Wave is a free and user-friendly online accounting program. It's extremely popular, but, as you can read in our full Wave review, the CommQueR.com team feels that its paid competitors just have that little extra bit of edge when it comes to advanced bookkeeping.
Designed for non-accountants, Wave makes setting up your account quick and bookkeeping easy. It syncs with bank accounts and credit cards and, if you’re tracking receipts for tax purposes, you can just snap a picture with the app. It offers an easy invoicing system that automatically updates when they’ve been paid, too.
If you’re tired of receipts falling out of your wallet every time you buy a cup of coffee, or can’t remember if you invoiced a key customer for last month’s business, Wave is a great option for doing your books in the cloud. Let’s have a look at one of the best accounting solutions on the market.
- Free, with pay-as-you-go for additional services
- Sync data from credit cards, payment processors & bank accounts
- Multi-currency option
- User-friendly & simple interface
- Transactions backed up in the cloud & secured with 256- bit SSL encryption
- Cannot track time
- Charges for payroll processing
- Automated Clearing House transactions carry 1 percent fee
- Percentage & per-transaction credit card fees
Wave’s basic features include everything that its competitors charge monthly fees for. Easy, automated and unlimited invoicing allows you to stay on top of incoming revenue. Its income and expense tracking tools provide an up-to-date snapshot of your business’s financial health and it has online payment options, as well.
Once linked, Wave syncs with your bank and credit card accounts. It generates standard reports, which businesses can use to guide bigger decisions.
It does not offer the ability to track the time and expenses related to projects, fixed assets or inventory functions, but not all business need those functions.
All of Wave’s basic features are free, while its competitors, such as FreshBooks and QuickBooks Online, charge monthly fees for the same.
Overall, Wave offers an amazing value for the money, especially since you don’t have to pay to use it. Payroll and credit card processing are the only services it charges for, but, as we’ll address below, if you have fewer than 18 employees, Wave is still more cost-effective than competitors.
Wave makes its core accounting functions available for free. For comparison, competitors FreshBooks and QuickBooks Online charge monthly fees ranging from $10 per month to $60. Check out our FreshBooks review and QuickBooks Online review for more information.
Where Wave does charge fees, payroll and credit card processing, it’s worth comparing the options. Wave currently provides tax services in six states. It charges a $25 per month base fee plus an additional $4 per month per employee to do so. For all other states, the monthly fee is $20 plus $4 per month per employee.
In contrast, QuickBooks Online’s basic payroll service is just $19 per month plus $2 per employee for each of its pricing plans. That is less expensive, in terms of both monthly fees and per-employee fees. QuickBooks Online’s full-service payroll option is $49 per month plus $2 per employee fee. It’s available throughout the U.S.
QuickBooks Online vs Wave
Once you employ more than five people, you’ll pay more for Wave than you would with QuickBooks Online’s Simple Start plan with enhanced payroll. With full-service payroll, though, Wave remains more cost-effective up to 18 employees. That said, since it only offers full-service in six states, it might not be an option for you.
FreshBooks only offers payroll processing through apps. The most popular one, Gusto, costs $39 per month plus $6 per employee per month. Even with monthly plans that cost less than QuickBooks Online, it’s not a good value if you need payroll processing.
With Wave, ACH payments are subject to fees of 1 percent of the transaction, with a $1 minimum. Quickbooks processes them for free.
If most of your customers prefer to pay by credit card, you should take into account the different fees charged for credit card processing. Wave charges 2.9 percent of the transaction amount plus a 30-cent transaction fee.
QuickBooks Online charges the same percentage, but its per-transaction fee is only 25 cents. That’s if your customer pays using a card through the invoice, though. For manually entered credit cards, the rate jumps to 3.4 percent of the transaction amount plus 25 cents per transaction.
FreshBooks charges the same for credit card transactions, as well, except for American Express. Its take increases to 3.5 percent plus 30 cents per transaction for that card.
When deciding which cloud-based software accounting system to use, consider the average amount of credit charge transactions your business processes each month. Percentage and per-transaction fees add up quickly. If your business doesn’t need inventory tracking or fixed asset functions, Wave is a strong contender to meet your needs.
