Wave Accounting Review: Features & Pricing in 2023

Wave earned high marks for general features because of its good usability rating. It’s fast to set up a new account, and it’s simple to add business information, such as company name, type of business, address, and contact details.

By default, Wave sets up your chart of accounts based on common accounts and categories, but you can add other accounts if you need to. To add an account, go to the Chart of Accounts page under the Accounting menu, and choose from the tabs at the top of the page for the account or category you wish to add:

Adding a New Account on Wave

While it’s easy to use, we encountered several issues with its general features. There’s no option to set up two separate classes or locations, which can be difficult if your company has different locations or offers several classes of products or services. However, we were able to successfully add a new user and limit access to each user.

Some other inconveniences we found include the inability to use account numbers in your chart of accounts, import bank balances, and import your chart of accounts. Another feature of good accounting software is the ability to close a prior year to lock previous transactions, but Wave also falls short on that.

One of Wave’s biggest strengths is managing unpaid bills, which is critical in the accounting process. Your A/P transactions can be conveniently managed from the Purchases menu, which consists of all the features you need to record your purchases: Bills, Vendors, and Products and Services.

We like how easy it’s to record a new bill and enter an expense without paying. You can snap a photo of your expense receipt and upload it to Wave through the mobile app.

To record a bill in Wave, click on the Create a Bill button, and then the Add bill screen appears:

Creating Bills on Wave

Unfortunately, you can’t create a recurring transaction directly from the bill, which is something you can do in other software like QuickBooks. You also can’t create recurring expenses and create and send purchase orders (POs).

As a free software program, it’s surprising that Wave can also

• Track 1099 independent contractor payments
• Create products or services to auto-fill bills
• Record partial payments to a vendor

Wave’s ability to manage sales taxes and invoices is impressive. There are different ways to customize your invoice, including the ability to choose from different templates, add your logo, change colors, and include a personalized message. You can add a new customer while creating an invoice and add inventory to your invoice before emailing it to your customer:

Sample Invoice from Wave

Other tasks you can perform in Wave’s A/R system include:

• Set up recurring invoices
• Create a product or service item to auto-fill invoices
• View outstanding invoices without generating a report
• Track sales tax collected and remitted by jurisdiction
• View detailed tax reports

While Wave has a good invoicing capability, it still comes up short in terms of other features. For instance, you can’t combine multiple checks in a single deposit, issue a credit memo to a customer, or add tracked expenses to an invoice.

You can connect your bank account to Wave and upload bank statements to synchronize your transactions. Instead of establishing a live connection with your bank, you can import QuickBooks Online files, which is very convenient.

However, if you’re looking for accounting software with a good bank reconciliation feature, look elsewhere, as bank reconciliation in Wave is very limited. While it has an automatic reconciliation feature, it doesn’t allow for any reconciling items, such as checks written but not yet processed by your bank.

Also, if you need to print dozens of checks, you’ll prefer QuickBooks Online to Wave. Wave users have to write checks by hand.

You can’t count on Wave for managing fixed assets, which isn’t surprising for a free software program. In our case study, FSB purchased a job trailer with a bank loan. Wave will record the purchase price in the fixed asset and note payable accounts—but that’s the only thing it does.

There are no options to track or view your list of fixed assets. Also, you can’t set up separate depreciation for fixed assets or create loan amortization schedules. If fixed assets are a big part of your business, consider Xero because it’s an affordable option with a comprehensive fixed asset manager.

Wave isn’t ideal for contractors and other companies needing project management features. You can create and send estimates, but you can’t assign those estimates to individual projects. You also can’t track actual income and expenses by project.

Creating an Estimate on Wave

You might find the estimate feature helpful, but we recommend you check out our list of the best contractor accounting software for more comprehensive project accounting features.

Wave allows you to add sales taxes to invoices, bills, estimates, and expense and income transactions. Whenever you enter a transaction with a sales tax, it records the amount automatically in the sales tax liability account.

While you can track your sales tax in Wave, there’s no way to file your returns or pay your tax liability. This feature is also handy if you’re working with independent contractors and need to generate a 1099 form for tax filing. The sales and income tax features are evaluated across the other categories, so it has no separate video.

Wave’s inventory management feature is very basic, so if you’re a product-based business, you should consider alternatives like QuickBooks Online or Xero. You can add a product or service, but not the quantity purchased or sold. This means that Wave can’t calculate your cost of goods sold, which is important if you deal with inventory.

We examined Wave’s inventory management feature across the other categories, mostly Accounts Receivable and Accounts Payable.

Wave scores high in this category because of its robust reporting capability as free software. We tried to generate 16 types of reports and successfully generated the following: profit and loss statement, cash flow statement, A/P aging, A/R aging, general ledger, trial balance, transaction list by customer, and expense by vendor. In addition to missing some desired reports, Wave’s reporting feature doesn’t allow for customizing your reports.

Wave has limited customer service. You can’t chat with a live person if you’re just using the free features of Wave, and you can’t contact them over the phone or through email. Live support is available for users who process payments in Wave. You can browse through some self-help resources, like set-up guides and troubleshooting tips, from the Help Center or through the chatbot.

You can access personalized support through the Wave Advisor program where you can get coaching and year-round advice from a Wave expert. These support services are expensive for most small businesses, and we can’t fully recommend them to you unless you have a budget to spare.

Overall, Wave is easy to use and has a low learning curve. The interface is clean and not overwhelming. Even if you don’t have accounting experience, you can familiarize the features of Wave in less than a week.

Instead of a single application, Wave uses two separate mobile apps with very limited features. They perform pretty basic tasks, like sending invoices, receiving payments, and capturing an expense receipt. You can’t set up and create projects, track time worked, categorize bank transactions, and view reports, which can be a problem if you often do business on the road.