Getting started with

Accounting by Wave


Shoebox accounting stops now.

With a million and a half people using Wave, we've learned how to make accounting easy for small business owners, consultants and freelancers.

No jargon. No complicated software. No MBA required. Just check out these easy steps, and you're on your way.

Welcome to the Wave community, 1.5 million strong and growing!

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Get your numbers into Wave

In order for Wave to crunch your numbers, we need to get your income and expense transactions in the system.

There are 3 ways to do this, and they all start at the top of your Transactions screen.


Add transactions

Most people will do Option 1, below (recommended). In that case, you can ignore the other options and just move right on to Categorizing.


Option 1. Connect your bank & credit card accounts

The easiest way to get your numbers into Wave today, and keep them updated from now on with no extra work, is to securely connect your bank and credit card accounts to Wave. Here's how you do it:

  1. Sign into Wave, and go to your Transactions page (second icon on the left-hand side).
  2. Click the "Add bank account" button.

    Add bank account

  3. Search for your bank, credit union, credit card or other financial institution, and follow the prompts.
  4. Along the way, you'll specify whether each account (your checking account, savings account, and so on) is primarily for business or personal use. (When in doubt, call it Personal.)

That's it. In minutes, Wave will import about 3 months worth of data (the maximum allowed by most banks) and you'll be up and running. And more importantly, Wave will update your account several times a week, with no extra work needed on your part!

Once you're connected, you can skip everything else on this page and start to Categorize.

Secure

Secure, read-only connection

Wave's accounting features can never be used to move money out of your account. The connection we make to import your transactions is a read-only connection. Your credentials are encrypted and stored by a world-leader in bank connection technology. To date, Wave has downloaded more than 65 million transactions, safely and securely, to save our customers time and money. Learn more about our security features.


Don't want to connect your bank accounts? No problem you still have options.


Option 2: Upload a bank statement

The second-best way to get your numbers into Wave is by downloading a statement from all of your bank accounts, and uploading those statements into Wave. Click the "Upload a bank statement" link at the top of your transactions screen and follow the instructions, or check out the FAQs for detailed instructions.


Option 3: Do it old school!

We've designed the bank connection and statement upload features to save you time. But you can also enter each transaction individually by clicking the "Add income" or "Add expense" buttons that appear at the top of your transactions screen.


Bonus option: Do it REALLY old school!

If you're a purist who wants to manually work out the debits and credits, click the Accounting icon on the left side, and select the Journal Transactions tab. This is for the real pros who want maximum control.

Categorize

With Wave, you don't need to figure out debits, credits and all that stuff. You just need to be able to categorize.

Let's start with the example of a $900 expense for rent, that came out of a checking account.

One transaction

Here are the simple steps you take in Wave.

  1. When the transaction comes into Wave from your connected account or uploaded statement, the date, description and amount are provided by your bank, so there's nothing to do there.
  2. The category is most likely set to Uncategorized. Use the drop-down menu to select the right category — in this case, "Rent expense".

    Categorize

  3. You can double-check the Account the money came from, but this should also be correct since the info came from your bank.

That's it. Do that for all your transactions, and you're more than 90% done your accounting.

You can use the check boxes on the left to select multiple transactions, and categorize them all at once using the "Categorize into" option that sits above the Transactions list.

Bulk categorization

As you use Wave more, we'll start to make recommendations on category to make things even easier.

Why categorizing matters

As easy as it is, categorizing is the most important, and most common action you can take in Wave. It's what builds all your reports, provides insights into your business, and gets you ready for tax time.


Next up: Sales taxes and vendor info (optional).

Sales taxes and other details

If you need to record the sales tax you pay on your expenses, or want to add extra detail to your transactions, these are the steps you'll follow. If you don't need that kind of detail, skip this lesson and move on to the Verify step.

  1. Select the transaction you want to modify, and click the "Show details" tab that appears below it.

    Transaction details

  2. You'll now see a bunch of fields you can modify if needed. Click the "Select a vendor" field to show the vendors you have already entered into Wave, and select the one you want. If you haven't already added this vendor info, you can do it by selecting "Add new vendor."
  3. Same with sales tax. Click in the Tax box and select a sales tax, or create one for the first time.

    Add details

  4. When you're done, click the Close details tab and your changes will be saved.

So far so good, right? Now, let's learn how to verify a transaction.

Verify: Your To Do list

Once you've categorized, your work is basically done. But we still suggest you do one more thing: Verify.

Verifying doesn't actually change your accounting. But what it does, is lets you know that this transaction is finished, that you've reviewed it and there's nothing left to do.

Why is this useful? Because the default view of your transactions shows you only your Unverified transactions — in other words, the transactions that need your attention. By verifying, you're knocking something off your To Do list. It feels good now, and when you come back to your transactions after an absence, you'll see where you left off.

Verifying is simple: Once everything in your transaction looks right, just click the check mark on the right hand side. The transaction will immediately disappear from view.

Verify transaction

You can see it again whenever you want, by changing your filters to show you your Verified transactions.

You can verify multiple transactions at once, too. Using the check boxes on the left, select the ones you want. Then click the big green Verify button near the top right.

Bulk verify transaction

You're ready to go!

