Wave Accounting Review: Pros, Cons, Alternatives

Wave Accounting is ideal for micro businesses with less than 10 employees, contractors, freelancers and other service-based businesses on a budget. The free financial management software is user-friendly and equipped with all the basics, including income and expense tracking, bank connections, invoicing and reporting.

However, like most free products, Wave has its limitations, especially compared to more scalable small-business accounting software. One of its biggest drawbacks is its lack of higher-tier plan options for growing businesses that require a richer selection of features.

  • Unlimited invoicing with customizable templates and payment terms; dedicated invoicing mobile app.

  • Unlimited users with varying user permissions.

  • No third-party integrations or higher-tier plans with additional features (e.g., mileage tracking, time tracking, inventory management) to increase functionality.

  • No live support unless you pay for a service, like Wave Payroll or Wave Payments.

Wave Accounting at a glance

Strong invoicing feature competes with that of paid products; app lets users send invoices on the go; offers significantly fewer reports than competitors; no inventory tracking.

Includes tools that help automate the reconciliation process; auto-categorizes transactions for you, but you can’t set up your own bank rules; no global search function.

Allows an unlimited number of users, but is not complex enough for businesses with more than a handful of employees; ideal for very small service-based businesses, freelancers or contractors.

Ease of sharing with accountants

Easy accountant access, but no audit trail.

Only integrates with in-house apps, like Wave Payments and Wave Payroll; does not integrate with card readers for in-person payments.

Support for non-paying users is limited to the chatbot and self-service Help Center.

Can manage multiple businesses for free under one account; lacks project tracking tools, industry-specific reports and transaction tracking tags.

How does Wave Accounting work?

Getting started

You can sign up for Wave quickly and easily online. After providing a few basic details about your business — name, type, currency you use, address — you’ll have instant access to your free account.

Connecting your accounts

Once logged in, your main dashboard will show your cash flow, profit and loss, invoices, bills and other financial insights. From the dashboard (or the Banking menu on the left-hand side), you’ll be able to connect your bank and credit card accounts to automatically download and categorize your transactions.

When you reconcile your books, you’ll navigate to the “Reconciliation” tab within the Accounting menu. If you need to manually edit, add or remove any transactions, you can do so on the Reconciliation or Transactions pages. Next, you can add sales tax (if necessary), create customer profiles and customize your invoice templates.

Wave Accounting has no contract and no hidden charges.

Although accounting and invoicing are separated into two different product sections on the Wave website (shown similarly below), they don’t require separate accounts. These solutions are integrated within your dashboard and you’ll access them both through your single Wave login.

Wave Accounting

  • Unlimited income and expense tracking.

  • Customizable sales taxes.

  • Unlimited bank and credit card connections.

  • Exportable, basic accounting reports and financial statements.

  • Dashboard monitoring for cash balances and invoice statuses.

Wave Invoicing

  • Automatic payment reminders.

  • Ability to turn estimates into invoices once approved.

  • Ability to accept online credit card and bank payments within invoices using Wave Payments (fees apply).

  • Invoicing and Accounting sync automatically.

In addition to its free services, Wave has software and services that do come with fees, including Wave Payments, Wave Payroll and Wave Advisors for bookkeeping support and accounting coaching.

Benefits of Wave Accounting

Free

It’s hard to beat free accounting software, especially if you’re running a small business on a budget. With Wave, you receive a lot of features, like unlimited invoices and unlimited users, that are not always included with other free accounting software options, let alone paid accounting software plans. It also complies with accounting standards, uses double-entry accounting and helps automate the reconciliation process, which can help ensure accuracy and save you time.

Customizable invoicing

Wave’s invoicing is free and unlimited, with three customizable templates and a user-friendly interface, putting it on par with some of the best invoicing software solutions for small businesses. Each template features a different font, and you can select an accent color, add your business’s logo, choose due dates and payment terms, change column titles, add discounts and set up automatic overdue payment reminders for clients. Other capabilities include recurring invoicing and the option to let repeat clients opt into automatic credit card billing.

