You’re sending out invoices, and you’ve set up online payments. You’re all set to take payments with Wave, but what about the bookkeeping? Wave Payments' auto-reconciliation makes tracking invoice payments, well, automatic!
When a client pays an invoice through Wave, you’ll receive a deposit for the total invoice amount, minus the merchant fees. For example, if you receive a credit card payment for an invoice of $10, you’ll see $9.41 reflected in your payment account. That's $10, minus the $0.59 credit card processing fee. You can refresh your memory on our payment processing fees by viewing this article.
You’ll see your merchant fees accounted for inline with the invoice payment transaction. When you open the invoice payment transaction details, you’ll see the transaction has been split into two parts; the $10 that was paid by your customer, and the $0.59 merchant fee. The difference between these amounts, $9.41, is what will be deposited in your bank account.
How does Wave take care of the bookkeeping for you?
Every time you’re paid through Wave, you’ll see three transactions:
- As soon as payment is recorded, you’ll see an invoice payment transaction on your Transactions page, under your Wave Payments account. The Wave Payments account is a money in transit account, or holding account.
- Once the payment is deposited in your bank account, the deposit transaction will be imported from your bank connection after 2-3 days (transaction import times vary depending on your bank), and categorised as a transfer from your Wave Payments account.
- Once the bank-imported transaction is pulled in, Wave will automatically create the other half of the transfer transaction, and categorise it as a transfer to your bank account.
These two transfer transactions represent the movement of funds from the holding account to your bank account.
You don’t have to do anything else – your bookkeeping is taken care of for you!
If you haven’t connected your bank account to Wave, this process should happen automatically when you upload your bank statement.
How did we make this so easy?
Every time you’re paid through Wave, you’ll see payments are automatically assigned to a Money in Transit account, or a holding account, called Wave Payments.
What is a holding account, and why is it there? A holding account is an asset account where your funds are held until you move them into the appropriate bank account. A holding account shows what's really happening; the funds haven't hit your bank account yet, but they’re on their way. Click here to learn more about holding accounts.
Your Wave Payments account is automatically created the first time you receive a payment through Wave, so you don’t need to create it yourself.
What do I do if I use Wave Payments but this didn't happen automatically, or I deleted the transfer transaction?
In this case, you can follow these steps:
- Head to Accounting > Transactions.
- Find your bank-imported invoice payment transaction, or create the transaction by clicking Add income.
- Select the category Transfer from a Bank, Credit Card or Loan > Wave Payments. If you’re creating a new transaction, fill in the other details too.
- Click Save.
The Wave Payments account allows us to help you keep your bookkeeping that much more accurate. You’ll be able to see exactly what’s happening to your money, when it’s happening, without lifting a finger.
For a detailed report on your payment processing fees, head to Reports, then select Account Transactions (General Ledger). In the Account dropdown, filter for Merchant Account Fees, then click Update Report.