New Accounting Experience - Adjustment Entries with Skipped Transactions

JustinAJustinA Administrator Posts: 33 admin

Hi everyone!

I wanted to provide a bit more detail about the adjustment entries that you may have noticed since we’ve updated your Wave account to the upgraded accounting experience.

We created these entries to account for discrepancies between how we calculated things in the old accounting experience compared to the new upgrade. These include things like:

  • Changes to the way invoice and bill totals are calculated. This is not an issue for most invoices and bills, but in certain situations can result in changes of a penny or two, particularly when there are many line items on the invoice.
  • For users who do business in multiple currencies, we’ve enhanced how we calculate gain and loss for invoice and bill payments, as well as transfers. We’ve added adjustment entries to ensure that your books match the old system up until the time your account was updated. Going forward, gain and loss on foreign currency will use our new and improved calculations to ensure your gain and loss reporting is more accurate than ever.

There are also a few cases where we had to “skip” certain transactions that aren’t valid in the new system. In these cases, the adjustment entries will also account for these skipped transactions to ensure that your yearly reporting remains consistent. Typically, skipped transactions are transactions where the bookkeeping information wasn’t valid, like:

  • Single side transfers: In rare situations, the old system might have allowed you to create a transfer with only one side in Wave’s system. The upgraded accounting solution does not allow for transfers unless they are a pair, so we removed the transaction and used the adjustment entry to keep your books balanced.
  • Transfers between the same account: The old accounting platform allowed you to create a transfer from an account to the same account. This typically doesn’t have a bookkeeping impact and will not result in your adjustment entry being modified. Because of this, the upgraded system doesn’t allow for transfers between the same account, and so we’ve removed these transactions.
  • Transactions where the account and category are the same: Similar to transfers between the same account, this transaction never has a bookkeeping impact, so we simply removed these transactions during the update. These transactions won’t be possible in the upgraded system.
  • Invalid moved transactions: In the previous system Wave allowed you to move imported transactions from one business to another business or your personal account. In rare cases, we found transactions like this that were associated with an account from Business A, and a category from Business B. Because this is an invalid transaction (transaction categories and accounts must be from the same business), we can’t recreate these transactions. We’ve removed them and incorporated their value into the adjustment entries as needed.
  • Other issues: There were a few very rare transactions that ended up in a broken state on the old system. These transactions are usually considered invalid in the upgraded experience, and cannot be migrated. We’ve also included the value of these transactions in your adjustment entries to keep your books balanced.

We made these adjusting entries to ensure your reports and balances stay the same and indicate the information you entered in your Wave account, while reflecting accounting best practices. As always, we welcome any feedback you'd like to offer. If you have any questions, comments, or concerns, please feel free to let us know below.

Comments

  • Jacinto_ChoJacinto_Cho Member Posts: 16

    When does the FX journal entry gets recorded, after making reconciliation? does wave have conversion of financial statements? that is when you want to show the P&L and BS in a different currency, for example I have Honduras Lempiras, but want to see the reports in USD.

  • CharlotteCharlotte Member Posts: 695 admin

    Hello again @Jacinto_Cho ! Wave's reports are only available in your business's primary currency.

  • tomeksoktomeksok Member Posts: 4

    Hello, I am a one man business working with clients one to one and do not have a degree in accounting nor do I have time to get a degree in accounting. I had just gotten used to figuring out how to use Wave for my accounts and now you have gone and changed it all, deleted old transactions that I wanted to be able to keep track of for some reason, and introduced 'migration adjustments' of of thousands of pounds which I have no idea what to do with and if I spend time to learn all about this I won;t have time to earn a living. Could you please give me some basic pointers for non-accountants as to what I am supposed to do to sort this out and how can I find the transactions you have deleted? What is the point of my keeping records if you are then going to delete them in the future? Please explain in plain English. I do not know what single side transfers are and I do not deal with foreign currencies so I don't know why I have these adjustment figures of £1,800 for just this year so far!

  • tomeksoktomeksok Member Posts: 4

    I've also just noticed I now have a load of unverified transactions going back as far as 2015. I do my accounts every day because otherwise I don;t remember what they were about. How am I meant to resolve transactions from 2015 which I already resolved 4 years ago and now the change in software has unresolved? Please is there a way I can just have the old system back that was usable by mere mortals rather than accounting wizards and which doesn't give me extra weeks of work to figure out why everything has changed and what to do about it?

