Wave accounting is an ideal choice for small-business owners looking for free software. This financial management platform is user-friendly and approachable — especially for those with no prior accounting experience — yet fully functional. With Wave, you can manage bookkeeping, accounting and invoicing in one place.
Although Wave’s invoicing capabilities and pay-as-you-go payments service make it a particularly worthwhile option for service-based businesses, this small-business accounting software does have its limitations. Wave 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.
Free. The free Wave software includes accounting, invoicing and receipt scanning.
Maximum number of users
Maximum number of financial accounts
Ease of sharing with accountants
Good. You can invite your accountant to Wave via email and designate their user role. Wave recommends “editor” permissions for bookkeepers and accountants, which gives full access to purchases, accounting and reports, as well as limited access to sales.
Wave offers personalized bookkeeping, accounting, payroll and tax assistance through its Wave Advisors service.
Poor. Although Wave offers add-on products — e.g., Wave Payroll, Wave Money — that can be useful for businesses that want to bundle financial services, it does not provide more advanced accounting plan options outside of its free software.
Ease of use
Excellent. Wave is easy to use, even without prior accounting knowledge. The software has a clean design and intuitive user interface. Plus, the Wave Help Center offers a range of resources to help you get started and answer common questions you may have.
How does Wave accounting work?
You can sign up for Wave quickly and easily online, and after providing a few basic details about your business — name, type, currency you use, address — you’ll have instant access to your free account.
When logged into Wave apps, you’ll see your main dashboard that displays 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 in the “Transactions” tab.
Next, you can add sales tax (if necessary), create customer profiles, as well as customize your invoice templates. You can invite users and choose their access roles by clicking “Settings” in the lower left-hand corner of the dashboard.
Finally, if you want to use Wave to accept online payments from your customers, you’ll need to go to the “Payments” tab under the Sales menu to complete the Wave Payments application.
Wave will ask for basic details about you and your business, including your employer identification number and Social Security number. You’ll also need to provide bank account information, a valid government ID and answer a few questions to verify your identity. Once your application is submitted, Wave will set up your account and contact you if it needs additional information.
Wave is a free accounting software with no monthly or 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.
Additional products and services, such as Wave Payments and Wave Payroll, have associated fees.
*With full-service payroll, Wave automatically transfers tax payments and files federal and state taxes on your behalf. Full-service payroll is available in 14 states only: Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin.
In June 2020, Wave announced the launch of Wave Money, a free business bank account that integrates directly with its accounting software and payments product. As of July 2021, however, this account is still not publicly available. You can submit your email on Wave’s website to join the waitlist for account access.
Benefits of Wave accounting
It’s hard to beat free accounting software, especially if you’re running a small business on a budget. With Wave, you receive access to a double-entry accounting solution that includes unlimited bank and credit card connections, unlimited income and expense tracking, unlimited invoicing and unlimited partners, collaborators or accountants, features that are not always included with paid accounting software plans.
Moreover, unlike some other free software options, Wave doesn’t require that you buy expensive add-ons to be fully functional for accounting, bookkeeping or invoicing. It does, however, offer additional services if you’d like to expand your capabilities within the system.
Wave automatically syncs your invoicing and accounting, making it a particularly compelling software for businesses that want to manage their billing and bookkeeping in one place. Wave’s invoicing is also free and unlimited, with 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, as well as send payment reminders, receipts and follow-up emails. Wave also offers a dedicated invoicing mobile app so that you can send invoices, track payments and communicate with customers from any device.
Wave also gives you the option to apply for Wave Payments to accept payments from your customers online and offers automatic transaction reconciliation for these payments.
Easy to use
Wave accounting is simple and easy to use, with a user-friendly interface and intuitive design. Unlike some accounting software, you don’t need prior knowledge to get the most out of the system; you can easily navigate the platform and quickly learn as you go.
Additionally, Wave offers a thorough online Help Center with guides on setting up your account and completing common tasks, as well as video tutorials for accounting basics. You can also talk to other business owners about tips or questions you may have through the Community forum on Wave’s website.
Drawbacks of Wave accounting
Wave’s free accounting software can be a great option if you run a small business or don’t need more advanced features that alternatives might offer. For businesses focused on expansion, however, Wave is extremely limited. Unlike competitors, Wave doesn’t offer multiple plans to increase the software’s functionality.
For example, QuickBooks Online doesn’t have a free plan, but it’s an excellent choice for scalability as it offers four different plans, each of which includes additional features. With the higher-tier QuickBooks plans, you have access to time tracking, inventory management and job costing, none of which are offered with Wave.
Limited customer service
Wave’s customer support options are limited. Wave offers customer support mainly through email and replies from the support team can take around 10 business days.
Although Wave accounting customers can talk to a chatbot and receive automated answers, live customer support agents are available only for paid services (Wave Payroll or Wave Payments). Additionally, Wave doesn’t offer phone support for any of its products.
Alternatives to Wave
Pricing: Starts at $15 per month.
Pros: Like Wave, FreshBooks is a great choice for managing your invoicing and accounting in one place. FreshBooks includes unlimited invoicing, estimates and expenses with all plans, as well as a client self-service portal, unlimited time tracking and inventory tracking.
FreshBooks is well-known for its ease of use, particularly when it comes to its mobile app. It also offers both phone and online-based customer support.
Cons: FreshBooks’ lower-tier plans lack some basic accounting features and limit the number of billable clients you can add. Moreover, FreshBooks only includes one user with all of its plans; to add users, you’ll need to pay $10 per person per month.
Pricing: Starts at $25 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 inventory management features.
Moreover, you can integrate QuickBooks with hundreds of third-party tools available in the app marketplace, as well as add-on Intuit services like QuickBooks Payroll or QuickBooks Time.
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, as well as other competitors, QuickBooks plans can be expensive. The most basic plan, Simple Start, costs $25 a month, but the top-tier Advanced plan costs $150 a month, which is a sizable investment if you’re running a business on a tight budget.
QuickBooks Self-Employed (separate from QuickBooks Online) is designed for freelancers and independent contractors and costs $15 a month.