Invoicing can be a time-consuming process that many people avoid. Wave’s invoicing system lets you spend less time chasing money and more time making it.
Navigate Wave with the main menu on the left side of the screen or by clicking back and forward arrows.
To find invoicing on the main menu, expand the drop-down menu under “sales” and select “invoices.” Setting up a new customer is simple, click on the “add a customer” box on the left side of the invoice. A pop-up will appear for you to enter the customer’s details, including contact information, billing and shipping addresses.
After that, complete the invoice’s fields, which are standard bookkeeping invoices. Wave won’t send an invoice until you approve the draft. The service automatically sets up invoices so your customers can pay online. When you click “send,” another window pops up so you can send a message with the invoice, send it as a .pdf or send a copy to yourself if you want.
Wave then gives you the option to select when and how often you want reminder emails to be sent to your customers if their invoices haven’t been paid. FreshBooks only lets you send up to three payment reminders, while Wave offers up to seven options for follow-up. Quickbooks Online doesn’t offer automatic payment reminders.
Recurring Billing in Wave
Wave recently added automatic recurring billing, which will be a useful, time-saving feature for those who have clients that they bill monthly for goods or services.
When a customer sends a payment through Wave, the system records it for you. To log other payments, select “record a payment” from the drop-down menu next to the invoice on the main invoices screen. If your client has a credit card on file, charge it, or record payment by cash or check.
The process of setting up and sending an invoice takes less than five minutes for a new customer and even less if the customer you’re invoicing was already entered in Wave. Like FreshBooks and Quickbooks Online, Wave offers customization options for your invoices by adding a logo or changing colors.
Business owners who don’t track their expenses won’t have a good grasp on their business’s profitability. Without real-time tracking and staying on top of entering expenses, your business could be in the red for weeks while still showing positive cash flow if items haven’t cleared yet.
To create a bill, you can select “bill” from the options under “create new” on the dashboard. Alternately, from the left-side navigation menu, expand “purchases,” then select “bills.” The first path takes you to the standard bill form. The second will require you to click “create bill” on the next screen.
In the box on the right, enter the expense’s details and add a vendor, then scroll down to “category” and look under “expense accounts” to enter the expense type. You can also click the “add expense” button. If you do, Wave marks it as an “uncategorized expense” until you change it. Expenses can be assigned numbers and have notes added to them, as well.
Note that, while you can add lines to the bill, there is no place to add taxes. If you’re required to pay taxes on your bills, you won’t be able to separate and track them separately.
If you want to know how much you’ve spent on mailing supplies in the last three months, you can in a few steps. Filters on the transaction screen let you search for all the expenses in a category by date range, status or type. Quickbooks Online offers the same feature as a “search” function, but it takes more steps. Wave also has a handy pie chart on the main dashboard.
Wave’s software pulls in expenses from synced bank accounts. If you pay bills by check, manual entry is a snap. Just click on the arrow button to the bill’s left, click “add payment” and fill in the details.
Wave doesn’t offer recurring payments. Even if your electric bill is the same each month, you’ll have to enter it over and over again. According to comments in Wave’s support forums, it knows users want the feature, but, as of March 2018, isn’t planning to add it. If your business has a lot of fixed expenses, the lack of this time-saving feature could be a deal-breaker.
After logging in to Wave, the dashboard on the first screen will give you an up-to-date report on your business.
Cashflow, profit and loss, overdue bills and invoices are all there. With cashflow at the top, it’s easy to see money flowing in and out. Wave calculates your net income and breaks down your expenses, too, which you can see if you scroll down.
While that’s all you probably need on a day-to-day basis, clicking “reports” on the navigation menu will present the three standard financial statements: profit and loss (also called income statement), balance sheet and cashflow. Those are statements every business person should consult on a monthly, quarterly and annual basis to monitor their business’s performance.
Other reports related to taxes, customer and vendors dig deeper into different areas of your business.