In addition, Wave’s mobile app lets you send invoices and track payments on the go. The app offers a receipt scanning feature as well, but you have to pay a subscription fee to access it. There’s a fee involved with accepting online invoice payments, too. Customers can pay via credit card, bank payment or Apple Pay.

While Wave has a lot to offer when it comes to invoicing, know that it’s still slightly less automated than some competitors. For example, you have to create a new account for reimbursable expenses if you want to bill clients for job-related costs like gas or raw materials — there’s no option to mark those expenses as “billable” or automatically add markups to them. This isn’t necessarily a deal-breaker, but it might require a bit more bookkeeping work.

Drawbacks of Wave Accounting

Not scalable

Wave Accounting can be a great option if you run a very small service-based business or don’t need more advanced features that alternatives might offer. For small businesses any larger than that, however, Wave is limited. Unlike competitors, Wave doesn’t offer multiple plans to increase the software’s functionality. It’s also missing an audit trail and third-party integrations.

For example, QuickBooks Online doesn’t have a free plan, but offers four paid plans, each with additional features, making it a great choice for scalability. With the higher-tier QuickBooks plans, you have access to inventory management, billable expenses and project profitability tools, none of which are offered with Wave.

Limited customer service

Unless you subscribe to one of its paid products (e.g., payroll, payments, mobile receipt scanning or one-on-one coaching) Wave Accounting only offers self-serve customer support through its chatbot and help center. Paying users have access to live chat and email support Monday to Friday from 9 a.m. to 4:45 p.m. ET, but one-on-one phone support requires a subscription to the Wave Advisors program. Though it’s not uncommon for free accounting plans to come with less customer support than paid ones, some free products still let you communicate with a human to solve an issue. Zoho Books, for example, offers email support to customers on its free accounting plan.

FreshBooks

Pricing: Starts at $17 per month (when billed monthly).

Pros: Like Wave, FreshBooks can be a good choice for micro businesses and solopreneurs. It includes invoicing, estimates and expense tracking with all plans. There’s also a client self-service portal, unlimited time tracking and basic inventory tracking.

FreshBooks has an excellent mobile app that allows you snap photos of receipts, send invoices and track mileage. It offers both phone and email support, too.

Cons: FreshBooks’ lowest-tier plan lacks some basic accounting features, like double-entry accounting reports, accountant access and bank reconciliation. And the first two plan tiers limit the number of billable clients. None of FreshBooks’ plans include an audit trail that accountants can review. Moreover, FreshBooks only includes one user with all of its plans, except the Select plan which includes two; to add users, you’ll need to pay $11 per person per month.

QuickBooks Online

Pricing: Starts at $30 per month.

Pros: QuickBooks Online is the industry standard for small-business accounting software and can be a particularly worthwhile option if you’re going to be working with a bookkeeper or accountant on a regular basis. QuickBooks Online offers four different plans to choose from and is well-known for its robust reporting, record-keeping and project tracking features.

Moreover, you can integrate QuickBooks with hundreds of third-party tools available in the app marketplace. There are also add-on Intuit services like QuickBooks Payroll or QuickBooks Time.

Cons: Although QuickBooks Online is fairly user-friendly, it’s much easier to use if you have some basic accounting knowledge. You may find that this software has a bit of a learning curve.

Compared with free software like Wave, QuickBooks plans are expensive. The most basic plan, Simple Start, costs $30 per month, and the top-tier Advanced plan costs $200 per month, which is a sizable investment if you’re running a business on a tight budget.

Wave Accounting alternatives

FreshBooks is an affordable option for freelancers and small service-based businesses that operate mostly on the go.

QuickBooks Online’s detailed reporting and transaction tracking is ideal for growing businesses.

Zoho Books offers a robust free plan, along with a range of paid plans that feature workflow automation.

Xero lets you add unlimited users in all plan tiers and, similar to QuickBooks Online, can grow alongside your business.

Sage Accounting offers some of the least expensive accounting plans available and stands out for its in-depth inventory tracking.

Frequently asked questions

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