Adjustment entries in your upgraded account

SystemSystem Posts: 359 admin

imageAdjustment entries in your upgraded account

Like all the automatic bookkeeping Wave does for you, when we updated your account to the new accounting platform we automatically accounted for any changes between the old system and the new syste...

Read the full story here


edited November 28, 2019 in Help Center Discussion

Comments

  • MartaPMartaP Member Posts: 13

    Dear Wave Team!
    I feel that I have to give you the feedback on your upgraded system. My foreign bank account does not reconcile because there were many system adjustment posting. Suddenly I have more money in the bank (in foreign currency) then I actually do have. So now I have to go back 7 years backwards and reconcile item by item hundreds of bank postings to understand and reverse your system posting. What I noticed so far is that some transactions were posted in the wrong period , some amounts are incorrect, some are missing. Luckily I am a qualified accountant with many years of experience so I hope I will manage it but it will take few days or weeks to do it! However I am wondering how users who are not accountants can manage to reconcile their transactions. So far I was a big fun of WAVE. I must say that what happened with the upgrade is very frustrating. There are of course some positive changes but unfortunately WAVE is no longer a reliable software.

    edited November 28, 2019
  • EmmaPEmmaP Administrator Posts: 639 admin

    Hi @MartaP! I appreciate you taking the time to provide your feedback here. There have been a lot of changes with the upgrade, including the adjustment entries that have been created. Reconciling is the best way to find where the discrepancies are, but we understand that this is time consuming.
    The old version of Wave Accounting only considered verified transactions for reconciliation, however, all transactions were included on reports, this lead to instances where users considered an account reconciled, but reports were wrong. The new version counts all transactions in reconciliation to ensure that the transactions that are on reports are reconciled with your bank, helping you keep your reports accurate.

    Another option is, if your account was already reconciled, you should be able to enter statement ending balances into Wave and get all months into a reconciled state. If you want to start with just this fiscal year, enter the ending balance of the account you're reconciling at the end of the fiscal year. On the Reconciliation page, Wave will prompt you to enter the balance on your last fiscal year-end if you're getting started. I understand that this is a frustrating consequence of the accounting update, and I appreciate your feedback on this.

  • FaizFaiz Member Posts: 1
    Hello

    I am waves user for years but all of sudden after upgrade, my bank balance have changed which were already reconciled and I paid taxes, year end etc based on these reports and now everything suddenly changed.
    I have thousands of transactions and I am not an accountant so it might take me months to reconsile and it seems impossible for me.

    If waves can keep my data till last finincial year unchanged, that might work but now seriously think to seek alternative options.
  • AlexLAlexL Administrator Posts: 1,794 admin

    Hey @Faiz . First off, thanks for reaching out about this. I understand your frustration with the change and how this has affected your accounts.

    So I can further explain to you what has changed, a limitation of the old version was that while we used your bank balance to compare against verified transactions, the system didn't save the reconciliation itself. We only saved statement balances where you entered them directly, for example, when reconciling an account for which you did not have a bank connected.

    If your account was already reconciled, you should be able to enter statement ending balances into Wave and get all months into a reconciled state.

    If you want to start with just this fiscal year, enter the ending balance of the account you're reconciling at the end of the fiscal year. If you start with the wizard on Reconciliation page, Wave will prompt you to enter the balance on your last fiscal year-end if you're getting started, and the first statement balance you enter doesn't match the Wave balance.

    If you are still seeing your accounts as unreconciled for the months where you’ve entered balances, there are a few things to check. To get set up, I'd recommend heading to your online banking to pull up your bank statements for the periods that need attention and downloading them or pulling them up on another screen, so you're ready to go.

    The old version of Wave Accounting only considered verified transactions for reconciliation, however, all transactions were included on reports, which to instances where users considered an account reconciled, but reports were wrong. The new version counts all transactions in reconciliation to ensure that the transactions that are on reports are reconciled with your bank, helping you keep your reports accurate. Starting reconciliation from the earliest available month is the best way to determine where these errant transactions are, and correct them if need be.

    edited December 9, 2019
  • JaneOJYJaneOJY Member Posts: 2

    Hi, I am trying to get used to Wave's new system recently. One thing I cannot wrap my head around is the ending balance of one of my account in foreign currency (USD). The ending balance of USD0 shows SGD17.04 (SGD being my home currency). I am expecting USD0 to convert to SGD0. Hope someone can help or show me a better place to post this question, thanks!

  • ConnorMConnorM Member, Administrator Posts: 1,175 admin

    Hey @JaneOJY! Thanks for reaching out here. Can you send a screenshot of what that looks like on your end? Are you looking at that ending balance from your reports? If so, which report?

  • JaneOJYJaneOJY Member Posts: 2

    I thought I have already replied this but here it is again. Thanks @ConnorM.
    https://ibb.co/bL1wYTG
    This is taken from Reports>Balance Sheet's Details view, after click on the specific account.
    So apparently Wave took the totals of debit and credit to get the ending balance. But what am I supposed to do with this SGD17.04 which is supposed to be zero since it is USD0?
    If I journal it off to gain/loss due to foreign exchange, I will end up with negative USD balance which does not seem right too. Any advice is greatly appreciated.