Wave puts reports on the amount of sales tax you’ve collected and paid under the “stay on top of taxes” section. It also includes information on wages and payroll taxes there.
The sales tax report is laid out intuitively and the information it presents is easy to follow. It calculates your net tax owed from the sales subject to tax you made and sales tax you paid on your purchases. Unlike QuickBooks Online, you can’t pay your sales taxes through Wave.
The only two customer-focused reports are “income by customer” and “aged receivables.” The “income by customer” only shows income. It doesn’t net after expenses for a gross profit by customer and the only customization option is the date range.
The “aged receivables” report looks nice, with overdue invoices laid out in columns, includings “30 or less,” “31 to 60” and more. You can see the gross total and the totals for each bucket at a glance.
Similar to the customer reports, the vendor reports are limited to “purchases by vendor” and “aged payables.” Their layouts and appearance are the same as the customer reports.
The last set of reports Wave provides are labeled “dig deeper,” but, with only three reports available, you can’t go very deep. They are just basic reports that an accountant or auditor would request: account balances, the trial balance and the general ledger.
Unlike Quickbooks Online, neither Wave nor FreshBooks has an ad hoc reporting feature or customizable reporting. You don’t get a broad selection of reports from Wave and it only lets you change the date range on them.
Wave puts the core financial statements at the top of its reporting options. There, you can find the profit and loss, balance sheet and cashflow statement.
Wave doesn’t offer financial statement reports that calculate percentage change, nor does it allow you to how line items are grouped. You can change the date range and select a comparison period. That’s it for custom options.
Smaller businesses won’t need to prepare a discussion of results for upper management or a bank. They can probably calculate the information they need to guide business decisions from the basic financial statements.
As your business grows, though, you might want more functionality and tools to help you make decisions. Wave doesn’t give you that.
If you’re considering a new cloud-based accounting software program, you’ll want to think about the amount of support you’ll get if you have issues. While Wave is intuitive, even the most technology-savvy user can run into problems.
On its support page, Wave publishes guides that cover the basic tasks for setting up a new business. It also has troubleshooting tips and a guide to accounting concepts and principles if you want to do it all yourself. “Featured content” contains links to blog posts, videos and free webinars that Wave hosts for its users.
No matter where you navigate in Wave, if the left-hand menu is open, you’ll see a “help?” button. Clicking on it will bring up a box on the screen’s right where you can enter your question and search the help library.
If you can’t find your answer in the help library, click “contact us” and the box’s contents will change to a screen where Wave asks what you need help with. Then, you can send an email with up to five attachments to illustrate your problem. Many help libraries will make you jump through hoops and try to force you back to the help library. It’s nice that Wave doesn’t do that.
Only customers who use Wave to handle their payment processing can contact help by phone. Everyone else has to go through the email system. Overall, Wave puts thought and effort into anticipating your questions and answering them through resources on its website.
Wave gives business owners the ability to see their business’s financial condition at a glance. Payroll, invoicing and credit card payments all sync together, enabling you to check on your business’s health without waiting for an accountant to reconcile your books at the end of the month.
You don’t need training or tutorials to use Wave’s interface. Its learning curve is much less than Quickbooks Online’s, but steeper than FreshBooks’s. That’s primarily because it has more features than FreshBooks, though.
Wave doesn’t offer fixed assets management, so you’ll still have to track everything in an external spreadsheet. A business with many fixed assets to track and depreciation to calculate might want to look at other cloud-based accounting software. The same is true if you’re a product-based business that stores inventory on site.
Wave’s standard reports are basic and don’t offer customization options. Once your business reaches a certain level of complexity, you may outgrow them and wish you could dive deeper. Evaluate your long-term growth goals and potential before going with Wave.
If you’re a small business owner without much money to spend on accounting software, and you need to get your books up and running quickly, Wave is an excellent choice. The time between signing up for its service and getting your business’ accounting on track is minimal and cost-conscious small businesses will appreciate that it’s free.
If you’ve tried Wave, what did you think? Did you end up using its service or going with a competitor? Let us know in the comments below. Thanks for reading.