Wave Accounting Review 2023: Pros, Cons, Alternatives

For micro businesses and self-employed entrepreneurs who just need the essentials, this free accounting software is a great option.
Hillary Crawford
Randa Kriss
By Randa Kriss and  Hillary Crawford 
Edited by Christine Aebischer

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Wave Accounting is an ideal choice for micro-businesses with less than 10 employees, contractors, freelancers and other service-based businesses on a budget. This financial management platform is user-friendly and approachable — especially for those with no prior accounting experience — yet fully functional. It allows you to manage bookkeeping, accounting and invoicing in one place through internal integrations.

Although Wave’s invoicing capabilities make it a particularly appealing option for service-based businesses, this small-business accounting software does have its limitations. It doesn’t have the option to upgrade to a higher-tier plan with additional features, making it ill-suited for larger and fast-growing businesses.

Pros

Cons

  • Free.

  • Unlimited invoicing with customizable templates and payment terms; dedicated invoicing mobile app.

  • Unlimited users with varying user permissions.

  • No third-party integrations or additional plans to increase functionality (e.g., time tracking, inventory management).

  • Must pay extra for phone support; live chat support only included with paid services (Wave Payments and Payroll).

  • No audit trails.

Wave Accounting at a glance

Key features

Strong invoicing feature competes with that of paid products; app lets users send invoices on the go; offers significantly fewer reports than competitors; no inventory tracking.

Ease of use

Includes tools that help automate the reconciliation process; auto-categorizes transactions for you, but you can’t set up your own bank rules; no global search function.

Scalability

Allows an unlimited number of users; ideal for very small service-based businesses, freelancers or contractors; not ideal for businesses with more than a handful of employees.

Ease of sharing with accountants

Easy accountant access, but no audit trail.

Integrations

Only integrates with in-house apps, like Wave Payments and Wave Payroll; does not integrate with card readers for in-person payments.

Customer support

Support for non-paying users is limited to the chatbot and self-service Help Center.

Cost

Wave Accounting is free.

Advanced features

Can manage multiple businesses for free under one account; lacks project tracking tools, industry-specific reports and transaction tracking tags.

How does Wave Accounting work?

Getting started

You can sign up for Wave quickly and easily online. After providing a few basic details about your business — name, type, currency you use, address — you’ll have instant access to your free account.

Connecting your accounts

Once logged in, your main dashboard will show your cash flow, profit and loss, invoices, bills and other financial insights. From the dashboard (or the Banking menu on the left-hand side), you’ll be able to connect your bank and credit card accounts to automatically download and categorize your transactions.

When you reconcile your books, you’ll navigate to the “Reconciliation” tab within the Accounting menu. If you need to manually edit, add or remove any transactions, you can do so on the Reconciliation or Transactions pages. Next, you can add sales tax (if necessary), create customer profiles and customize your invoice templates.

Pricing and features

Wave's free accounting software has no contract and no hidden charges.

Although accounting and invoicing are separated into two different product sections on the Wave website (shown similarly below), they don't require separate accounts. These solutions are integrated within your dashboard and you’ll access them both through your single Wave login.

Wave Accounting

Price: Free.

Features:

  • Unlimited income and expense tracking.

  • Customizable sales taxes.

  • Unlimited bank and credit card connections.

  • Exportable, basic accounting reports and financial statements.

  • Dashboard monitoring for cash balances and invoice statuses.

Wave Invoicing

Price: Free.

Features:

  • Unlimited invoicing.

  • Automatic payment reminders.

  • Ability to turn estimates into invoices once approved.

  • Ability to accept online credit card and bank payments within invoices using Wave Payments (fees apply).

  • Invoices and accounting sync automatically.

In addition to its free services, Wave has software that does come with fees, including Wave Payments and Wave Payroll.

Benefits of Wave accounting

Free

It’s hard to beat free accounting software, especially if you’re running a small business on a budget. With Wave, you receive a lot of features, like unlimited invoices and unlimited users, that are not always included with paid accounting software plans. It also complies with accounting standards and helps automate the reconciliation process.

Customizable invoicing

Wave’s invoicing is free and unlimited, with three customizable templates and a user-friendly interface, putting it on par with some of the top invoicing solutions for small businesses.

In addition, Wave allows you to add and manage customer profiles and send payment reminders, receipts and follow-up emails. It also offers a dedicated invoicing mobile app so that you can send invoices and track payments.

Drawbacks of Wave accounting

Not scalable

Wave’s free accounting software can be a great option if you run a very small service-based business or don’t need more advanced features that alternatives might offer. For small businesses any larger than that, however, Wave is extremely limited. Unlike competitors, Wave doesn’t offer multiple plans to increase the software’s functionality. It’s also missing an audit trail and third-party integrations.

For example, QuickBooks Online doesn’t have a free plan, but offers four paid plans, each with additional features, making it a great choice for scalability. With the higher-tier QuickBooks plans, you have access to time tracking, inventory management and employee expenses management, none of which are offered with Wave.

Limited customer service

Wave Accounting only offers self-serve customer support. One-on-one support is available for Accounting customers through Wave's paid Accounting Coach option. Accounting users that also subscribe to a paid Wave service have access to live chat Monday to Friday from 9 a.m. to 5 p.m. EST.

Alternatives to Wave

FreshBooks

Pricing: Starts at $15 per month (when billed monthly).

Pros: Like Wave, FreshBooks can be a good choice for micro businesses and solopreneurs. It includes invoicing, estimates and expense tracking with all plans. There's also a client self-service portal, unlimited time tracking and basic inventory tracking.

FreshBooks has an excellent mobile app that allows you snap photos of receipts, send invoices and track mileage. It offers both phone and email support, too.

Cons: FreshBooks’ lowest-tier plan lacks some basic accounting features, like double-entry accounting reports, accountant access and bank reconciliation. And the first two plan tiers limit the number of billable clients. None of FreshBooks’ plans include an audit trail that accountants can review. Moreover, FreshBooks only includes one user with all of its plans, except the Select plan which includes two; to add users, you’ll need to pay $10 per person per month.

FreshBooks Accounting

FreshBooks
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on FreshBooks' website

QuickBooks Online

Pricing: Starts at $30 per month.

Pros: QuickBooks Online is the industry standard for small-business accounting software and can be a particularly worthwhile option if you’re going to be working with a bookkeeper or accountant on a regular basis. QuickBooks Online offers four different plans to choose from and is well-known for its robust reporting, record-keeping and project tracking features.

Moreover, you can integrate QuickBooks with hundreds of third-party tools available in the app marketplace. There are also add-on Intuit services like QuickBooks Payroll or QuickBooks Time.

Quickbooks Online

QuickBooks
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on QuickBooks' website

Cons: Although QuickBooks Online is fairly user-friendly, it’s much easier to use if you have some basic accounting knowledge. You may find that this software has a bit of a learning curve.

Compared with free software like Wave, QuickBooks plans are expensive. The most basic plan, Simple Start, costs $30 per month, and the top-tier Advanced plan costs $200 per month, which is a sizable investment if you’re running a business on a tight budget.

Methodology

NerdWallet’s accounting software ratings favor products that are easy to use, have a robust feature set and can grow with your business. Ratings are based on weighted averages of scores in several categories, including scope of features and integrations, customer support and cost, among others. Learn more about how we rate small-business accounting software.

These ratings are meant to provide clarity in the decision-making process, but what’s best for your business will depend on its size, growth trajectory and which features you need most. Simplicity doesn't always translate into ease of use. Less scalable products are typically simpler, but diminished functionality can cause headaches down the road for growing businesses. We encourage you to research and compare multiple accounting software products before choosing one.

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