Understanding your chart of accounts: Assets, income, equity, liabilities, and expenses

SystemSystem Posts: 370 admin

imageUnderstanding your chart of accounts: Assets, income, equity, liabilities, and expenses

Every category in your chart of accounts falls into one of these five account types: asset, income, equity, liability, or expense. 
Assets
Assets are things of value that your business owns. An ass...

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edited March 25, 2019 in Help Center Discussion
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  • Annette17Annette17 Member Posts: 12

    Expense Account question: As a medical provider, I pay many different "fees" for my practice: ie; clearinghouse for electronic claims filing, online fax has a monthly fee, cloud services (dropbox, evernote, one drive), backup of patient database has monthly fee. How should I categorize these? It's not a "software fee" b/c I don't "own" anything, it's not a "professional fee" b/c isn't dependent upon my license. So just not sure. Thanks for any suggestions.

  • jondecker76jondecker76 Member Posts: 4

    @Annette17
    You can create your own expense account that is more accurate. Perhaps a "Cloud Storage Subscription" expense account?

  • Ou812Ou812 Member Posts: 5

    Bought a vending machine with a credit card. Transaction imports and shows as an expense. When I categorize to asset account, the account has a negative balance. Shouldn't it have a positive balance so I can depreciate? How should I categorize the credit card transaction and properly credit the asset account?

  • MikegMikeg Member Posts: 791 ✭✭✭

    Mr. J.D. Volz,
    It should be a positive balance in the asset account. Not sure why it would be a negative balance. I have seen credit card imports come in reversed but that does not seem to be the case since you mention it as an expense. But for curiosity sake is it green or black on the transaction page?
    Mike G, CPA
    www.mgfinancial.net

  • Carol_BCarol_B Member Posts: 2

    I don't want my bank balance in my Chart of Account

  • SamdSamd Administrator Posts: 557 admin

    Hey @Carol_B - the bank balance shouldn't be showing up in Accounting > Chart of Accounts, but it would show in Transactions and your dashboard. If you don't want your bank balance to show here, unfortunately you'd need to disconnect your bank entirely (via Banking > Bank Connections). If the concern is for other people being able to see your active bank balance however, collaborators shouldn't be able to see your real bank account details, except for what the active balance is for that account in Wave.

  • AbolajiAbolaji Member Posts: 1
    Good day,
    Please, is there any way i can get manual on how to set up chart of account of my company. i have actually tried to use the former accounting knowledge have but it is not working for me. i will really appreciate a quick response to this my comment.

    Thanks best regards
  • MikegMikeg Member Posts: 791 ✭✭✭

    Abolaji,
    When you set up Wave it already comes with a chart of accounts. You can customize from there specific to your business. So for example, if you have furniture and fixtures, you'll want to add that account under Assets/Property. If you have a loan, then you'll need to set up a loan under liabilities.
    Mike G, CPA
    www.mgfinancial.net

  • profileweaverprofileweaver Member Posts: 4

    Please just help me, I would like to see what my balances with my vendors are since some are in credit and I can not see what credit I have, it also does not reflect when I create a new bill, my overpayments just seem to vanish

  • JamieDJamieD Administrator Posts: 1,145 admin

    Hey @profileweaver. I just want to confirm something with you here -- have you made sure that you've associated these bills with the specific vendor, and also on any corresponding transactions? Since Wave is accrual based, any bills that are outstanding will show up on the vendor report as well as what you've already paid. If you've over paid on a bill, one thing you can do is split the transaction for the overpayment, and associate that split with a future bill that needs to be paid out.

  • jack555jack555 Member Posts: 4
    If a partner profit sharing is 25%, how the system will present their portion of profit or loss.
  • MyronMyron Administrator Posts: 143 admin

    Hi @jack555 , welcome to the Wave community! It's very nice to meet you! I'm afraid that Wave currently does not split the Profit and Loss by share in-app. The best approach would be to export your data to a spreadsheet via Wave Connect or Settings > Data Export, and then calculate 25% of the income and expenses.

  • AcmeServicesLVAcmeServicesLV Member Posts: 2

    Where do I categorize loans and loan repayments?

