How to associate your invoice payments to income accounts

When you add products or services to invoices in Wave, the reported income for these items will be associated with the income account you select. This article will explain how the invoicing income from these products and services is recorded, and how you can view and edit items' income accounts.

When you create invoices in Wave, you can add items to be sold. These items may either have been previously created under Sales > Products & Services, or from the invoice itself, by clicking Create a new item. An item must be assigned to an income account (and an expense account if they are also going to be bought and added to bills). You can learn more about creating products and services in this Help Center article.

If you create an item through the invoice, by clicking Create a new item, the default Income account will be Sales.

This is so, when you add an item to an invoice, and mark it as paid, the funds are tracked under the correct accounts on your reports. If you’ve realized you’ve assigned the incorrect account to an item already added to an invoice, and want to change this, jump to this section.

How income is recorded for invoice payments

As an example, you sell furniture. You create an invoice for 10 couches and 10 chairs, to a total of 20. The product Chair is related to the income account Chair income, and the product Couch is assigned to the income account Couch Income. The total of the invoice is $3,500. Screenshot of invoice items Chair and Couch

You receive the payment for the invoice. It's paid via check, which you deposit in your Business Checking account, so you record the payment as such.

If you receive a payment through Wave, we'll handle the bookkeeping for you, so you don’t need to manually mark the invoice as paid. Check out Automated Bookkeeping with Wave Payments for more information.

Screenshot of record a payment pop-up

The Account on the Transactions page for this payment transaction will be Business Checking. The Category will be Payment Received for an Invoice in Wave > Invoice #. Screenshot of invoice payment transaction

In this case, even though the Category for the payment transaction is an invoice payment, in your reports, the income would be recorded in your Chair Income and Couch Income accounts. Screenshot of profit and loss report showing income accounts

How to check the income or expense assigned to an item

  1. Open the Sales menu and choose Products & Services
  2. Click the pencil icon (Edit) beside the product. 
  3. If the Sell this checkbox is selected, you'll see the Income account below it. If the Buy this checkbox is selected, you'll see the Expense below it. You can select one or both. 

How to re-assign items to a different income account

  1. Open the Sales menu and choose Products & Services. 
  2. Click the pencil icon (Edit) beside the product.
  3. In the Income account dropdown, select the correct account for the product.

    If you have not yet created the new, correct account, click on the + icon next to the dropdown for more account options. Selecting one of these options will create a new account. You can also create a new, custom account by following the steps in this Help Center article.

  4. Click Save.
  5. Navigate to the Invoices page.
  6. Click the drop down arrow beside the specific invoice, then select Edit.
  7. Delete the item which was previously assigned to the wrong category by clicking the trash can icon beside it. Screenshot of chair item on an invoice with delete button highlighted
  8. Re-add the item by clicking Add an item.
  9. Click Save. This will apply the account change, and your reports will be updated.