Small business owners must wear multiple hats to operate their businesses. Managing the books to keep track of cash flow and other important information is a necessity of running a business.
For small businesses with less than 10 employees, Wave Accounting software might work for your business needs. Its online accounting software is easy to use so that even those without experience with accounting, can pick it up and use it.
Wave Accounting has free accounting tools that allow you to bank, invoice, and use accounting features to run your business. There are advanced accounting services too if you need more help. If you’re considering accounting software for your small business, read this Wave Accounting review to learn more about what it offers.
What is Wave Accounting?
Started in 2010, by a team of eight employees who worked in a shared workplace, Wave Accounting quickly reached 100,000 customers by the following year. Co-founders James Lochrie and Kirk Simpson set out to create an all-in-one money management solution for small business owners.
Its free accounting software works on the cloud and is one of the only free options that’s available in the market which allows you to manage a multitude of accounting processes.
The free service allows you to manage accounting, bookkeeping, and invoice processes by using a couple of internal integrations. Business owners can use Wave Accounting to customize and send an unlimited number of invoices to customers, manage an unlimited number of expenses and also scan and capture an unlimited amount of receipts.
Without prior accounting experience, you can design accounting reports, search for transactions, and reconcile data. Its cloud-based software will also automatically calculate sales tax, provide cash flow insights, and allow you to customize payment terms.
Who is Wave Accounting Software best for?
Wave Accounting is geared towards small businesses that have less than 10 employees and freelancers. It helps manage double-entry accounting using cloud-based accounting software that’s easy to use.
If you’ve never done accounting or finance management before, Wave offers an easy-to-use platform that makes it simple.
Free Wave Accounting Software
Wave offers solid accounting software to users for free.
Below is a breakdown of the free Wave Accounting features you get.
You get professional-looking invoices that are customized to your brand. Wave invoicing includes sending automated reminders. Payments made by Apple pay, credit card, and bank payments can be applied directly to invoices.
The free software on the accounting side allows you to track an unlimited number of income and expenses. Small businesses can also add an unlimited number of partners, collaborators, and accountants.
One of the key accounting features is the dashboard view that you can easily scan to make decisions like whether you should charge your clients more. You can also connect an unlimited number of bank accounts and credit card accounts. The free version also includes reporting like “Profit and Loss” and “Overdue Invoices”.
Wave helps simply the tax season by keeping your personal and business expenses separate. Instant payouts are available at no additional cost with a Wave bank account.
When using your Wave debit card to make purchases, those charges are automatically logged and categorized. The mobile app allows you to deposit checks into your bank account and track your income.
Paid Wave Accounting Services
Just the free version of Wave Accounting offers a nice set of features to handle double entry accounting and much more. The invoicing, accounting, and banking capabilities go beyond just basic accounting features.
However, some small businesses need more advanced features to run their business. Here are some of the features of the more advanced accounting plan options that Wave offers below.
Going beyond creating invoice templates to send clients, Wave’s payment services give you the ability to collect money from them. You can accept payments from Apple Pay, bank deposits, and credit cards.
Payment tracking is simplified by cutting out the manual entry of these payments. Invoice payments are automatically synced and updated on your dashboard.
Money is available in your connected bank account as soon as 2 business days if you live in the US or 1 business day for Canadian residents. For retainer clients, you can set up recurring billing and payments.
To accept payments with Wave, the fee structure is based on usage. Here are the fees you’ll pay:
- Credit Cards – 2.9% – $0.60 per transaction
- AMEX transactions – 3.4% +$0.60 per transaction
- Bank payments – 1% per transaction ($1 minimum fee)
The payroll service that Wave Accounting offers can help make it easier to pay your contractors and employees. The payroll function allows you to deposit paychecks directly into your employee’s bank accounts with a click of a button.
The payroll functionality also provides employees with a portal where they can access their paystubs and tax forms. Here is a breakdown of the costs for Wave’s payroll software:
- Tax service states – $35 per month
- $6 per active employee (monthly)
- $6 per independent contractor (monthly)
- Self-service states – $20 per month
- $6 per active employee (monthly)
- $6 per active independent contractor (monthly)
Does your small business need more guidance when it comes to managing your accounting books? Wave offers accounting coaching or support through its team of experts.