Now that you know how to get your transactions into Wave, how to categorize, and how to verify, you know the basics and you're ready to jump in.

There's more, of course: Wave does some pretty powerful things. Keep on browsing these lessons, or log into your account now to get started immediately.

Receipt scanning

If you've connected your credit cards and debit cards to Wave, or you're uploading your bank statements, all your purchases will automatically appear in Wave. Except...

What about your cash transactions?

You could take the receipt from your cash transaction and enter the info manually using the "Add expense" button on the Transactions page. Or you can use Receipts by Wave, the free receipt scanning app for iOS or Android.

With Receipts by Wave, you snap a photo with your phone, and it magically appears as a new transaction in Wave.

You can learn more about receipt scanning in the Wave University section on Receipts by Wave.

Chart of accounts = Categories

In traditional accounting terminology, your "chart of accounts" is the list of things you might spend money on (like a rent expense), or places you put money you have (like a savings account). That's a simplification, but you get the idea.

When you're on your Transactions screen, each time you select a Category for an income or expense item, you're assigning it to one of the accounts in your chart of accounts.

Category

At Wave generally use the term "categories" (because we hate confusing jargon), but in most cases you could use "chart of accounts" to say the same thing.


Customizing your categories/chart of accounts

Wave pre-selects categories to include in your chart of accounts, based on the kind of business you're running. For instance, if you're a Web developer, Wave will automatically give you "Computer - hardware" among your default categories. If you're a farmer, Wave will give you "Fertilizers & Lime."

Since every business is unique, you can customize your categories to fit you better. Here's how:

Adding categories on the fly

Let's imagine that you're already on your Transactions page, putting everything in its place, and suddenly you realize that you don't have a category for one of your expenses. Adding it on the fly is easy:

  1. Click the Category drop-down for that transaction, and select "Add new category."

    Add category

  2. Choose a new category from the list that appears and save.
  3. This new category is now part of your chart of accounts, and will be available to you whenever you need it in the future.

And what if the category you want doesn't exist among the options? No problem. You can create a custom category, too:

  1. The full list of categories is broken down into sub-groups, such as "Cost of goods sold." Pick the sub-group that's closest to what you're looking for.
  2. At the end of each sub-group is an "Other" category, like "Other cost of goods sold." Select it.
  3. A window will open up with a Name field. Type in the name you want for your custom category, then click "Add category."
  4. This new category is now part of your chart of accounts, and will be available to you whenever you need it in the future.

If you're feeling really organized, you can tackle your chart of accounts all at once, too — kinda like a housekeeping exercise. Here's how.

Full configuration of your chart of accounts

  1. Go to your Accounting page by clicking the Accounting tab on the left hand side.

    Accounting icon

  2. You'll be looking at your full list of accounts, in their sub-groups like Expense and Asset.

    Chart of accounts

  3. Categories labeled "System account" are essential for Wave to do its complex calculations, so they can't be modified or deleted.
  4. Categories labeled with a pencil icon and an "x" (Pencil icon) can be re-named or deleted according to your preferences. For example, you might want to rename a category called "Credit Card" to something more meaningful to you, like "Platinum MasterCard."
  5. Categories with an "x" beside them (X) can be deleted.

Important note! Deleting a category will not delete the transactions associated with it. For example, if you have a transaction categorized as a rent expense, and then you delete the "Rent expense" category, the transaction will live on in Wave, as an uncategorized transaction. (Until you re-categorize it.)

If you want to add a new category:

  1. Click the Add an account button at the top of the page.

    Add bank account

  2. The box that appears has a search bar at the top, and several tabs (Asset; Liability/Credit Card; Income; Expense; Equity) below. To use the search bar, first click the tab you want to search and then start typing.
  3. Alternately, just pick a tab and browse through all the folders to see what's available.
  4. If the category is customizable (if it can be renamed), you'll be given that option when you select it. If not, you'll be given a warning that the fields are not editable.
  5. For certain categories, you'll be asked if the category represents a "Payment account". If it's an account that you could move actual money in and out, like an investment account or a bank account, check the box to indicate yes.

That's it! Armed with this info, you can tweak your Wave categories for a sleek, perfect fit.

Advanced features: Become a Wave superuser!

When you're ready for it, there are additional advanced features to handle more sophisticated accounting and bookkeeping needs. As powerful as these features are, they're still built so that a non-accountant can easily use them.


Splitting transactions

You make a $425 purchase at Staples, let's say. You want to assign $100 as Office supplies, and $325 as Furniture. Learn how. Learn how >


Merging transactions

Did you get the same transaction into the system twice? For example, your bank connection brought in an expense transaction, and you also scanned the receipt when you made the purchase? Merge them into a single transaction in seconds. Learn how >


When business and personal finance mix up

We know small business owners. So we know that sometimes you use a business credit card to make purchases for your family, or you use a personal account to pay for office expenses. We've made it easy to clean things up. Learn how >


Transfers

When moving money between your bank accounts, or making a payment from one of those accounts to your credit card, you'll wind up with 2 offsetting transactions. We'll show you how to get it under control. Learn how >

Have more questions?

Here are some additional resources to answer any questions you may have about Accounting by Wave: