Wave accounting software is a web-based integrated solution designed for freelancers, consultants and newcomers to small business.
If you’re looking for a business accounting software for your small business, but aren’t ready to shell out money every month for a solution, Wave’s free accounting solution could be right for you. With Wave, there are no trials, no limitations, and no hidden fees, although there are a couple of paid upgrades.
A Toronto based company, Wave features accounting software, invoicing, billing, payment tracking, payroll management, finance management, and receipt scanning.
Wave accounting software makes sense if you are pinching all of your pennies and are willing to put in the hours to do your bookkeeping yourself. But, small business accounting is a deceptively big job, so beware!
Unlike most free accounting software plans, Wave doesn’t limit you to a certain number of invoices, customers, or transactions, making it one of the best free options out there. Unfortunately, there’s no project management feature, limited time tracking, limited inventory, and you can’t add multiple users.
Wave Accounting Features
Software and Apps
Wave is cloud-based and available on nearly any device as long as you have an internet connection. It’s recommended that you use the most up-to-date version of your favourite browser.
The company also features two iOS apps, Invoice by Wave and Receipts by Wave . Both apps require iOS 11.0 or later and are compatible with iPhone, iPad and iPod touch. The Android app equivalents are Invoice by Wave (4.1+) and Receipts by Wave (4.1+).
With Wave, you can quickly send estimates and turn them into invoices (in any currency) upon approval and you can personalize your invoices with a choice of three templates. You’ll be encouraged to “get paid faster” by upgrading to Payments by Wave, its own credit card processing service. Features on the Invoices by Wave app include:
- Ability to create customized invoices, with your business logo
- Receive notifications when you’ve been paid
- Check invoice status (sent, viewed, overdue, paid)
- Record payments
- Send invoice reminders and payment receipts
It’s easy to create unlimited estimates and convert them into invoices, but unfortunately, there is no way to duplicate estimates yet.
The free iOS and Android apps allow unlimited receipt scanning with the ability to capture receipts even when you’re offline. Features on the Receipts by Wave app include:
- Syncs with Wave’s accounting software so business expenses are updated automatically
- Digital expense tracking with a receipt scanner that can scan up to 10 receipts at once, even offline
- Add notes to your receipts so you’ll have detailed records at tax time
- Search function, so you can find past receipts quickly
- Optical Character Recognition (OCR) imports information from your receipts into your Wave account
- Receipts are then automatically recorded as accounting transactions
The dashboard features charts and graphs to give you quick insight into your business.
They include graphs for Overdue Invoices & Bills, Bank Accounts & Credit Cards, Profit & Loss, Payable & Owing, Net Income, and Expenses and now the Cash Flow.
Wave is an accrual accounting system, meaning that it recognizes transactions when an invoice is created and not when cash is exchanged, however, the Cash Flow graph functions on a cash basis, which allows you to see the actual payments moving in and out of your business.
Things You Could Do
This section is intended to save you the effort of having to navigate between pages and instead allows you to add a customer, vendor, to customize your invoices, or to add a user without having to click through a number of menus first.
With Wave, you can easily add contacts and vendors by recording their basic contact information, such as name, billing address, shipping address, and phone number.
To track your expenses, you can connect to your bank account, import bank statements, or manually add expenses. Wave has really updated this section, because “before” expense tracking had hardly any automation, and there were complaints about duplicate transactions. The company seems to listen to user feedback because now Wave has added bulk transaction categorization, transactions matching, and the ability to merge duplicate transactions.
Wave’s inventory feature is very basic. You can add an item name, a description, and the sales price, and whether you buy or sell that item. If you mark buy, there’s nowhere to enter a purchase price, so when you create a bill, you will have to adjust the price manually every time. There’s no way to add an inventory stock level or set inventory reminders.
This light e-commerce tool allows you to generate a checkout link that you can then send to multiple customers at once. You can send that link by email, text, or add them to your WordPress, Wix, or Squarespace website. Wave will remember your past checkouts, so you can send them to customers when needed. This tool is perfect for businesses that do home shows or classes. Some ways people use Checkouts include:
- Charging a fee for an initial consultation
- Selling limited edition products
- Collecting entry fees for event registration
- Selling gift cards for your services at various price tiers ($25, $50 etc.)
- Accepting donations for a cause
- Charging deposits from multiple customers using one checkout (if you have a common deposit amount you usually collect)
Wave has an official add-on for Google Sheets, Wave Connect, to upload customers, products, invoices, bank transactions and bulk journal entries. You can also download customer, product and invoice data, and easily create multi-period balance sheets, income statements, and cash flow reports.
You can grant access to a trusted person (an accountant, bookkeeper, tax preparer) by inviting them to be a collaborator. This collaborator can have view and edit access where they can “create and send invoices, manage transactions, and generate reports.” If your business grows to where you need multiple users, you can export the data into another accounting app, including Upside’s favourite accounting software, QuickBooks Online.
The tax service payroll costs $20 monthly base fee, plus $4 per active employee and $4 per independent contractor paid and is available in all provinces and territories, except Quebec. You can pay independent contractors and employees by direct deposit and generate T4 and T4-A forms for tax season. Wave will automatically send your tax remittances and all the associated paperwork to the Canada Revenue Agency (CRA).
Payments by Wave
Customers can pay by any major credit card right from your invoice and you will be paid out in 2 business days. The costs and fees are very straightforward, as all transactions are subject to the same flat fee. Credit card processing is pay-per-use at 2.9% plus 30 cents per transaction. An electronic funds transfer (EFT) costs 1% per transaction with a $1 minimum fee. After deduction of processing fees, payments will be automatically transferred to your bank account in 2 business days for credit cards and 2-7 business days for bank payments. You can process Visa, MasterCard, AMEX, and Discover all at the same flat rate.
Other than the online Help Center, support is only available by email for all software questions including invoicing, accounting and receipt scanning. Live chat support is available only for the paid financial service.
When it comes to customer service and support options, QuickBooks is the clear winner for accounting solutions, as it provides you with a variety of ways to get help when you need it. Whereas, as mentioned above, Wave only offers one option—email support for all software including invoicing, accounting and receipt scanning. You can lose a lot of time troubleshooting and hoping for a quick email response from the company.
So, can you handle Wave accounting software and DIY?
It depends on your dedication to learning the ins and outs of the software and whether you want to spend your time learning about bookkeeping and accounting.
At UpSide, we encourage all business owners —however small— to hire a dedicated bookkeeper to take care of your monthly financial tasks. We’ve seen too many creative entrepreneurs fall behind; lose receipts and important invoices. If this happens, it means that you won’t have the information you need to build balance sheets at important times, like tax season. And coming across unbalanced books during tax time is a nightmare that could really hurt your business. Need more reasons? Read our articles 5 Ways Bookkeeping Eliminates Stress and Why Creative Businesses Should Hire a Bookkeeper.
We suggest you work on what you’re passionate about and hire a pro to categorize transactions, reconcile accounts, organize income statements and balance sheets, and collaborate with your tax accountant. Breathe easy and forget the DIY bookkeeping with Wave accounting…unless you’re sure you want to make things harder for yourself.