Wave once stood out among accounting applications because it was a free and effective solution for everything short of payroll and customer payments. You must now subscribe to a paid version of the software to get all of its features, but its ease of use, competent invoice and transaction tools, improved mobile apps, and reasonable price still make it a good fit for microbusinesses. If you need detailed record templates and time tracking capabilities (among other features) for a larger small business, however, we recommend the equally user-friendly FreshBooks and Intuit QuickBooks Online, our Editors' Choice winners.
How Much Does Wave Cost?
Wave has a limited free version, Wave Starter, that lets you build customer, product, and vendor records, create and customize sales forms like invoices and estimates, and run reports. This version also includes a dashboard. You can manually enter income, as well as expenses and bills. If you pay for any add-on like receipt scanning ($8 per month) or payroll ($20 per month), you get live person chat and email support. Otherwise, you are stuck with online help and an automated chat bot.
Everything else is available as a part of Wave Pro ($16 per month), which I reviewed. This includes many critical features, including the ability to connect to bank accounts for importing (and categorizing) transactions and send forms automatically through Wave. You can configure Wave to automatically add attachments to transactions, create reusable message templates, and send payment reminders. This version supports multiple users (with roles). Adding payroll capabilities or soliciting help from a bookkeeper ($149 per month) still costs extra.
Xero Early is a dollar cheaper (starting at $15 per month), but it places a limit on invoices. You can get full-featured accounting with no limits through Patriot Software Accounting ($20 to $30 per month). QuickBooks Online is the most expensive service I reviewed; it starts at $99 per month but goes well beyond the capabilities of Wave.
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Setting Up Your Accounting in Wave
Wave's setup process can be quick or time-consuming, depending on whether you create all of your contact and product or service records up front. You must provide some basic business details and can then customize the app by, for example, modifying invoice and estimate forms, setting up sales tax, and specifying your currency of choice. As mentioned, Wave Pro allows for multiple users. If someone other than you needs access, you can choose among multiple roles that limit a user's ability to view, edit, enter, and delete information. That said, QuickBooks provides deeper, more granular user permissions.
A Useful Overview of Your Finances
Wave’s user experience is impressive for an inexpensive application. Its colorful design looks attractive and is very easy to understand.
Once you start populating your company’s data, the dashboard becomes quite useful. You have to scroll a bit to see everything, but you get a great overview of your finances with links to deeper details. This page displays cash flow, expense charts, and profit and loss. There are tables of invoices payable to you and bills you owe, as well as tables and charts that show you your income, expenses, and net income. This screen also has links to common tasks, such as accepting credit cards and adding a customer.
Standard Accounting Practices
Wave supports double-entry accounting, which should make accountants happy. Among other things, this means that the software has a chart of accounts and deals with debits and credits in the background. It helps automate account reconciliation so you can square away your balance in Wave with your bank and credit card statements. This makes it easier to find duplicate, incorrect, and missing transactions. Wave lacks some of the automation competitors have, however. Xero, for example, identifies matching transactions for you.
Simple Transaction Imports
Accounting solutions like Wave aren’t very useful if they don’t allow you to import transactions from your bank and credit card accounts (not available in Starter). To set up these connections, you need to provide your login credentials and occasionally answer security questions (depending on the financial institution). Once Plaid (a third-party account aggregator that's a standard in the financial industry) verifies your identity, your transactions flow into Wave in simple registers that display each entry’s date, description, account, category, and amount. An Action column appears at the end of the row.
When you open a transaction, you get more information and can edit its details. You can add customers or vendors, add sales tax, specify a type (withdrawal or deposit), split the transaction among categories, upload a receipt, and write a note.
Wave might try to categorize some transactions automatically, but it didn’t guess many of mine correctly. The app learns as it goes, however, so it should categorize similar transactions automatically as you continue to use it.
Creating Sales Transactions in Wave
Wave’s customer, product service, and vendor records templates don’t allow the amount of detail as those for many other accounting sites, like Zoho Books, but they’re sufficient for the sales forms the service includes: estimates, invoices (one-time and recurring), and statements.
Invoice and estimate forms are attractive and easy to complete. You can choose from three templates and insert a logo, but more customization options would be welcome. They’re not as aesthetically pleasing as in FreshBooks. You can make them recurring, save them as PDFs, and view them as the customer would on both a desktop browser and a mobile screen. You can also send invoices in multiple currencies.
The landing pages for invoices and estimates provide useful, detailed overviews of your activity, along with the status of your sales forms. Customer statements are simple—a choice of outstanding invoices or account activity one at a time. New features here include attachments, automated payment reminders, and customizable templates for customer messages.
How Does Wave Handle Expenses and Bills?
You can’t pay bills through Wave like you can in QuickBooks Online, but you can record them and mark them as paid, as well as track their status. Wave uses optical character recognition (OCR) technology to read photos of expense receipts you take with a smartphone and (sometimes) turn them into categorized transactions.
It worked fairly well in testing, though the app detects receipts and snaps photos so quickly sometimes that you don't get much of a chance to ensure proper framing. Wave picked up the amount, date, description, and type but missed the categorization. You can also create an email-forwarding address so that you can email copies of receipts to your Wave account.
Basic Reports and Taxes
Wave has 14 reports, about half of which relate to Wave payroll (the company supplies full-service payroll to 14 states currently; the rest require self-filing of payroll taxes). You shouldn't expect much more given the scope of the site, but it does offer the standard financial reports that accountants like to run and analyze, like Balance Sheet and Cash Flow. Reports aren't very customizable, but you can export them as CSV and PDF files.
H&R Block owns Wave. If you want to leverage the company’s resources to prepare and file your income taxes, you can upload your accounting records directly and connect with a Block Advisor.
Is Wave Safe to Use?
Bank data connections with Wave are read-only and use 256-bit encryption. The company houses its servers under physical and electronic protection. Wave is also PCI Level-1 certified for handling credit card and bank account information. Multi-factor authentication is a requirement for bank connections through Plaid, too.
Mobile Apps
Wave’s mobile app (available for Android and iOS) is much more useful than before. It now handles far more than just scanning receipts. The dashboard looks good, and you can create and view customer and product records, estimates, and invoices. All your transactions appear here, and you can even add new ones. I didn’t run into any image or text degradation issues like I did the last time I tested the app, either.
Verdict: No Longer Free, But Still Worthwhile
We liked Wave a bit better when you could get all of its best features at no cost, but it remains an affordable, responsive, and well-designed accounting solution for very small businesses (including freelancers and contractors). Its multicurrency support, revamped mobile apps, and user permissions features are additional points in its favor. FreshBooks and QuickBooks Online are more expensive, of course, though their flexibility, ease of use, and feature sets make them our Editors' Choice winners, especially for larger small businesses.
It now charges a modest fee for features that used to be free, but Wave's approachable design and reworked mobile apps still make it a worthy choice for very small businesses.
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