Learn how to bookkeep transfers and credit card payments with a video.
Understand transfer transactions in Wave
What if there are no matching transactions?
Understand transfer transactions in Wave
A transfer transaction records money moving from one bank account to another. This ensures accurate account balances in Wave and prevents the fund movement from being mistaken as income or an expense.
For a transfer to happen in Wave, you need two transactions. An expense transaction to show from which account the funds originated, and an income transaction to show which account the funds landed in. Examples of a transfer include:
- Making a credit card payment
- Making a loan repayment
- Moving money from your checking account to your savings account
- Depositing cash into a bank account
This article details how to record transfers between accounts in the same currency. Learn how to account for transfers from a foreign currency bank account.
Record a transfer transaction
To record a transfer:
- Open the Transactions page.
- Locate one of the two transactions that make up the transfer.
- Categorize the transaction as Transfer to/from Bank, Credit Card, or Loan.
- Select the matching transaction of the other side of this transfer. The two transactions must be located in different payment accounts to show the money flow.
- Click Save. The transactions will change from Uncategorized to Transfer to/Transfer from.
What if there are no matching transactions?
If a transaction is categorized as a Transfer to/from Bank, Credit Card, or Loan, the option to match may be missing for a few reasons:
- The other side of the transfer doesn’t exist in your Wave account
- You may have the other side of the transfer located in an account not importing to Wave
- The amounts of both transactions don’t match
- The dates of the transfers are too far apart. That is more than 20 days before or after the first transaction
- The other side of the transfer is already categorized
- The transactions are in different currencies.
A transfer in Wave cannot exist without both sides of the transfer being recorded. If you categorize a transaction as a transfer without selecting a match, select the account the transfer is to/from. Wave then automatically creates the missing transaction for you.
The new transfer transaction will have the description Created Transfer. Wave records it with the same date as the original categorized transaction.
When not to record a transfer
Sometimes you may have only one side of a transfer to record. Do not record a transfer if you are moving funds from one account in Wave to an account that doesn’t exist in Wave.
When moving money to a personal account, use the Personal Expense/Withdrawal category. Select the most suitable equity account, such as Owner Investment/Drawings. If a business bank account is not accounted for in Wave, it leads to an inaccurate balance sheet.
When making a payment to a vendor, use an Expense instead of a transfer. If you have created a bill in Wave for the vendor, use the Payment sent for a bill in Wave category.
If you’re unsure of which category works best, consult with an accountant.