Wave Review (Formerly Wave Accounting)
- Easy to use
- Numerous features
- Attractive invoice templates
- Good support materials
- Help from expert accountants available
- Limited mobile apps
- Unsuited for large businesses
- Poor customer support
Have you heard of the free accounting software that is making waves in the accounting industry? In the five or so years that we’ve been following Wave, the software has grown from 1 million users to over 3.5 million users.
So what makes Wave so popular?
First off, you can’t beat the price tag. Wave is completely free, and unlike other free programs, there are no artificial limits on invoicing, contacts, items, or other features. The only thing you have to pay for is adding payroll, payment processing, or professional bookkeeping. The company has also been rolling out update after update to make Wave a robust software with tons of features geared specifically toward small business owners. Wave’s software was the first to offer an integrated lending feature, coming to the scene a whole year before QuickBooks Online’s lending platform. A brand new Wave design and Wave logo, along with more recent updates, such as automated expense tracking, cash-basis accounting, and a lightweight eCommerce feature, have made the software even better. An acquisition by H&R Block in 2020 also brings the potential for future updates and improvements.
That said, there are still quite a few areas where Wave could stand improvement. There’s no project management feature, limited time tracking, limited inventory, and poor mobile apps. Additionally, you can’t add multiple users, making it unscalable for larger businesses. But, despite these drawbacks, Wave is still the best free accounting software out there.
Read on to see if Wave is the right choice for your small business.
Table of Contents
Wave “has always been and always will be free,” a structure that the company plans to maintain following its acquisition by H&R Block. Unlike most free 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 — plus, there are no pesky ads. The company generates revenue from its credit card processing, payroll, and bookkeeping services and uses this revenue to keep the software completely free. You can cancel your account at any time.
Wave’s accounting software is free and includes:
- Unlimited invoicing
- Unlimited estimates
- Contact management
- Expense tracking
- Accounts payable
- Basic inventory
There are several additional Wave products that you can purchase for your business:
- Payroll: Wave offers two payroll options: tax service payroll or self-service payroll. Tax service payroll means Wave handles your payroll and payroll taxes for you. The service costs $35/month + $6/month per employee and $4/month per independent contractor. Tax service payroll is available in 14 states: Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin. It is also available in most of Canada. For the other 36 states, there’s self-service payroll, which costs $20/month + $6/month per employee and $4/month per independent contractor. With self-service payroll, Wave will still calculate your payroll for you; you’re just responsible for filing your taxes. Payroll by Wave supports 1099 contractors as well as employees.
- Worker’s Compensation: Wave has partnered with AP Intego to bring worker’s compensation insurance to users eligible for full-service payroll.
- Payments By Wave: Wave offers payment processing to allow you to accept payments directly from customers. Wave charges 2.9% + $0.30 per credit card transaction (including Amex and international cards) with a processing time of two days. For ACH payments, Wave charges 1% per transaction with a processing time of two to seven days.
- Wave Advisors: Wave Advisors (initially known as Wave Plus) includes expert help from, you guessed it, Wave advisors who can assist in accounting coaching, bookkeeping, or taxes. If you’re new to accounting or want to outsource your bookkeeping or tax filing, these can be great additions — honestly, I’m surprised more companies don’t offer these perks. Here’s a breakdown of what these services include and how much you can expect to pay:
|Wave Advisor Service||Price||Details|
|Monthly Accounting Coach:||$79/month||A personal Wave accounting coach to help advise and guide you on how to best handle your accounting with 30 minutes of live coaching a month, plus email support|
|One-Time Accounting Coach:||$249||A Wave accounting coach to help advise and guide you on how to best handle your accounting with 120 minutes of live coaching|
|Bookkeeping:||Starts at $129/month||A Wave expert handles your bookkeeping tasks for you, which can include categorizing transactions, reconciliation, insights, planning, and more|
|Tax Service:||Starts at $129/month||A Wave expert takes care of your year-round taxes, which can include filing federal and state tax returns, representing you with the IRS, quarterly reviews, insights, and planning|
Cloud-Based Or Locally-Installed
Wave is cloud-based, so no downloads or installation required.
Hardware & Software Requirements
As cloud-based software, Wave is available on nearly any device so long as you have an internet connection. Up-to-date versions of browsers are recommended but not required. The company also features two iOS apps — Invoice by Wave (iOS 11.0+) and Receipts by Wave (iOS 11.0+) — as well as two Android apps — Invoice by Wave (5.0+) and Receipts by Wave (5.0+).
Specific Size Of Business
Wave is ideal for small businesses. The software is designed specifically for the small business owner to use, no matter what kind of bookkeeping background they come from. The software supports multiple companies and offers personal accounting as well. A direct Etsy integration also makes Wave an ideal accounting software for Etsy sellers.
Wave does offer payroll, but the software isn’t scalable enough for larger businesses, as it doesn’t support multiple users. You can grant access to collaborators who have view-only access or view and edit access where they can “create and send invoices, manage transactions, and generate reports.” Wave is also available in multiple countries.
Wave uses both cash-basis and accrual accounting; Wave’s cash-basis accounting is limited to choosing to run reports as cash-basis or accrual.
Ease Of Use
Wave’s newly redesigned UI is well organized and easy to use. The only downside is that there’s no back button, but navigating the software is still pretty simple. Wave’s software takes very little time to set up and get used to — and it doesn’t require a background in accounting (especially considering that you can now get extra help with your accounting and bookkeeping from Wave advisors). The company also offers good customer support options, including an accounting guide, to help you learn to balance the books and use the software.
For a free software program, Wave offers an impressive, robust feature set that rivals even some paid accounting software programs. Here are some of the features you can find in Wave:
- Dashboard: Wave users have been asking for a dashboard for a long time, and Wave delivered. The dashboard features charts and graphs to give you quick insight into your business. They include graphs for Overdue Invoices & Bills, Cash Flow, Bank Accounts & Credit Cards, Profit & Loss, Payable & Owing, Net Income, and Expenses Breakdown. I particularly love the expenses breakdown feature, where you can see exactly where your money is going.
- Invoicing: There are only three Wave invoice templates, but they are attractive, modern, and customizable. Not only does Wave make it easy to send invoices, but it also makes it easy to take control over your whole invoicing cycle by prompting you to schedule reminders, record payments, and send receipts. Wave offers recurring invoices as well. This feature is particularly well developed and allows you to choose a time zone when setting the recurring schedule, so your customers can receive their invoices at the optimal time no matter where they are. Wave also has a nice invoice dashboard where you can see overdue invoices, outstanding invoices, the average number of days it takes your invoice to get paid, and your next payout. The only downside about Wave’s invoicing is that you have to add sales tax on each item, and you can’t add discounts (you have to calculate them manually using a new item line).
- Estimates: Wave makes it easy to create estimates and convert them into invoices. There is no way to duplicate estimates at this time.
- Client Portal: Wave offers a basic client portal but only for invoices. Your customers can view their invoices and pay them directly online. I’d love to see the company add a client portal for estimates where you can approve, decline, or comment on estimates.
- Contact Management: You can add contacts and vendors in Wave. You can record basic contact information, such as name, billing address, shipping address, phone number, etc.
- Expense Tracking: To track your expenses in Wave, you can connect to your bank account, import bank statements, or manually add expenses. Before, Wave’s expense tracking had hardly any automation, and users complained about duplicate transactions. Now, Wave has added bulk transaction categorization, transaction matching, and the ability to merge duplicate transactions. Note: Like almost all software using live bank feeds, Wave partners with Yodlee, which may violate some banks’ Terms and Conditions. Consult with your bank to see whether live bank feeds are a good choice for you.
- Bank Reconciliation: Wave also offers a recently improved bank reconciliation feature so that you can balance the books.
- Accounts Payable: Wave allows you to enter bills and record bill payments. The only drawback is that you can’t set recurring bills.
- Chart Of Accounts: Wave offers a customizable chart of accounts that is organized to make accounting as simple as possible for business owners. The software also provides fixed asset management.
- Inventory: Wave’s inventory feature is more of a glorified item list. You can add an item name, a description, and the sales price, and you can mark whether you buy or sell that item. If you mark buy, there’s nowhere to enter a purchase price, so when you go to create a bill, you have to adjust the price manually every time. There’s also no way to add an inventory stock level or set inventory reminders.
- Time Tracking (Payroll Only): If you use Payroll by Wave, the business owner can track and input employees’ time. There is no way for employees to have access to Wave and track their own time, which seems like a significant oversight.
- Reports: Wave offers 12 reports, including a brand new cash flow report. You can also create customer statements in the software. The reports are customizable, and Wave makes it easy to compare them to past periods. You can run cash-basis or accrual reports.
- Journal Entries: You can easily record journal transactions in Wave.
- Checkouts: One of Wave’s most exciting new additions is a light eCommerce tool called Checkouts. Instead of generating sales invoices, you can create a checkout link that you can then send to multiple customers at once. You can send that link via email, text, or add it to your WordPress, Wix, or Squarespace website. Wave remembers your past checkouts, so you can easily send them to customers when needed. This tool is ideal for businesses that do home shows, classes, regular service packages, or just want an easy way to bill multiple customers at once quickly. Contact Wave or sign up for a free account to see this feature in action.
- Sales Tax: With Wave, you can set an indefinite amount of sales tax rates in Wave. You can also set compound taxes and differentiate between recoverable and non-recoverable sales tax. You can add a default sales tax rate to items as well.
- Multi–Currency: Wave supports 160+ currencies, and exchange rates are updated daily.
- Importing/Exporting: This is where Wave is lacking. Wave offers only very basic importing capabilities. You can only import contacts via .csv or Google Contacts. Bank statements can only be imported via .ofs, .qbo, .qfx, .aso, and .csv. There’s no way to import items or services. You can export most data via .xls or .pdf and can print information as well.
- Lending: Wave partners with OnDeck to bring small businesses built-in lending. OnDeck offers flexible financing options and is one of our top loan choices. Read our full post on Lending By Wave: Everything Small Businesses Need To Know for more details.
Customer Service & Support
Wave offers a decent number of support resources to customers, but the response times are quite slow. Phone and chat support are only available for payroll or credit card processing customers. So if you have a question that can’t be answered in the Wave Community or the Help Center, your only option is email. Emails take a day for a response. If you have a pressing issue, don’t expect a quick answer. It’s worth mentioning that we have not tested the response time of the Accounting Coach service; the personalized email support there may be quicker. (If you’ve used Wave’s accounting or bookkeeping services, we’d love to hear from you in the comments below!)
On the plus side, Wave has a very comprehensive Help Center, so, hopefully, you won’t need to contact support much. The company also just added a brand new Wave Community. Here are all of the ways you can reach Wave:
- Support Form: You can contact Wave’s customer service team through the in-software support form.
- Phone & Chat: Phone and chat services are available for Payroll, Credit Card Processing, and Lending inquiries. Contact Wave for more details.
- Help Center: Wave provides a comprehensive Help Center with helpful how-to articles and guides. These articles and guides are well laid out with easy to follow steps and plenty of screenshots for us visual learners.
- Community: There is a brand new Wave Community where you can interact with other Wave users to find answers to questions, business tips, and inspiration from other people who have successfully used the product.
- Wave Plus: As we mentioned earlier, Wave now offers Wave Plus, an additional bookkeeping service that gives you more support.
- YouTube: Wave used to have a very developed YouTube channel with over 85 videos. Now, it only has 16 videos, and there aren’t many that demonstrate the software or teach you how to use features.
- Blog: Wave features a comprehensive blog with tons of articles and advice for small business owners as well as company announcements and updates.
- Social Media: Wave has accounts on Facebook, Twitter, and LinkedIn.
Negative Reviews & Complaints
Wave reviews are generally positive across the board. There are a few recurring issues that users have with the software; however, I was highly impressed to see how many of the complaints Wave addressed in its latest software update and redesign. The verdict is still out on how users feel about the redesign, but here’s an idea of issues users had in the past:
- Slow Servers & Downtime: Wave has always had an issue with slow servers and downtime. While there haven’t been any recent downtime reports, a few users still complain about the software’s loading speed.
- Poor Mobile Apps: Customers dislike that there are multiple Wave apps instead of one central full-featured Wave app. They also report various bugs in the apps. A new centralized app is in the works, but there’s no release date at this time.
