NOTE: Wave cannot calculate or track the unit value of inventory for your business - this workaround only works after you've calculated the monetary value of your units.
To handle basic inventory accounting in Wave, you need two additional accounts: an Inventory Asset account, and a Cost of Goods Sold Expense account. For help on creating these new accounts, click View original article below.
Let's go through an example:
Let's say you made a purchase for $1000 of Inventory A value (or 'widgets').
If you have imported your bank or credit card transactions, categorize this into an asset inventory account. Each type of inventory should have its own asset inventory account.
If you did not connect your bank to Wave, then you can enter it manually on the Transactions page. When you get to the Category section, you want to categorize this into your Inventory asset account. This completes recording the purchase of your inventory.
To continue with the example, let's say you made a sale to ABC customer for $200 worth of Inventory A.
- Are you going to make an invoice for this customer and then wait for the payment to appear on your Transactions screen? If so, ensure that you create an invoice payment and match the payment to the invoice.
- Or, are you going to wait until that customer's check/cash is deposited into your bank account and imported into Wave? If so, you will need to categorize the deposit as an income (could be sales, or whichever income account you normally use.)
Each time you make an inventory sale and either match to an invoice or categorize this into income, you will also have to record a journal transaction to decrease your asset inventory account and account for Cost of Goods Sold.
Since your sale to ABC Customer was $200, your Journal Transaction should record Debit Cost of Goods Sold, and Credit Inventory Asset account.
From here, you can check your Balance Sheet to verify the balance of your accounts.
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