Bookkeeping changes to Payments by Wave

SystemSystem Posts: 270 admin

imageBookkeeping changes to Payments by Wave

You’re sending out invoices, and you’ve set up online payments. You’re all set to take payments with Wave – but what about the bookkeeping? Payments by Wave's new auto-reconciliation makes tracking...

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edited November 29, 2018 in Help Center Discussion
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  • accountsoohqooaccountsoohqoo Member Posts: 1

    The idea is good. But the function is crap. When it split the payment, it doesn't take account of gst component in the merchant fee. The payment recorded in payments by wave cannot reconciled to the actual payment received shown on the bank statement. This is a stupid mistake.

  • DWPSoundsDWPSounds Member Posts: 3

    I think it would be preferable to have these three transactions merge automatically so it doesn't look you've been paid three times and question the numbers in your balance. It's just odd to see three transactions for the exact same amount in your registry, which usually screams accounting error.

  • Ryan_WRyan_W Administrator Posts: 462 admin

    Hey @accountsoohqoo, what you've identified is a known issue with how the auto-reconciliation works with Stripe's application of the separate tax on the merchant fee. You can read more about why this is, and how to work around it in this thread.

  • bonnydbonnyd Member Posts: 5

    This is stupid. I cannot move this to my main account and it stays in payments ecd by wave. why it is cash recd against an invoice.

  • NgaireNgaire Member Posts: 3

    This would be so much better if the transaction was done once only when the money reaches the bank account. Mark the invoice as Paid in Wave, but one transaction only, which includes taking into account the gst component in the merchant fee.

  • CBMCBM Member Posts: 1

    My invoices paid through Wave are saved in an account called "Payments by Wave" rather than my actual bank account where they are deposited - and it's not possible to edit a paid invoice. This is causing my accounts to be unreconciled indefinitely - any advice?

    JK I figured it out - creating them transfers.

    Fingers crossed now that my main bank account is linked the new integration will cover this for any future Wave invoice payments.

    edited March 2, 2019
  • Ryan_WRyan_W Administrator Posts: 462 admin

    Hey @bonnyd, if Wave isn't automatically detecting the bank-imported transaction, which then creates the transfer automatically, it's likely that your bank is modifying the transaction descriptor.

    Wave is looking for the standard WAVSV9Txxxxxx to automate the transfer; if your bank is changing the descriptor, you'll need to categorize the bank imported transaction as Transfer from Payments by Wave, which is what it sounds like @CBM figured out before. Hope this helps!

  • aj2468aj2468 Member Posts: 3

    A visual of this process would be much more beneficial for me. :)

  • SophiaSophia Administrator Posts: 147 admin

    Hey @aj2468 I took a moment to create some screenshots for you :)

    When the transaction is imported via your bank connection, it will most likely be uncategorized because in this case, Wave doesn't seem to recognize it. Select the category dropdown and choose "transfer from Bank, credit card, or loan."


    Then select "payments by wave" as the account, and save the transaction.
    Let us know if that works for you!

  • EmotionalHealthLtdEmotionalHealthLtd Member Posts: 9

    Why were we not advised through email of this
    Why is it not easy to find in the help text
    I could not work this out for myself
    The bookkeeping changed overnight, surely an email would have been possible
    Now I have deleted the bank transactions from Stripe because that was the previous way to avoid duplication

  • SeanbtySeanbty Member Posts: 2
    Is there a way to reconcile sales receipt to the bank deposit? I have a big deposit in my bank account but I can’t identify which invoice payments it pertains to.
  • ZoeCZoeC Administrator Posts: 389 admin

    Hey @Seanbty, thanks for reaching out! If you have a large bank transaction that covers multiple invoice payments, you can split the transaction and categorize each split as Payment Received for an invoice in Wave, your unpaid invoices will appear and a list and selecting them will mark them as paid. I hope this helps, please let me know if you need anything else.

  • ZeaferZeafer Member Posts: 6

    A customer paid their invoice via Stripe. Payment and fees recorded, all good.

    But the customer cancelled their order, and the payment was refunded via Stripe. How do we properly record the refund and reverse this income?

