- Get your account set up the way you like it
If you have not already done so, complete the steps in Setting up your Wave account before switching.
- Create any outstanding (unpaid) invoices
Outstanding invoices will affect your account balances. To ensure that you don't end up double counting balances later, you need to first recreate outstanding invoices in Wave.
- Invoices to your customers = Wave Invoices
- Invoices received from vendors/contractors = Wave Bills
If you have not received a full payment from a customer or fully paid a vendor, you will need to create these invoices and bills in Wave.
When you create these invoices and bills, create your customers, vendors, and products as you go.
In Wave, there are both Bills and Expenses. If you have already paid for something, it can be recorded as an Expense. If it's something you have to pay in the future, it is a Bill.
- Get your account balances
In Freshbooks, there are three reports you will need:
- Export a Collected (cash based) Profit & Loss Statement for the date range of transaction balances you are looking to enter into Wave.
- Export your Balance Sheet for the last date of transactions that you have. Ensure that your Balance Sheet is balanced!
- Export a Collected (cash based) Tax Summary for the same date range as your profit and loss statement.
You may be wondering, “If Wave is accrual based, why am I generated cash based reports?” This is because you are entering any outstanding (billed) invoices in Step 2. If you include these balances in your reports, you will end up doubling your balances.
- Enter your account balances in Wave
In the Accounting menu, click the Starting Balances option. This page will list all of your accounts: Asset, liability, income, expense, and equity.
The big thing you will notice are the two columns: Debit and Credit. Your Freshbooks reports will not differentiate between debits and credits. Wave is a double-entry accounting system, though, which means you need to enter the correct balance in the correct debit or credit column.
From your Freshbooks Profit & Loss Statement:
- Income balances are debits.
- Expense balances are credits.
From your Freshbooks Balance Sheet:
- Cash on hand is an asset, which will also include your bank balance. If you have money in the bank, enter this number as a debit. Going forward, you can differentiate between cash on hand, checking accounts, and/or savings accounts in Wave.
- Loans are liabilities. The normal balance (you still owe money) is a credit.
From your Freshbooks Tax Summary:
- Collected Taxes are credits. Enter this total balance in the Tax Receivable(such as GST Receivable) row.
- Less Expenses Taxes are debits. Enter this total balance in the Tax Payable (such as GST Payable) row.
Note: See step 1 for setting up your sales taxes in advance.
Once you have entered your numbers, debits must equal credits.
Since Wave will not have specific transaction history, only balances, make sure you keep a copy of your old accounting information for your records!
- Continue on!
Learn more with Tips to stay on top of your accounting.
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