Transaction Categorization in Wave

Most often, the time you'll spend on the Transactions page will be spent categorizing using the quick list view or the new Transaction Details View. This detail view expands when you add a new transaction or select an existing one.

To add a new transaction, head to Accounting > Transactions and click Add an Income or Add an Expense. As you add transactions, you’ll enter the date, description, amount, account, and category. Within the transaction detail view, the transaction will also be either a deposit or withdrawal to show what is actually occurring: your money is either entering or leaving an account!

You’ll see a few options when adding a category. For any withdrawal transactions, there will be six pre-populated options for categorization above a list of the rest of your accounts.

 

Selecting the Transfer to Bank, Credit Card or Loan option will create a transfer between your selected transaction and a matching deposit transaction you choose

Selecting the Payment Sent for a Bill in Wave option will bring up a list of your unpaid or partially paid bills to which you can apply the transaction.

Selecting Refund Sent for an Invoice in Wave will call up a list of your paid or partially paid invoices to which a refund can be applied. Selecting this option will link the transaction to the invoice, and you will see it on the Invoices page.

Refund for Income will bring up a list of income accounts to which any income has been recorded so that the income from any previous transactions can be offset by the refund transaction.

Sales Tax Payment To Government will pull up a list of your sales tax accounts you've created.

Personal Expense or Withdrawal will pull up your owner's equity accounts, for example, Owner's Investment/Drawings. 

If the withdrawal transaction you have entered does not fall under the six categories you see here, then it can be categorized to any of the other accounts that you see in the drop-down.

If you have entered or selected a deposit transaction, you’ll see a similar group of suggestions pre-populate under the Category drop-down.

 

Selecting Payment Received for an Invoice in Wave will allow you to indicate that the transaction is a payment for an unpaid or partially paid Wave invoice.

Refund Received for a Bill in Wave will call up a list of any of the bills for which you have recorded a payment. Recording a refund will mark the bill as unpaid by the amount of the transaction.

Selecting Refund for Expense will populate a list of accounts to which expenses have already been recorded. Selecting the account to which the original expense was recorded will offset the expense account by the deposit amount.

Sales Tax Refund From Government will bring up your sales tax accounts.

Deposit from Personal will bring up your owner's equity accounts, such as Owner's Investment/Drawing. 

Just as with withdrawals, if none of these categories above apply to the transaction in question, it can be categorized using any of the accounts that appear in the drop-down below the options we’ve just reviewed.

You'll also see the Save button in the transaction details view. This will confirm any details you enter or modify. When you hover your cursor over the Review checkmark, you’ll see a message that says Save and Mark as Reviewed. Reviewing a transaction is a visual cue for yourself that this transaction matches your bank statement.

That's it! You are now a master of transaction categorization.

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