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 your client pays an invoice through Wave, you’ll receive a deposit for the total invoice amount, minus 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: $10, less the $0.59 credit card processing fee.
You’ll see your merchant fees accounted for inline with the invoice payment transaction. When you click on the invoice payment transaction, you’ll see it’s 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.
Now, how do you take care of the bookkeeping two business days later when those funds actually land in your bank account?
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 to your Wave Payments account. The Wave Payments account is a money in transit account, or holding account.
- Two business days after payment is sent, the deposit transaction will be automatically imported from your bank connection.
- Once the bank-imported transaction is pulled in, Wave will automatically create a transfer between your Wave Payments account and your bank account. That transaction represents 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. (Learn more here about holding accounts.)
What is a holding account, and why is it there? A holding account is an asset account where your funds are held (that’s where it gets its name!) 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.
Your Wave Payments account is automatically created the first time you receive a payment through Wave; you don’t need to do anything else!
What do I do if I use Wave Payments but this didn't happen automatically, or I deleted the transfer transaction?
- In this case, all you'd need to do is head to Accounting > Transactions and locate your bank-imported invoice payment transaction (or, create the transaction by clicking 'Add income'), and make the category Transfer from a Bank, Credit Card or Loan, and then choose 'Payments by Wave'. 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!