Some people call it “accounting.” Some call it “bookkeeping.” Whatever the jargon, we’ve created a way for you to get the job done, with no technical knowledge or training.
When you look at a line on your bank statement, are you able to say: “I remember this purchase at Office Depot: I bought office supplies, and I paid by credit card”? If so, then you have what it takes to do your accounting/bookkeeping in Wave.
The core task you will do is what we call “categorizing your transactions.” You categorize transactions anytime money comes into your business (i.e., you get paid), or money goes out (you buy something), or money moves around between accounts (you transfer money from checking to savings). Easy-peasy.
You do everything on your Transactions page which is located under the Accounting heading on the left-hand menu.
We will show you in detail how to categorize a transaction. In a nutshell, it looks like this:
- Get the transaction into Wave; there are automatic ways of doing that (Yay, less work for you!), and manual ways.
- Indicate the category of the transaction (e.g., that Office Depot expense was for Office Supplies).
- Apply a sales tax if applicable.
- Click the “Verify” button to show that you’re done.
Do just this, for each of your transactions, and your accounting/bookkeeping work is complete!
- The “Add Income” tab.
- The “Add expense” tab.
- The “Connect a bank account” tab.
- The “Upload a bank statement” tab.
- The “Verified or unverified”.
- The “Filter by transaction type” list.
- The “Filter by category” list.
- The “Filter by account” list.
- The “Filter by date” tab.
- The “Transfer” tab.
- The “Verify” tab.
- Your transactions
How to get your transactions into Wave
The easiest, most accurate, and fastest way to get your financial records into Wave, is to connect your bank and credit card accounts. All your information flows into your account automatically, with no manual entry!
This is a step you only need to take once, when you first set things up.
Bank connection security
To provide you with the highest level of security, we partner with a specialized service used by banks themselves.
The connection process uses state-of-the-art security measures and encryption to keep your information safe. Your bank credentials are stored in ultra-secure systems by our bank data partner.
The connection Wave makes is a read-only connection. This connection can’t be used to move money into or out of your account.
Connecting to your bank account
- From your Transactions page, click Connect a Bank Account.
- Search for/select your bank, credit union, credit card or other financial institution.
- Enter your login credentials and Connect. Wave will connect with your financial institution, verify the security credentials, and retrieve account information. This process can take a few minutes — this is a good time to grab a cup of coffee.
- Wave lists all the accounts that are available to connect. If you don’t want to connect a specific account (for example, a savings account you keep for your children), slide the switch next to this account to Off.
For each account you choose to connect, there are three settings:
- “Importing transactions into”: Indicate whether this specific account is for your business, or if it’s for your personal finances. If you use it for both, go with the account’s primary purpose.
- “...and payment account”: If the bank account you’re creating matches a payment account that already exists in Wave, choose that payment account from the menu. If not, select “a new payment account.”
- “Start importing transactions…”: By default, Wave will try to get transactions from as long ago as we can. Most financial institutions restrict this to a range of about 1 to 3 months. If you only want transactions from this year, or starting 2 weeks ago, or from a different range, you can specify it here.
Do this for all the accounts you want to connect to Wave, including your business credit cards, and then click “Continue.”
Now Wave imports the transactions you asked for, and puts them in the right place according to your instructions.
Do this for every bank and credit card you have for your business, so that all your transactions will be captured correctly and automatically — then you can kiss manual entry goodbye!
Importing account data into Wave
Wave can connect to more than 10,000 different banks, credit cards and financial institutions to automatically import usually about the last 30 to 60 days' of transactions, and to keep your records up to date.
If your bank isn’t one we can connect to, if you have older transactions you'd like to see in Wave, or if you prefer not to connect, you have two options: you can upload your statements into Wave, or enter the transactions manually.
Uploading transactions into Wave
- Go to your online banking site, and download an electronic statement in one of these formats:
- Microsoft Money (.OFX)
- QuickBooks (.QBO)
- Quicken (.QFX)
- Simply Accounting (.ASO)
- On your Transactions page, click Upload a Bank Statement.
