Here, we'll show you the main actions you need to take on your accounting/bookkeeping to stay up to date. We’ve created a way for you to get the job done – no technical knowledge or training required.
The core task is to categorize your transactions. You'll want to categorize transactions any time money comes into your business (i.e., you get paid), or money goes out (i.e. you buy something), or money moves around between accounts (i.e. you transfer money from checking to savings). This helps provide an accurate, specific picture of your business' performance!
You do all of this on your Transactions page which is located under the Accounting heading on the left-hand menu.
We will show you in detail how to categorize a transaction. In a nutshell, it looks like this:
- Get the transactions into Wave; there are automatic ways of doing that (more on that later), and manual ways.
- Indicate the category of the transaction (e.g., that Office Depot expense was for Office Supplies).
- Apply a sales tax if applicable.
- Click the Mark as Reviewed button to show that you’re done.
Do just this, for each of your transactions, and your accounting/bookkeeping work is complete!
- The Accounts filter. Here you can change which account transactions you wish to see in the list.
- The Add Income button. Create new deposit transactions using this button.
- The Add Expense button. Create new withdrawal transactions by clicking here.
- The More button (to Connect Your bank, Upload a Bank Statement, or Add Journal Transaction)
- The Mark as Reviewed button.
- The dropdown arrow to open the Transaction Details
- The Category tab. Use this to categorize your transactions.
- The Sales Tax button.
- The Save tab.
How to get your transactions into Wave
An easy way to get your financial records into Wave is to connect your bank and credit card accounts. This will import your transactions into your account automatically.
Bank connection security
To provide you with the highest level of security, we partner with a specialist provider of secure bank data connections, Plaid.
The connection process uses state-of-the-art security measures and encryption to keep your information safe. Your bank credentials are stored in ultra-secure systems by our bank data partner.
The connection Wave makes is a read-only connection. This connection can’t be used to move money into or out of your account. Read more about how bank connections work here.
Connecting to your bank account
- Under Banking on the left navigation menu, select Connected accounts.
- Search for/select your bank, credit union, credit card or other financial institution.
- Enter your login credentials and Connect. Wave will connect with your financial institution, verify the security credentials, and retrieve account information. This process can take a few minutes — this is a good time to grab a cup of coffee.
- Wave lists all the accounts that are available to connect. If you don’t want to connect a specific account, slide the switch next to this account to Off.
It isn’t possible to add your bank account manually, using your account and routing numbers, on the Banking > Connected Accounts page, to import transactions. If you don’t see your bank account listed, that particular financial institution is not currently supported by Plaid. You can add transactions to Wave by setting up Wave Connect or uploading statements instead.
For each account you choose to connect, you will see two options:
- Import into: If the bank account you’re creating matches a payment account that already exists in Wave, choose that payment account from the menu. If not, select “New account” from the dropdown menu.
- Import from: By default, Wave will try to get transactions from as far back as possible. Most financial institutions restrict this to a range of about 1 to 6 months but this can vary. If you only want transactions from this year, or starting 2 weeks ago, or from a different range, you click on "Edit date" to specify a date.
Do this for all the accounts you want to connect to Wave, including your business credit cards, and then click Save and Continue.
Now Wave imports the transactions you asked for, and puts them in the place you've assigned.
Importing account data into Wave
If your bank isn’t one Wave can connect to, if you have older transactions (more than 30 to 60 days old) you'd like to see in Wave, or if you prefer not to connect, you have two options: you can upload your statements into Wave (this is still really quick!), or enter the transactions manually.
Uploading transactions to Wave
- Go to your online banking site, and download an electronic statement in one of these formats:
- Microsoft Money (.OFX)
- QuickBooks (.QBO)
- Quicken (.QFX)
- Simply Accounting (.ASO)
- On your Transactions page, click the arrow next to Add Transaction, then Upload a Bank Statement.
- Choose the statement you downloaded from your financial institution, and indicate the Payment Account, or click the + symbol to create a new Payment account.
- Click Upload.
Enter transactions manually
(Entering transactions manually is the most work, but it’s great for your cash transactions!)
- On your Transactions page, click Add Transaction.
- Enter the details of your transaction in the spaces provided.
How to categorize your transactions
- From the Transactions page, click on any transaction.
- In the Category tab, select (or search) the correct category from the drop-down menu. Don't see the category you need? Head over to Chart of Accounts page in the left navigation menu and add a new one.
Just click on Save once you're done editing the transaction details.
The concept of Transfers is important to understand, and it’s one of our most frequently asked questions. Any time money moves from one account to another, that’s a Transfer, and it can occur in a few different ways. For example:
- You move money from your checking account to your savings (or vice versa).
- You record a cash payment in Wave, and then deposit the cash to your savings account.
- You make a payment on your credit card bill, using money from your checking account.
If you have your bank and credit card accounts connected to Wave, a transfer will usually reveal itself by showing you two different line items for the same thing. So how do you categorize them? You simply select Transfer to bank, credit card, or loan from the Categorization menu. Our system will look for the matching transaction, which you then want to click and Save the changes.
Let’s use the simplest example: You move $50 from your checking account to your savings account. If both accounts are connected to Wave, you’ll see one line with $50 coming out of your checking account, and another line with $50 going into your savings.
Here’s what you do with them:
- On your Transactions page, find one of these transactions and click on it.
- Select the drop-down under Category, then Click Transfer to bank, credit card, or loan and click on the transaction matching the other side of this transfer. The transactions will now be linked together as a Transfer.
- Mark the transactions as Reviewed now by clicking the check box on the right side.
These two transactions have now been matched as a Transfer, and all the underlying accounting stuff is correct. You’re done!
How to apply sales taxes to your transactions
If you collect sales taxes on the products or services you sell, and pay sales tax on the things you buy, you can indicate that on your transactions. If you haven't yet created a Sales Tax, complete the steps indicated here.
- Click on a transaction.
- Click on Include Sales Tax under the Category tab and select the tax appropriate for this transaction.
- Click Save and the tax will be applied to the transaction.
Please note: Tax calculation on the transactions page is inclusive; any sales tax that is added will be included in the transaction total. Wave will provide the amount breakdown under the tax button.
Last step! Reviewing a transaction is your way of indicating that you’ve done everything you need to do on a transaction. You’ve categorized it and you’ve applied a sales tax. (For advanced users, it could also mean adding Notes and more, but that’s not important right now.)
See the check mark at the far right side of each transaction? Click it. When it turns green, that transaction is marked as reviewed.
Reviewing is like ticking something off your To Do list. Your goal is to end up with no unreviewed transactions.
Once in a while, you might hit a transaction where you just can’t figure out what to do with it. Don’t lose your momentum — just skip it and keep going through your list of transactions. Once you’ve done everything you can, you have two options:
- Click on the Help icon from the bottom of the screen on your Wave account to ask a question.
- If your question isn’t about using Wave, but rather about accounting practices, you’ll need the help of a professional. Contact Wave Advisors for coaching or bookkeeping services.