will not be reimbursed. They pay a deposit for their booking, non refundable. Can you please give an example of this as well.

  • CharlotteCharlotte Administrator Posts: 693 admin

    Hi @Jesper666 ! We have a guide for handling deposit payments, which you can find here.

  • Jesper666Jesper666 Member Posts: 32

    Ok thank you!

  • Jesper666Jesper666 Member Posts: 32

    @Charlotte said:
    Hi @Jesper666 ! We have a guide for handling deposit payments, which you can find here.

    But this is more of what i need to know actually!
    Accounts Receivable!
    Should this be done exactly the same way as we do above here with the example of Expedia.com? Or is there another easier and better way to do this?
    The only difference here what i can see is the deposit made for the customers booking! These deposits will not be reimbursed. They pay a deposit for their booking, non refundable. Can you please give an example of this as well.

  • JamieDJamieD Administrator Posts: 650 admin

    Hey @Jesper666 ! Based on what Charlotte said in terms of following the help centre article listed above, it would be the essentially the same steps in terms of collecting the deposit as non-refundable income. You will need to mark the invoice as partially paid (with the non-refundable deposit as a line item) and then it would be accounted for (there is no further action needed here since it's not a reimbursable expense).

  • Jesper666Jesper666 Member Posts: 32

    @JamieD said:
    Hey @Jesper666 ! Based on what Charlotte said in terms of following the help centre article listed above, it would be the essentially the same steps in terms of collecting the deposit as non-refundable income. You will need to mark the invoice as partially paid (with the non-refundable deposit as a line item) and then it would be accounted for (there is no further action needed here since it's not a reimbursable expense).

    Thanks Jamie!

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