When you accept a check for an invoice payment, but don't receive the deposited funds until a later date, the payment should be recorded to a Money in Transit account. This ensures the invoice is marked as paid on the correct date and your bank statement reconciles with the check deposit.
A Money in Transit account tracks the funds that are expected to be deposited into or withdrawn from a bank account at a future date, usually within a few days. Learn how to Add a new account or category.
Bookkeep an undeposited check
When you receive a check for an invoice payment:
- On the Sales & Payments > Invoices page, apply the payment directly to the invoice. Learn how to record a payment on an invoice.
- For the Method, select Check.
- For the payment account, select the Money in Transit account.
- Click Submit.
If the check was not for an invoice payment, you can create an income transaction to reflect the money received instead.
Bookkeep a deposited check
If you have a check payment that you did not account for while it was undeposited, record the invoice payment or categorize the income transaction as normal.
Once the check is deposited, and the income transaction has been created in your Wave account:
- Locate the income transaction on your Transactions page.
- Categorize the income as a Transfer from Bank, Credit Card, or Loan and select your Money in Transit account from the dropdown menu. Learn how to categorize transactions.
You will now have three transactions: the original invoice payment recorded to Money in Transit, the imported transaction, and a Wave-created transaction called Created Transfer to record the funds moving between accounts.
Bookkeep a bounced check
If the check does not clear and the bank reverses the funds:
- Locate or record the withdrawal transaction on your Transactions page.
- If the payment received was for an invoice, categorize the withdrawal as a Refund sent to an Invoice in Wave, then select the invoice number from the dropdown menu.
You can add a note to the invoice that this was for a bounced check. On the invoice, in the Get Paid section, click Edit payment, enter your note, then click Submit.
- If not, categorize the withdrawal as a Refund for income and select the relevant account from the dropdown menu.
- If you are charged a non-sufficient funds (NSF) fee, categorize the expense transaction to an appropriate expense account.