  • BarsinABarsinA Administrator Posts: 511 admin

    Hey there @Zeafer

    So the first transaction should likely be a split transaction accounting for your fees. This image should illustrate what it looks like after you've accounted for your stripe fees:

    So my business checking only received $97 but the income was for $100 - $3 (fees). You can see this with the split deposit feature tool built into the transaction details panel. The $3 is a negative amount categorized under discounts and fees > Payment processing fees.

    The refund should look similar:

    The refund would show up as a $100 withdrawal (if you're not incurring the stripe fees, and everything is being returned) but similarly the split withdrawal feature would show $97 being refunded from my income account, as well as the + $3 for payment processing. Notice that this is not a negative value anymore, as it's being added back to the total expense of $100.

    Hopefully this gives you a bit more context as the what this transaction should look like!

  • emily_temily_t Member Posts: 3

    I just tried this - uploaded my bank statement - and it did not automatically fix my bookkeeping records for the Wave invoice payments.

  • scrapperukscrapperuk Member Posts: 1

    This is really, really confusing... I'm catching up with transactions after a few months away and its took me a while to realise my Wave transactions are now in another account after they weren't visible in Bank Reconciliation, but the instructions above really aren't clear and things certainly don't seem to be as easy as suggested above (i don't have a connected bank account, so there aren't any automatically created deposits to connect together)- is there a video that can be produced to help with this?

    edited August 11, 2019
  • BarsinABarsinA Administrator Posts: 511 admin

    Hey there @emily_t @scrapperuk

    With regards to accounting for payments, when you upload your transactions to Wave using the CSV uploader, is there a Wave transaction with the code SV9T in it anywhere? If so this should automatically create a transfer from your holding account (Payments by Wave).

    The way our payments by wave system works is as follows:

    1) You send an invoice, and the client pays the invoice. This will appear as a non-editable transaction on your transaction page made to an invoice #______. These funds are then put into a holding account called Payments By Wave.

    2) The funds eventually reach your actual bank account, and your bank imports a transaction via the bank connection as another income. This would be called WAVE SV9T or some similar code. It will be categorized as what looks like a second income.

    3) A third transaction appears as a transfer. This essentially shows that there have been funds transferred from the holding account to your payments account.

    How are your transactions showing up as when you upload the transactions? Any screenshot would help give us some visuals as well.

  • iopheamiopheam Member Posts: 1

    Do I need to do the account reconciliation for Payments by Wave account? If yes, it asks me for Ending balance amount for a month and I don't know where to get that info from.

  • DoraDora Member Posts: 2

    I can't figure out what to categorize the withdrawal from "Payments by Wave" account.

  • PaigettiePaigettie Member Posts: 6

    The only problem is that now I have payments showing up as income twice because the automatic transactions can't be merged with the bank transaction. I'm working on this with a customer service team member, but I can't imagine I'm the only person experiencing this. Basically, anyone that pays online, I show double income rather than what it actually is.
    I personally feel like this has complicated the book keeping and not made things better or easier. My husband has his account on the old system still and it works flawlessly to merge the invoice payment with the bank transaction and the amounts are a match because the merchant fees are a separate transaction. It's kind of like fixing something that isn't broken, and ending up breaking something that didn't need fixed.

  • JamieDJamieD Administrator Posts: 1,117 admin

    @iopheam This is totally optional for you, since it's technically just a holding account.. my assumption is that you wouldn't necessarily need to do this for your business. The account is essentially just Accounts Receivable -- once the funds are incoming to your business, and then actually land in the bank account, you simply just need to categorize them as a transfer from Payments by Wave as the article suggests.

    @Dora If it's a withdrawal, it's more than likely a refund so you would want to categorize it as a refund for the specific invoice that was paid via our processing. If I'm way off here, could you please elaborate a little more in terms of what the transaction looks like? (perhaps a screenshot would help).

  • PaigettiePaigettie Member Posts: 6

    @Barsin said:
    Hey there @Zeafer

    So the first transaction should likely be a split transaction accounting for your fees. This image should illustrate what it looks like after you've accounted for your stripe fees:

    So my business checking only received $97 but the income was for $100 - $3 (fees). You can see this with the split deposit feature tool built into the transaction details panel. The $3 is a negative amount categorized under discounts and fees > Payment processing fees.

    But if you go into your reports, your income loss report will now show income as $197 for those two transactions because they can not be merged. Add multiple transactions and you have a mess!