  • MikegMikeg Member Posts: 791 ✭✭✭

    @AcmeServicesLV,
    Loans are set up as either a short or long term liability depending on the terms. Greater than one year, then long term.

    edited August 19, 2019
  • AcmeServicesLVAcmeServicesLV Member Posts: 2

    Thanks!

  • NMKITCHENNMKITCHEN Member Posts: 1
    I need help getting my money which my customers paid almost month ago but I haven’t got yet please
  • JamieDJamieD Administrator Posts: 1,145 admin

    Hey @NMKITCHEN. I've passed your message along to our support team and they should be reaching out to you shortly via email.

  • StephanieKStephanieK Member Posts: 2

    How do I establish whether the expense categories already set up are expenses that go to Cost of Sales line or that go to the general Operating expense line?

  • MikegMikeg Member Posts: 791 ✭✭✭

    @Antbeachpowder1,
    First question would be does Cost of Goods sold even apply. Do you sell or produce tangible property held for sale?

  • WRVAWRVA Member Posts: 3

    How do I link an Income account to an Expense account to calculate profit and loss on a specific Account? For example, we run Event X which has both Income and Expenses related to it. Currently, we created both an Event X under Income and under Expenses. Are we doing this wrong?

  • MikegMikeg Member Posts: 791 ✭✭✭

    @WRVA,
    Wave is not able to report in segments like that sometimes referred to as job costing. Your best bet would be to export the income statement to excel and delete accounts that you do not want to include in the analysis of X event.

  • WRVAWRVA Member Posts: 3

    Thanks for the quick response! And that is weird, sounds like a very basic thing to add. How about just creating it as just an Income account and using Debit against the income? I guess that would mess up the overall balance?

  • MikegMikeg Member Posts: 791 ✭✭✭

    @WRVA,
    Sounds simple but the programming behind it, not so much. A lot of moving parts that would have to be matched based upon user input. Could you be more specific as to what you are trying to accomplish?

  • WRVAWRVA Member Posts: 3

    For sure, I am just trying to get automatic calculation of Profit & Loss for Events or Products, based on Income and Expenses directly related to that Event/Product, like this:

    Organisation X: Income - Expenses = Profit & loss across the organisation
    Broken down into products:

    • Sub Event/Product X1: Income - Expenses = Profit & loss for Event/Product X1
    • Sub Event/Product X2: Income - Expenses = Profit & loss for Event/Product X2
    • Sub Event/Product X3: Income - Expenses = Profit & loss for Event/Product X3

    Right now, I have created Income accounts and Expenses accounts for every Event/Product X1, X2, X3. This allows me to track Income and Expenses (Cost of Goods Sold) separately for those Events/Products.

    But there is no standard report that matches them and calculates the Profit & loss for Event/Product X1, X2 and X3 separately.

  • MikegMikeg Member Posts: 791 ✭✭✭

    Correct. There is not standard report as Wave does not do job costing. Unfortunately you will not be able to do something automatic, but can use excel to accomplish your goal. When you report an income statement it should show each account that has a balance. Export to excel and you can reformat by moving each matching item and expense into a column. Hope that makes sense.

  • headshotsbykempheadshotsbykemp Member Posts: 4
    We are forming an LLC for one of our companies and need to setup separate capital and distribution accounts for each member. Does anyone know how or if we can do this with wave?
  • MikegMikeg Member Posts: 791 ✭✭✭

    @headshotsbykemp,
    You would go to Accounting/Chart of Accounts/Equity tab. Add each as required.
    Such as
    Capital - John Doe
    Capital Jane Doe
    Distributions - John Doe
    Distributions - Jane Doe

  • headshotsbykempheadshotsbykemp Member Posts: 4

    @Mikeg Makes sense. Thank you!

  • aj_epropertycareaj_epropertycare Member Posts: 1

    How can I easily pull revenue (invoices by state) without looking at each individual invoice. Example, I want to pull only invoices from the state of Texas. How do I do this so I have one list with only customer invoices from the state of Texas in the list?

  • BarsinBarsin Administrator Posts: 1,811 admin

    Hey @aj_epropertycare

    Sadly this isn't possible in Wave. As you can see the only invoice filter options you have are seen below.

    If you head to Settings > Data export > here you can download all of your transactions. You can see that a zip folder of several line items are downloaded in this export:

    Perhaps opening this up in an excel file might give you the ability to sift through your invoices better?

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