- Choose the statement you downloaded from your financial institution, and indicate the Payment Account, or click the + symbol to create a new Payment account.
- Click Upload.
Enter transactions manually
(Entering transactions manually is the most work, but it’s great for your cash transactions!)
- On your Transactions page, click Add Income or Add Expense.
- Enter the details of your transaction in the spaces provided.
How to categorize your transactions
- From the Transactions page, click on any transaction.
- In the Category column, select the correct categoryfromthedropdown menu. Don’t see the category you need? Click the Add new category option.
It really is that easy! Just click outside the transaction and your information will save automatically.
The concept of Transfers is an important one to understand, and it’s one of our most frequently asked questions. Any time money moves from one account to another, that’s a Transfer, and it can occur in a few different ways. For example:
- You move money from your checking account to your savings (or vice versa).
- You record a cash payment in Wave, and then deposit the cash to your savings account.
- You make a payment on your credit card bill, using money from your checking account.
If you have your bank and credit card accounts connected to Wave, a transfer will usually reveal itself by showing you two different line items for the same thing. So how do you categorize them? You don’t. You mark them as a transfer.
Let’s use the simplest example: You move $50 from your checking account to your savings account. If both accounts are connected to Wave, you’ll see one line with $50 coming out of your checking account, and another line with $50 going into your savings.
Here’s what you do with them:
- On your Transactions page, find the two transactions.
- Instead of trying to categorize them, click the boxes on the left-hand side of each line item, to select the two transactions.
- Now, up top, click the Transfer button.
- The transactions will be renamed as “Transfer from...” and “Transfer to...”; so will the Category.
- Verify the transactions now by clicking the check box on the right side.
These two transactions have now been matched as a Transfer, and all the underlying accounting stuff is correct. You’re done!
How to apply sales taxes to your transactions
If you collect sales taxes on the products or services you sell, and pay sales tax on the things you buy, you can indicate that on your transactions.
- Click on a transaction.
- Click Show details.
- Click in the “Taxes” box, then click Add new tax.
- Fill in the fields regarding your sales tax.
- Make sure the Tax rate (%) is correct! All the tax calculations will use the number you put in.
- IMPORTANT: You’ll indicate whether the tax is recoverable or not. This cannot be changed later.
- Click the Add tax button to save. This tax will now be available in the drop-down menu for all future transactions.
You’re done. Click outside the transaction, and your information will save automatically.
Last step! Verifying a transaction is your way of indicating that you’ve done everything you need to do on a transaction. You’ve categorized it and you’ve applied a sales tax. (For advanced users, it could also mean adding Notes, Vendors and more, but that’s not important right now.)
See the check mark at the far right side of each transaction? Click it. When it turns green, that transaction is verified.
Verifying is like ticking something off your To Do list. Your goal is to end up with no unverified transactions. Here’s how it works.
- At the top of your Transactions page are a bunch of filters, like “Status”, “Type” and “Category.” Under the “Status” filter, select “Unverified.”
- Now the only transactions that appear on your page are those you haven’t verified. This is your To Do list! Make your way down the list of transactions, and for each one:
- Apply sales taxes (optional).
- Refresh your browser window once in a while, and you’ll see that the Verified transactions disappear from your filtered view.
- Keep doing this until there’s nothing left. When you have no more Unverified transactions, your work is done! Congratulations.
Once in a while, you might hit a transaction where you just can’t figure out what to do with it. Don’t lose your momentum — just skip it and keep going through your list of transactions. Once you’ve done everything you can, you have three options:
- Click "Help" from the bottom left of your Wave account to access our extensive FAQs
- Ask us! If it’s a question about how to use Wave, we can get you the answers you need. Email support is always free! (http://questions.waveapps.com)
- If your question isn’t about using Wave, but rather about accounting practices, you’ll need the help of a professional. The Wave Pro Network is our community of accountants and bookkeepers who use Wave to help small business owners. Find a Pro at https://pronetwork.waveapps.com/home