  • DoraDora Member Posts: 2

    @JamieD
    Hi. It's not a withdrawal but one of the automatic entries from Payments by Wave. Would I categorize it as Transfer to Checking?

    wave.pdf 166.2K
  • JamieDJamieD Administrator Posts: 1,117 admin

    @Paigettie In Barsin's example above, it would only be 1 specific income transaction showing in the account. If there are two transactions total, (one for the invoice payment and one for the bank deposit transaction), you will need to go through the holding account process that's listed above. Alternatively, you should be able to delete the transaction that's associated with the invoice and follow the steps Barsin outlined (creating the income transaction and accounting for the Stripe fees that way).

    @Dora Do you have another transaction that is the actual deposit into your bank account rather than just the holding account? It puzzles me that there would be a second transaction there without the actual transfer to your bank account. The workflow should have a bank deposit transaction, which then, would be categorized as a transfer from Payments by Wave -- and the second half of the transaction automatically categorized.

  • PaigettiePaigettie Member Posts: 6

    I just have to say after working with this "new" system for a little bit, I dislike the way it's cluttered my transactions section so much, I'm basically now searching for something else to do my book keeping. I'm envious of my husband who is still in the old format, but I have to say, once it's all integrated, since I do his book keeping because he's already overwhelmed by taking care of the numbers, he'll eventually leave WaveApps too. I get that this is supposed to be a good feature, but I stand by my opinion: it's made things worse, not better. I'm done.

  • ChelseaKChelseaK Administrator Posts: 264 admin

    @Paigettie Sorry to hear that you're finding it difficult to adjust to the newer version of Wave. Is there anything specific I can help you with? I'd be happy to assist with navigating the new terrain. Is it the new Payments by Wave bookkeeping process specifically that feels cluttered?

    The new Payments by Wave bookkeeping is meant to show the flow of funds between your Payments by Wave holding account and your checking account. This accurately reflects where the funds are when they are in transit. Let me know if you'd like any clarification around this. I do get that new workflows take some adjusting though. <3

  • PaigettiePaigettie Member Posts: 6
    No, it's been mostly good so far, and honestly, since I decided to look for something else I'm being reminded of ask the things I LOVE about Wave.
    The frustration I have is that for me, I have very few transactions outside of getting paid, so for me, I went from having (as an example) 30 transactions (25 paid invoices and 5 bills) to having 80 transactions (25 paid invoices, 25 wave transfers to bank, 25 bank deposits, and 5 bills) I Used to have 25 invoices plus 25 bank deposits (that I could merge together or delete the bank transaction because it was already accounted for) and keep at 25 transactions plus 5 bills. (Although as I type this I realize I also had 25 merchant fees transactions in this example, but for some reason it didn't feel like clutter, it felt legit like a bill.)
    Here's a question. Can I hide the wave payments account so I don't see it in my transactions after I verify it? That could be helpful.
  • AlexLAlexL Administrator Posts: 1,118 admin

    HI @Paigettie. You can't hide the Payments by Wave account, but if you filter for only your business account, you can view all other transactions assuming they're all listed under the same account.

  • PaigettiePaigettie Member Posts: 6

    I just have to say I’m SOOO excited. I know I was feeling really frustrated about all the “clutter” with the new "extra transactions", but I thought of a way to use the description of the extra transactions to “clean up” and organize the accounting and stay with Wave!! (I just love SO many other things about it, and wasn’t finding anything else I liked, plus honestly the excellent Customer Service from Wave really has inspired me to want to stay and see if there was a way to make it work.)
    So in the description of the other two transactions I described them as “payments by wave” and referenced the invoice (or invoices if multiples are paid out together in the future) they are associated with so it’s not confusing anymore!! Happy Dance!!

    I just had to share in case it’s helpful to anyone else working with Wave because I know I can’t be the only person overwhelmed by seeing extra transactions and having it feel a bit chaotic. This fixes the issue.

    Thanks for all you do. You guys don't have easy jobs, especially when we as users have melt downs from feeling overwhelmed and frustrated. I'm positive you don't hear it enough, Thank You. <3

  • AlexLAlexL Administrator Posts: 1,118 admin

    Thanks for the kind words, @Paigettie , it put a smile on my face! Glad you were able to work out a fix for this so that it feels less cluttered. I admire your grit to make it work for you how you need it to, and I thank you for sharing this with everyone else! :smile:

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