  • rdwcrdwc Member Posts: 3

    After the Wave update, there are major differences in acct balances which have been reconciled but they're still there. I have read through multiple Wave help posts explaining why this is, but it's still not clear to me what is the best way to handle it. For example (using basic numbers): Let's say I have Checking Account X, which was fully reconciled for 2018-12-31. The statement balance from my bank on 2018-12-31 is $20,000. The Wave balance is $50,000 for a difference of $30,000. The Wave update's automatic adjustment entry for 2018-12-31 is $29,000 which is almost exactly the same amount of the difference between the actual statement balance vs. the Wave balance. So now I have two choices (I think--let me know if there are other options):

    Option 1: Do I follow the instructions here ( https://support.waveapps.com/hc/en-us/articles/360032203492-Adding-a-Year-End-Adjustment-to-Start-Reconciliation ) to make a $30,000 manual year-end adjustment for each account and year affected? That will ensure the statement balance is "correct" (compared to the actual bank statement), but won't it basically undo Wave's automatic journal entry that was supposed to "fix" some issues with past bookkeeping?

    Option 2: I could do nothing since I have confirmed that everything is reconciled...but then my actual vs. Wave balances will be off by $30,000 in this account (and this is just one of several accounts--others have variances, too) forever ?

    This is an issue for multiple accounts and years, but 2018 is the worst one so I want to get your answer before I spend the time (at least several hours) to go through all of them. This really caught me off guard, I did not budget so much time for this in the new year. Thanks in advance for the reply.

  • alevglobal17alevglobal17 Member Posts: 1

    Hi!
    We are an avid user since 2015 from Malaysia. I have been loving the system and have even used the Waveapps report to file for taxes here until this Migration Entry came about. It has certainly messed with our balance sheet report as the final balance does not reflect our actual bank account balance.
    Kindly advise. Thank you.

  • BarsinABarsinA Administrator Posts: 1,535 admin

    Hey there @rdwc

    If you're finding that the adjustment entry is messing with your bookkeeping you can always undo the entry by simply adding a new journal entry and mirroring the debits and credits of what the adjustment entry if you so wish! Knowing that you've reconciled your account in the previous version, we wrote the "adjustment journal entry" article to basically say start over for the year with a year-end adjustment entry. Option 2 with an adjustment entry to close out your previously reconciled year might be the best bet.

    @alevglobal17

    The adjustment entries that you see as a result of your account update ensure that the totals of your new reports are exactly the same as they were in the old version of Wave Accounting. There is no action required on your part with respect to these entries.

    We've written a detailed explanation about these adjustments in our Help Center that goes over why there were some cases where adjustments needed to be made when updating your account to the new version of Wave Accounting. You can read that here.

    If there is anything that you wish to change about the adjustments, you'll want to do so by using a reversing journal entry. You can add a journal entry by using the More drop-down menu on the Transactions page.

  • AGJA_2020AGJA_2020 Member Posts: 1

    I have duplicate transactions from by one linked bank account. I have a very simple set up, one bank account and probably less than 100 transactions per month. I went to reconcile the last 2 months and I noticed the linked bank is no longer on the dashboard screen. Is that a new change? Then I went to the linked bank account tab and now I have duplicate transactions for what looks like most or all of the year. That means my gross income and expenses show as double my actual. How do I fix this?

  • ConnorMConnorM Member, Administrator Posts: 1,175 admin

    Hey @AGJA_2020! Unfortunately, the bank showing on the dashboard is something that has been temporarily deprecated. Our teams are looking to restore that functionality ASAP.

    With regards to the duplicated transactions, unfortunately this was a known issue as far as the bank migration goes. I'm very sorry about this, but you will need to delete those duplicated transactions manually on your end.

  • MichLMichL Member Posts: 8

    I am quite frustrated with these adjustments you made. Clearly your migration had huge flaws. I now can't reconcile my bank account because of Migration entries YOU added to the accounts. That's just unacceptable that you went ahead and did a mass migration of people's accounts without any notice, any way to ID theres entries easily (really, download ALL entries and review???? Talk about user-friendly.

  • SugarbombSugarbomb Member Posts: 7

    this whole update has left me feeling completely overwhelmed and defeated with the Wave platform.
    Every aspect of my bookkeeping that was once easy has now become a nightmare. There are migration entries, system adjustment entries, and other confusing payroll duplications.
    I don't even know where to start...
    I'm considering leaving as it has become too difficult to recoup my accounting. I don't want to pay a wave expert for something they changed on me.
    once a great platform has gone too far.
    every time i ask for help i'm simply re directed to an FAQ page.

    too far gone wave... bye.

  • MichLMichL Member Posts: 8

    Hi Wave team,
    I notice here most people have exactly the same issue I have with my foreign bank accounts, which is that, due to the balancing transactions added by Wave during the adjustment journals (in local ledger currency) to make the accounts balance to old history, Wave also added the foreign currency equivalent. This entry (the linked foreign currency impact) causes the balance of the Foreign Bank accounts to be different from the bank statements, but the local ledger balance now agrees to history.
    So how do we make an adjustment journal in local currency without it adding the automatic foreign currency equivalent?
    1. If I reverse the automated Wave entries, it corrects the foreign bank account to reconcile back to the bank statement's closing balance, but the local currency, in which I file tax returns and submit reports for audit does not match to the historic close balances.
    2. If I leave the automated Wave entries, the local ledger balance matches history, but it no longer reconciles to my bank statements and the actual cash in the bank account.