Wave advisors can help with bookkeeping, accounting, and payroll questions. The advice you’ll receive is tailored to your business goals. You can tap Wave advisors throughout the year.
For these paid services, you’ll pay the following:
- Bookkeeping support – $149 per month
- Accounting and payroll coaching – $329 one-time fee (additional plans are available)
Below is a list of the features available with Wave:
- Tax Support
- Client Portal
- Contact management
- Expense Tracking
- Chart of accounts
- Accounts payable
- Time tracking (available with Wave Payroll)
How to Sign up for a Wave Account
Opening a free Wave Accounting account is easy. Simply click on the button for a free account on Wave’s website. You’ll share your email address and create a password. There is also the option of signing up using an existing Google email account if you prefer.
Wave will then ask you for a few basic details like your name, the name of your small business, and what your business does.
Then it will ask you to choose a starting point as far as what you want to do with Wave. Options include creating customer statements that can be sent to clients, managing your accounting, and payroll management.
This question can also be skipped if you prefer or you can answer that you’re not sure yet.
Based on your response, Wave will ask additional questions. For example, if you’re primarily interested in the accounting component, it’ll ask how you manage your accounting, whether you work with an accountant, and if you run payroll.
The entire process takes less than 5 minutes to complete. Once your account is created, you can start setting up your small business with Wave payments, start creating invoices, recurring billing, or use Wave payroll features.
Wave Accounting Pros and Cons
Pro: Free Business Finance Tool
Unless you need a system to collect credit card payments or manage payroll, Wave is free to use. For a small business without many employees or contractors, accounting services could suffice.
Pro: Dashboard is visually appealing and useful
Wave Accounting has a great-looking dashboard that is also easy to understand. Business owners can use it to gain key insights into ways to improve their cash flow.
Pro: Support for multicurrency
When choosing Wave Accounting, you can deal in U.S. dollars or Canadian dollars.
Pro: Great invoice and transaction management system
If you wish to use Wave Accounting for credit card processing or invoicing, the platform offers great tools.
Pro: Unlimited invoices, expenses, and receipts
Your expenses, receipts, and invoice parameters have no limit. There is no need to worry about things like having too many previous invoices in the system.
Pro: Robust reporting capabilities
Financial statements and reporting are straightforward and offer strong tools for business owners to leverage when managing this side of their business.
Pro: Easy to use
You don’t need to be familiar with balancing your books when choosing Wave Accounting. Its software solutions are geared towards those with limited or no experience with accounting.
Con: Not suitable for medium-large businesses
Wave may work well for micro-businesses or small businesses with less than 10 employees. But its platform is not built to support the needs of larger businesses.
Con: Mobile app limitations
There is a Wave Money (for business banking) and Wave Invoicing app available for on-the-go use. However, the features and capabilities are limited.
Con: Integration tools are poor
Wave supports Zapier integration which allows Wave to account for over 1,000 add-ons. PayPal, Etsy, and Shoeboxed are among the connections that can be made. However, overall the number of integrations is limited.
Con: Slow customer Service
Users have reported that customer support is often very slow. Wave Payroll, advisors, credit payment processing, and other paid services are the only ones that offer live chat or email support.
Con: Lacks additional functionality
Extra services like Wave Payments allow you to accept credit card payments which are certainly important for running a business. But there aren’t additional functionalities like inventory management and time tracking.
Con: No Budgeting tools
Wave doesn’t have any budgeting features that a small business can use to help manage its cash flow better.
Con: Reporting limitations
There is a lack of financial reports available on Wave that would be helpful for business owners to have access to.
Bottom Line: Wave Accounting Review
Micro businesses and small businesses with less than 10 employees will find a lot of value in the free accounting software that Wave offers. The additional services are a nice add-on to help you with other aspects of the business. It may not cover all your business finance needs, but there are other solutions out there to help you with those.