Money in Transit accounts represent transactions that are headed to or from your bank account but haven't cleared yet. For accounting purposes, these transactions are considered cash activity.
An example of a Money in Transit account is the Wave Payments account that is created automatically if you use Wave Payments. This account is specifically created for the automated bookkeeping process that happens when you accept payments through Wave. It helps record a transaction that has been initiated (an invoice was paid, for example) but is still processing (or outstanding) until it appears in your bank account.
Transactions in Money in Transit accounts are included in the Cash Basis numbers for reports like the Profit & Loss and Balance Sheet, and they are also included in the Cash Flow report.
To find Money in Transit accounts:
- On the left navigation menu, click Accounting > Chart of accounts.
- Under the Assets tab, scroll down to find the Money in Transit section.
You can add new Money in transit accounts by following the steps in How to add accounts and customize categories. Select Money in Transit as the account type when you create the account.