    I basically need to do an entry like this:
    DR Exchange gain / Loss (or any other accounts used in the automated balancing transaction): Local currency 1,000
    CR Foreign Bank account (USD) 0.00, Local Currency 1,000

    Can Wave do this, and if not, how do we force match this?

  • ConnorMConnorM Member, Administrator Posts: 1,175 admin

    Hey @MichL! Thanks for reaching out here. Unfortunately, at present, the journal entry with regards to balancing those foreign accounts will always leave one side amiss. We're actively working on making this as streamlined as possible, but the possibility to create the journal entry that you've outlined at the bottom of your post does not exist within Wave at present.

  • MichLMichL Member Posts: 8

    Thanks @ConnorM - how do I then move on from this?

    As mentioned, the Wave system adjustments corrected my base currency history, but left my foreign currency bank accounts with the associated currency entry, so the bank balance on my bank statements are now different with the balance in Wave.

    Best,
    Michelle

  • EmmaPEmmaP Administrator Posts: 639 admin

    Hi @MichL! Are you able to provide some screenshots of what you are viewing? This will help us to see what is going on. Feel free to remove any sensitive data from your screenshots before sharing here :)

  • MichLMichL Member Posts: 8

    Hi @EmmaP

    Thank you for following up on this.

    I am adding the migration entry as well as what I believe the impact is of the entry:

    From what I can understand:
    1. The Migration to the new WAVE has made improvements to exchange calculations and rates, impacting all accounts with foreign currency entries, and especially Bank accounts in foreign currency.
    2. This caused the base currency balances (HKD in my case) after migration to be different to base currency balances before migration, but did not impact the foreign currency balances.
    3. The foreign currency balances (USD in my case) are matched and correct both before and after the migration (but before the WAVE migration journal entry)
    4. The WAVE system migration entries were done to adjust the base currency balances to match back to what it was before migration, but it also forced through a matched foreign currency (USD) entry (see my screenshot).
    5. This caused the previously matched, and correct foreign currency balances to be incorrect by exactly the value automatically created by the WAVE system migration entries.
    6. The problem this is causing is bank accounts now no longer reconcile back to bank statements by exactly this amount.

    I believe this can be fixed by either (a) changing the exchange rate used for those Wave system migration journal entries to 0.00 to only impact the ledger's base currency or (b) post a journal entry that does not have an associated foreign currency entry (if re-doing the Wave system migration journal entry) or to not have an associated base currency entry (if fixing the impact of the Wave system migration journal entry on the foreign currency balance).

  • BarsinABarsinA Administrator Posts: 1,535 admin

    Hey @MichL

    A lot of users have reported something similar and what they've done is create another adjustment to counter this or reverse it. This can totally be something you do if need be as we understand our migration was not perfect for every account.

  • MichLMichL Member Posts: 8

    Hi @BarsinA

    Apologies, I don't think the accounting impact of the systems improvements / updates were fully understood prior to executing the upgrade. I appreciate that the adjusting entries were created to fix the unexpected balance differences, but these accounts are the basis of audited accounts, and tax filings submitted to an Inland revenue departments.

    Yes, I did try the advice to reverse the entires as you also suggested. It ensured that my Foreign Currency Bank Statements matched the Foreign Currency in the Wave Foreign Currency Bank accounts, but it made the Local Currency Bank account and the associated Currency Gains/Loss Account in Wave incorrect.

    Because Wave changed the way the system calculate exchange rates and recognise exchange gains / losses, it changed the historic rates, which resulted in the Local Currency Balances to change and which is why the Wave adjustment entries were needed (to force the Local Currency Balances back to what they were before Wave made the updates). Unfortunately the result of the changes are either to have incorrect Foreign Currency Accounts (by leaving the Wave Adjustments) or incorrect Local Currency balances (reversing the Wave Adjustments). The Adjustment journals, or the reversal thereof does not fix this.

    The resulting problem this causes is that all of these balances (local and foreign currency) need to match per the audited accounts and the corporate tax filings or else a formal restatement of prior year numbers are legally required.

    I do not have a complicated set of accounts. I have 1 local currency bank account and 2 foreign currency bank accounts. For the whole migration / update, these were the only accounts that were negatively impacted.

  • ConnorMConnorM Member, Administrator Posts: 1,175 admin

    Hey @MichL, thanks for reaching back out here. We definitely appreciate the feedback you've offered, and I'm sorry for the challenges that the update to foreign exchange rate calculations have surfaced for you and your business.

    A workaround for this scenario is to create a related functional/home currency “valuation” account, where you can make entries in the functional currency only, so the net amount of the valuation account and the bank account will be correct, which should let them match up with those audited accounts/the corporate tax filings.

Sign In or Register to comment.