How to create a transfer between two accounts (e.g. categorize a credit card payment)

When you move money from one bank account to another, you need to record this as a transfer. This ensures your account balances are correct, and that you won't mistake a single movement of funds between your accounts as income (or an expense).

When funds move from one account to another, it's called a transfer of money. For a transfer to take place in Wave, you will need two transactions. One transaction to show from which account the funds originated, and one 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 to your savings account
  • Depositing cash into a bank account

This article details how to create transfers between accounts in the same currency. Read how to create transfers between accounts with different currencies in this article.

To create a transfer:

  1. Click on Accounting on the left side of your screen and select Transactions.
  2. Locate one of the transactions associated with this transfer, and click the dropdown arrow under Actions, then Edit more details to open up the transaction details.

    You can search for specific transactions by navigating to the Transactions page, and selecting Search at the top right. You can search for transactions by amount or description.

  3. Navigate to the Category field and click on the drop-down.
  4. Select Transfer to/from Bank, Credit Card, or Loan.

    You would select transfer to when categorising a transaction under the account where the funds are being received. You use transfer from on the transaction under the account where the funds are being sent from.

  5. Locate the line matching the transaction for the other side of this transfer.
  6. Click Save, and you will notice that the transactions will change from Uncategorized to Transfer to/Transfer from.

Your reports will now correctly record this as a transfer of funds, rather than an uncategorized income or expense.

The two transactions must be located in different payment accounts, so you can show the flow of money from one account to the another.

What to do if there are no matching transactions

If you categorize a transaction as Transfer to/from Bank, Credit Card, or Loan, you may not be given the option to match with a transaction. A few possible reasons for not being given the option to match with a transaction are:

  • 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 transactions are in a different currency.
  • The dates of the transfers are too far apart.
  • The other side of the transfer is already categorized.

A transfer in Wave cannot exist without both sides of the transfer being recorded, so Wave automatically creates the other transaction for you, with the description Created Transfer. This occurs when you save a transaction categorized as Transfer to/from Bank, Credit Card, or Loan, without selecting a matching transaction. This transaction will be recorded on the same date as the transaction you categorized as Transfer to/from Bank, Credit Card, or Loan, with the account being set to the account you selected in the Account dropdown.

Examples of transactions which don’t require a transfer

Sometimes you may have only one side of a transfer to record. If you are moving funds from one account in Wave, to an account that doesn’t exist in Wave, for example, a personal account, you don’t need to record this as a transfer. When this occurs, you can use the category Personal Expense/Withdrawal and then select the most suitable equity account, for example, Owner Investment/Drawings.

If you are making a payment to a vendor, this wouldn’t be categorized as a transfer either. This would be categorized as an Expense.

We highly recommend checking in with an accountant if you’re unsure of which category works best for your business when entering your transactions. Suggesting specific categories is beyond the scope that Wave can advise on.