Wave is a free cloud-based accounting software program that allows you to manage your bookkeeping, invoicing, and payment processes in one place. With it, you can send unlimited invoices, manage bills, and classify your transactions for free, and process financial transactions―payroll and payments―at a low cost.
Pros
- Free accounting, invoicing, and bill tracking
- Pretty straightforward to set up
- Easy to record a bill and manage unpaid bills
- Generates different types of accounting reports
Cons
- Not a good fit for large businesses or businesses with inventory
- Can’t set up separate income and expenses by classes or locations
- Can’t reconcile bank statements when timing differences exist
- Limited customer support with free plan
Deciding Factors
Supported Business Types | Freelancers and very small service businesses with little or no inventory |
Pricing | Wave is totally free for its accounting, invoicing, and bill tracking features; additional fees apply for payment processing, payroll, and receipt scanning. |
Free Trial | Free forever |
Payroll |
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Standout Features |
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Customer Support | Chatbot and self-help library; live chat and email are available to customers using one of Wave's paid services |
When To Use
Would you like to learn more about the suite of financial management tools offered by Wave Financial? Check out our guide to Wave Financial software.
Wave Accounting Alternatives
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Best for: Small businesses in general and those looking for inventory features | Best for: Unlimited users and fixed asset accounting | Best for: Mobile app accounting |
Pricing starts at: $30 per month for one user | Pricing starts at: $37 per month for unlimited invoicing and billing | Pricing starts at: $0 for businesses with less than $50,000 annual revenues |
Do you want to know how Wave stacks up against other popular accounting software? Learn through our comparisons of:
We also suggest checking out our guides to the leading Xero alternatives and best FreshBooks alternatives, which include Wave.
Wave Accounting New Features for 2023
- Set and restrict user roles: In the user management settings, you can now invite a user and assign them specific roles. You can set them as Viewer, Editor, Payroll Manager, or Admin:
- Viewers have view-only access and no edit roles
- Editors receive edit permissions for all accounting and invoicing functions but can’t modify or view Wave settings, bank connections, and credit card payments
- Payroll Managers get full access to the payroll tab
- Admins have full access to everything
- Small business coverage and workers’ compensation insurance through Next Insurance: Wave users can now sign up for Next Insurance within the Wave app. Take note that this isn’t an integration with Next—Wave only serves as a portal where you can apply for insurance. Additionally, you can sign up for workers’ compensation insurance from the provider. This coverage is automatically included in payroll. For more details, read our review of Next Insurance
Wave is free for accounting and invoicing. We awarded Wave a perfect rating for pricing because while it charges for payment processing, payroll, and receipt scanning, the fee is very similar to what other software providers charge in addition to their monthly fee. Wave offers the additional services at a reasonable cost:
- Wave Receipts: $8 per month for unlimited receipt scans via their mobile app
- Credit card payments: 2.9% plus 60 cents per transaction or 3.4% plus 60 cents per AMEX transaction.
- Bank payments: 1% per transaction but a minimum of $1 fee
- Wave Payroll: Fixed monthly cost of $40 for tax service states or $20 for self-service states; there’s also an additional $6 per month per active employee or independent contractor. Read our Wave Payroll review for more information.
- Wave Advisor: $149 per month for bookkeeping support
- Accounting and payroll coaching: $379 per coaching session and email support
Fit Small Business Case Study
We’ve developed an internal case study to evaluate accounting software across 13 different categories based on a common set of facts and functions. The graph below shows how Wave scores across each category compared with two of its competitors, Zoho Books and QuickBooks Online Plus. We provide a detailed explanation of the scores in the Features section.
Wave vs Competitors FSB Case Study
Touch the graph above to interact Click on the graphs above to interact
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Wave Free
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Zoho Books $0 to $275 per month
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QuickBooks Online $39 to $200 per month
Wave is a totally free accounting software, while Zoho Books offers a free plan that can be upgraded to higher plans. The free plan of Zoho Books is comparable to Wave since both share similar features. The edge of Zoho Books over Wave is scalability because Zoho Books users under the free plan can upgrade in case they need more features.
Meanwhile, QuickBooks Online is our best small business accounting software because of its comprehensive accounting features like inventory tracking and wide network of ProAdvisors. Overall, Wave is considerably behind Zoho Books and QuickBooks Online because it’s free software. However, we still recommend Wave for users who don’t need advanced accounting features, but only simple income and expense tracking.
Wave Accounting Features
Wave doesn’t skimp on basic features for small businesses, but it also has some limitations, considering it’s free software. In our internal case study, we examined Wave up close across 11 categories and achieved the following scores and results. You can learn more about the features by watching the video of our accounting expert as he assesses Wave based on the case study criteria.
