Add a year-end adjustment to reset prior fiscal year reconciliation

Create an adjustment entry

Reconcile your account

Creating an adjustment entry for a specific bank account resets your Wave balance to match your bank balance on a specific date. Adjustment entries can be used if you have entered transactions in previous fiscal years, but only need to reconcile the current fiscal year.

If you are not familiar with adjustment entries, ask an accountant for guidance. Leaving previous years unreconciled may affect your current year's accounting.

Create an adjustment entry

There are 3 steps you must complete to create an adjustment entry:

1. Determine the difference for the adjustment
2. Create an account
3. Create a journal transaction

Determine the difference for the adjustment

Using a bank statement, find the ending balance on the last day of your previous fiscal year, then:

1. On the left-side menu, click Reports.
2. Open your Trial Balance report.
3. Click the calendar icon, then select the last day of your previous fiscal year.
4. Find the balance beside the account you need to reconcile.
5. Calculate the difference between your bank statement balance and the Wave balance of this account.

Create an account

Create a new account to use to offset the difference between your bank balance and Wave balance:

1. Create a new account.
2. In the Account Type dropdown, scroll down to Equity, then select Business Owner Contribution and Drawing.
3. Enter an account name, such as Uncategorized Equity, and an Account ID and Description, if applicable.
4. Click Save.

Create a journal transaction

Create a journal transaction to offset the new account balance. If the Wave balance is higher than the bank balance, debit the created account, and credit the bank account. If the Wave balance is lower than the bank balance, debit the bank account and credit the created account. Learn more about debits and credits.

1. Create a journal transaction.
2. On the first line, select the account you want to reconcile. In either the debit or credit column, enter the difference amount you calculated.
3. On the second line, select the Uncategorized Equity account you created. In the remaining debit or credit column, enter the different amount you calculated.
4. Click Save.

Reconcile your account

Once you’ve added the adjustment entry, reconcile the account for the new fiscal year. Learn how to Reconcile your books.