- Limited Features: Users want more reports, better bank transaction categorization, payroll for independent contractors, a dashboard, and mileage tracking. While Wave hasn’t addressed all of these issues yet, it has added a new cash flow report, automatic transaction categorization, 1099 payroll support, and a dashboard.
- Difficult To Find A Bookkeeper: Several users complain that it’s hard to find an accountant familiar with Wave. Wave’s latest Wave Plus bookkeeping service aims to fix just that.
- Lack Of Integrations: Several users complain about a lack of third-party integrations.
- Expense Tracking Errors: Several users had an issue with duplicate transactions, and multiple users report having to often reconnect to their bank accounts.
Positive Reviews & Testimonials
For the most part, Wave receives high praise from its users, and ratings have gone up since our last review. The software gets 4.5/5 stars on Software Advice, 4.4/5 stars on G2Crowd, and 8.7/10 stars on Trust Radius. Also, Wave is BBB accredited and boasts an A+ on the BBB website. Here are some of the aspects users enjoy about Wave:
- Price: You can’t beat free, and Wave users agree.
- User-Friendly: Users like the fact that it is easy to learn, easy to navigate, and easy to understand, without all of the typical accounting jargon.
- Saves Time: Users also appreciate that Wave saves time, not just because it is easy to learn but also because it is cloud-based and has mobile apps.
- Personal Accounting: The ability to manage personal and business accounts in a single place is a favorite with business owners, particularly freelancers, independent contractors, and eCommerce shop owners.
- Good Feature Selection: One of Wave’s most loved aspects is its robust feature set. Users especially like the receipt scanner, expense tracking, and multiple company support.
- Good Invoicing: Users appreciate that Wave offers professional-looking invoices that are easy to create and keep track of.
Here is what a few users are saying:
I like Wave because it’s free. For most small businesses you really don’t need a ton of complicated features (depending on what you do), and for me this software fits the bill perfectly. It syncs my bank accounts, lets me label stuff so my accountant can sort through it at the end of the year, and did I mention it’s free?
Great for business beginners and advanced users. Compared to all the other cloud accounting choices it holds it’s own. Why make your business accounting difficult, isn’t running a business difficult enough?
Was VERY simple to integrate into my woodworking business. Since most if not all my transactions are electronic, categorizing my expenses has never been simpler. Thanks for eliminating my shoe box.
I’m in awe of this software. I’m a small start up and I’ve gone through at least 10 or 12 other platforms with a Goldilocks effect of “This layout is too unimpressive” or “This makes payment too laborious for clients”…until Wave. It’s just right.
Integrations & Add-Ons
Wave offers a limited number of integrations, although it does support a much-needed Zapier integration, which connects Wave with 1,000+ add-ons. The integrations Wave directly connects with are PayPal, Etsy, and Shoeboxed. You can also use the new Checkouts feature to create buttons on websites, such as Wix, Squarespace, and WordPress. API is available for developers.
Are you interested in accepting online payments from your customers? Read our comprehensive merchant account reviews to learn the pros and cons of popular providers and see which payment processing option is best for your business.
Wave currently uses 256-bit data encryption as well as a read-only version of banking information to protect privacy. The company uses Amazon Web Services to store its data. Data is regularly backed up, and servers are monitored 24/7. Contact Wave directly for more security details.
Wave has improved by leaps and bounds over the past few years. The company has addressed many customer complaints in its latest redesign, including adding 1099 payroll support, duplicate transaction management, expense transaction automation, and cash-basis accounting. The brand new checkouts feature is one-of-a-kind and is a great addition for business owners who need to charge multiple customers quickly.
However, there are a few features the software is still lacking. There’s no project management, limited time tracking, and no additional users, which rules the software out for a lot of businesses. Hopefully, with Wave’s update track record, it will add these features soon and also up the customer service response times.
Until then, the software is still a good solution for small business owners looking for a simple, easy to use accounting software that won’t break the bank. Wave’s customer support resources and new Wave Advisor services make it easy for people with limited accounting experience to learn the software. It’s also great for Etsy shop owners and other eCommerce businesses using Wix, Squarespace, or WordPress.
If Wave sounds like it might be a good fit for your business, give it a try! After all, it’s free.