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 in 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. We selected it as one of the best A/P software due to its ability to record a bill. 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, but this requires an $8 per month subscription to Wave Receipts. You can attach a receipt to transactions within the web interface of Wave for free.
To record a bill in Wave, click on the Create a Bill button, and then the Add bill screen will appear:
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. We selected it as one of the best free small business invoice generators. 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, as Wave users have to write checks by hand. Read our QuickBooks Online review to learn more about our recommended alternative.
You can’t count on Wave for managing fixed assets, which isn’t surprising for a free program. In our case study, Fit Small Business 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. Learn more about its features through our review of Xero.
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 in 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 COGS, which is important if you deal with inventory.
We examined Wave’s inventory management feature across the other categories, mostly A/R and A/P.
Wave scores relatively 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 recently retired their separate Wave Receipts app and combined that functionality into the Wave Accounting app, although you’ll need to subscribe to Wave Receipts to activate that function. It’s great that Wave now have a single app, but the app still has pretty limited features. The app performs pretty basic tasks, like sending invoices, receiving payments, and capturing an expense receipt. You can’t input or pay bills, categorize bank transactions, and view reports, which can be a problem if you often do business on the road.
Integrations
Wave can integrate with Google Sheets and BlueCamroo directly from its interface. However, the rest of the integration must be made through Zapier. If you have a Zapier subscription, you can integrate a lot of ecommerce apps.
Wave also integrates with its own suite of products, which include Wave Payroll, Wave Invoicing, Wave Payments, and Wave Money. As a Wave user, you also have access to Wave Advisors, an assisted bookkeeping service. For more information, check out our guide to Wave Financial software and read our Wave Payroll review and Wave Payments review.
Wave has limited customer service with its free plan. You’re only support is through an automated chat bot or by perusing self-help material. However, if you add any paid service to your account you can chat or email with a live person.
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 yourself with the features of Wave in less than a week.
Wave Accounting Assisted Bookkeeping Options
The Wave Advisor program is an in-house bookkeeping, accounting, and tax service from Wave. The advisors are trained employees of Wave who will assist you with your bookkeeping needs. The program has several packages:
- Bookkeeping support: This package is $149 per month. Bookkeeping pros from Wave will handle all your bookkeeping needs per month. You don’t have to worry about anything because a dedicated Wave Advisor will do it for you.
- Accounting and payroll coaching: This package is a one-time payment of $379, unlike the bookkeeping support that’s a month-to-month contract. This program is ideal for business owners or freelancers who want to handle their bookkeeping confidently. Wave Advisors will train you in accounting and payroll so you can DIY it for your business.
If you’re a busy person, we recommend getting bookkeeping support. However, get the coaching package if you’re the kind of business owner who wants to do the bookkeeping yourself.
Wave has very high positive ratings on user review websites. Many users praised the fact that it accommodates unlimited users and offers free accounting, invoicing, and receipt scanning features. Its other integrations, such as Wave Payments and Wave Payroll, were added benefits according to users. However, there were several complaints about poor customer service and limited contact options.
- GetApp1: 4.4 out of 5 stars based on around 1,400 reviews
- TrustRadius2: 7.1 out of 10 based on about 170 reviews
- Software Advice3: 4.42 out of 5 based on about 1,430 reviews
Frequently Asked Questions (FAQs)
Yes. Wave uses 256-bit transport layer security (TLS) encryption for data security, and all accounting data are stored in servers monitored 24/7. Your credit card numbers are also not stored in Wave.
You can invite as many users as you like. When inviting users, you can give them roles to limit their ability to edit, create, or delete transactions or generate reports. To add more users, go to Settings and click Users under User Management.
Yes. You can use the free accounting, invoicing, and receipt scanning features. However, third-party integrations and payment processing are excluded from the free version of Wave. If you want to integrate other apps using Zapier, you have to subscribe to Zapier.
Yes, Wave Payments is Wave’s payment processing solution. It is a pay-as-you-go payment platform, so there are no monthly fees associated with accepted payments on Wave. You only need to pay for the processing fees, which range from 2.9% to 3.4% plus 60 cents per transaction. To learn more about its features, check out our Wave Payments review. Wave also made our list of the best free merchant accounts, where we ranked it best for free invoicing for solo professionals.
Yes, Wave includes a sales tax tracking feature. You can set up multiple sales tax rates, apply them to invoices, and generate reports to help with tax compliance.
Bottom Line
We hope this case study and Wave Accounting review provides you with insightful information and analysis to help you decide whether the platform is the best fit for your business needs. Despite several limitations, it still has plenty to offer small businesses. It contains essential functionality that will help you pay bills, invoice customers, and track your expenses. It doesn’t have the best customer service, but most of its features are easy to use, so you shouldn’t have any trouble setting it up and using it.
User review references:
1GetApp
2TrustRadius
3Software Advice
