Here's how to use transactions to enter a loan into Wave and record payments to it.Accounting for receiving your loan:Under the Accounting tab in the left-hand navigation menu, select Chart of ...
Read the full story here
This does not seem to work when doing a transfer from a Checking account to a Loan account. It does not recognize that to total outgoing is equal to the split.
Hey there @BluJ
Would you mind kindly elaborating on what the real-world use case scenario would be here? Any additional info would be super helpful in trying to help you account for a loan. Thanks in advance!
How do I account for the loan if it was issued a couple years before I began using Wave?
Below are the details:
I am new to Wave, so setting everything up now. I am entering all transactions from 2019 onward, so Jan. 1, 2019 is where my accounting in Wave will begin. I received a loan in 2017 for 25,000€ for farm machinery and have been making monthly payments. I paid the loan off early, in 2020. There was a fee of 300€ charged for paying the loan off early.
1) How do I set this loan up?
2) How do I register the monthly payments?
3) How do I register the interest?
4) How do I register the 300€ early payment fee?
Hey there @Ginja
The same principles should come into play except for your dates which will need to reflect when the loan was received.
Have you entered in your transactions as far back as 2017? If you don't wish to do this you can just enter the balance of the loan from when you created your Wave account in in 2019. Click Add income to create a transaction for the remaining balance of that loan. For the Account you’ll add the checking account the loan proceeds were deposited into, and for the Category you'll select Transfer from Bank, Credit Card, or Loan, select the new loan account you just added, and click Save.
The monthly payments with interest would be made by splitting the payment transactions as such:
I have a vehicle loan of $76 000 which includes the interest. The repayment is made in 60 equal payments which include interest. If I split my repayments in transfer to loan and interest expense... at the end of the 60 months my loan will not be paid off. Do I have to exclude the Interest when I add the Loan account?
Hey @Simon_Pierre1985! While we are able to tell you how to do something in Wave, we aren't able to necessarily tell you the right way of doing it when it comes to the principles of accounting.
I would highly recommend reaching out to a registered CPA to ensure that you don't get incorrect advice on how to do your accounting here!
When I try to split the amount of principle and interest from both the Created Transfer Log (on Checking account) and from Loan Account Payment Log side, I keep getting an Error Message "Transfer account should have an equal amount of debit and credit in the transaction currency." The transactions are downloaded from a linked account. How can we fix this?
Hi @NKIM , thanks for reaching out. Am I right in thinking that you mean you have created an expense from the Checking account, categorized it as a transfer to the Loan account, and are trying to categorize the transfer? If so, this isn't possible, as the category is the transfer. So, you have two options.
I have tried given steps but i still get error saving message. I dont know what to do anymore.
Hey @Shaz2020 and welcome to Wave's Community Forum! Sorry to hear that you are unable to save something within Wave. Are you able to clarify what it is that you are attempting to do when you see this message? Additionally, can you provide a screenshot of the actual error code? This would be helpful for us to know when we look to help you troubleshoot this. Thanks in advance!
@BarsinA If I do as you suggested: "Click Add income to create a transaction for the remaining balance of that loan. For the Account you’ll add the checking account the loan proceeds were deposited into, and for the Category you'll select Transfer from Bank, Credit Card, or Loan, select the new loan account you just added."...wouldn't this create a deposit into the bank account that the loan proceeds were deposited into? If so, this would cause an issue during reconciliation, bc the actual loan deposit was made in earlier years, prior to me using Wave, and I am not going to add transactions for those earlier years into the system (just entering starting balances for each account as of 2019). Could you clarify?
Hi @Ginja , thanks for getting back! To confirm: yes, what @BarsinA described is correct. If you need to record the loan in Wave, you need to also record the loan deposit so that the system has a record of where the funds are coming from. You can back-date the transaction to when it occurred/the year it occurred if that helps you. You can still do this while only entering starting balances for prior years.
Just a note: For "Personal" accounts, Interest Expense does not exist as a category by default. You'll need to create it yourself.