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, this would be a Transfer of money. For a transfer to take place in Wave, you will need two transactions. One transaction which shows which account the funds originated, and one showing 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

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 to the right to open up the transaction details.

You can search for your transactions in Wave by navigating to the Transactions page and selecting Search at the top of the Transactions window. You can search for Transactions by amount or description.

  1. Navigate to the Category window and click on the drop-down.
  2. Select Transfer to Bank, Credit Card, or Loan.
  3. Locate the line matching the transaction for the other side of this transfer. 
  4. Click Save and you will notice that the transactions will change from Uncategorized to Transfer To/Transfer From.

You're done! Your reports will 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. Read how to create transfers between accounts with different currencies here.

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” a transaction. But that’s ok! On these occasions, Wave can take care of this for you. A few reasons for not being given the option to match a transaction include:

  • 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

Because a transfer in Wave can not exist without both sides of the transfer being recorded, when you don’t have a matching transaction, a new transaction is created with the description Created Transfer. 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 menu.

Examples of transactions which don’t require a transfer

Sometimes you may have just 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, as this would be categorized as an Expense.

We highly recommend checking in with an accountant if you’re unsure on which category works best for your business when entering your transactions.