After paying out 2 payrolls, I joined Wave. I input all of my payroll history.
I am trying to reconcile the bank statements, but the payroll isn't showing up on the transactions. How do I reconcile with the correct amounts?
Hey there, do you have a bank connection? Is it importing your transactions at all? If not, are you manually importing your transactions through other means?
Essentially the initial journaled transaction is categorized under a liability account. So, when a payroll is approved, the liability account is credited (increased) by, the amount that you owe the employees. This is the accounting equivalent of saying “I approved payroll, so now I owe my employees the wages from that payroll”.
Wave will also create a withdrawal transaction in the Transactions page whose account is set to the funding account from Account Mapping, and whose category is set to Payroll Liabilities. The date of this transaction will match the withdrawal date for the Direct Deposit. Where the journal transaction credited Payroll Liabilities, this transaction debits it by the amount of the withdrawal. This is the accounting equivalent of saying “Ok, now I’ve actually paid my employees.”
The triplicate transaction is if you have a bank account connected, it will pull in the same withdrawal transaction, so you would have to either merge the two transactions, or delete the bank-imported transaction, as Wave will have already accounted for it. People recommend merging by selecting the check boxes beside the two withdrawal transactions and selecting merge at the top instead of deleting, but it doesn't exactly matter to be honest. Some people don't like the idea of deleting a transaction.
I'd highly recommend reading about how our payroll services work with this handy article.