  • BarsinABarsinA Administrator Posts: 260 admin

    Hey there @tomeksok

    So I'm not sure if you've read Justin's comment at the top of this thread, but it does touch on a lot of the issues you may have seen with transactions that are "missing" or more appropriately put, transformed.

    Our newest version of Wave is significantly easier to use (though I understand that it's new and that can be intimidating). It's ideal to make sure your Chart of accounts is updated and you've created all of the appropriate accounts. Expense and income transactions need to be accounted for by categorizing them from your transactions page. If you made a payment to a liability account you'll want to create a Transfer between those two payments to link the two. Our Help center article is a great place to start if you need further insight.

    We are looking to move our entire platform onto the new system. In regards to the old transactions which are not accounted for, it's often due to the fact that our old system allowed you to do some improper bookkeeping, and these journal transactions you're seeing are trying to remedy the incorrect accounting. Of course we've learned from this past system and once everyone is migrated, it's likely you'll want to begin by reconciling your accounts. You can do this by heading to accounting and reconciliation.

    edited June 20, 2019
  • tomeksoktomeksok Member Posts: 4

    Thank you Barsin, I am not sure I will be able to find the time to learn all of these new technical accounting terms as I am a one-man business working with clients one to one so my budget and time are very limited. I have been verifying all of my transactions (which presumably is the same as 'reconciling' in your new terminology so that is not the issue. Is there a way I can just export the old data to a file and then just start afresh because if I spend the time necessary to make corrections for all the new changes and to learn all of the new terminology I will not be able to pay my bills.

  • tomeksoktomeksok Member Posts: 4

    I am just wondering if someone can respond to my query about retrieving my old data that I typed in every day for the last 5 years. I don't have an accounting department. I am a one-man business and do not have a month spare to take off to correct 5 years of data which you suddenly messed up without even thinking about giving me any warning so I could migrate the hell out of Wave to some other software that won;t mess with my data. Please let me know how I can get my old data back so I can migrate to a different software package. Otherwise I will need to seek legal advice as I suspect I am legally required to keep accounts but I cannot reasonably be expected as a one-man business to spend a month correcting my accounts because you have decided to make these changes.

  • BarsinABarsinA Administrator Posts: 260 admin

    Hey @tomeksok

    I see that one of our agents has responded to your ticket. I'll gladly quote it here just for the rest of our community members to get some insight as well!

    First, in regards to the unverified transactions, anything that was left as uncategorized in Wave's old platform will now show as unverified in the new platform. IN the old platform, you could in fact verify an uncategorized transaction, but as this isn't great accounting and we've updated the platform to work better for accounting, any unverified transactions that you have are most likely due to a lack of categorization.

    Next, rest assured that none of your data is lost. We haven't deleted anything, as any broken transactions that we had to move when you were migrated have been replaced with adjustments in your accounting to bring you back to the exact place that you were before. This means that you have to do absolutely nothing to continue using Wave, as any and all changes have already been made for you.

    With respect to the skipped transactions, you can download them all under the CSV download available under Settings>Data Export. This contains any transactions which may have been 'skipped'

    If you do have any further questions for me, don't hesitate to reach back out as we'd be happy to help.

  • MartaPMartaP Member Posts: 1

    The system entries were a surprise to me! It would be better if a warning was given that the adjusting entries were made so I would not get a heart attack just before VAT submissions... It took me an hour to understand how the automatically generated transactions by Wave affected my accounts and what they relate to. It could have saved users panic and time if you had sent users a warning and a hint that all transactions can be traced through A NEW SYSTEM ACCOUNT called: System Asset Clearing Account and the transactions did not affect P&L and BS.

    edited August 29, 2019
  • BarsinABarsinA Administrator Posts: 260 admin

    Hey @MartaP

    My apologies for the surprise. You're right in saying that a warning prior to would have been ideal. For those wondering, our developers are only migrating users if their account can be migrated with adjustment journal entries through our automated system. We appreciate you understanding and are glad you were able to sift through and understand the accounting that our team made on your Wave account.

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