Xero VS Wave Accounting

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Accounting Method
Users and Permissions
Ease of Use
Product Features
Payment Processors
Customer Service
Negatives Reviews and Complaints
Positive Reviews and Testimonials
Final VerdictWinner
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You’ve made the decision, and are ready to look on the market for a new solution to your online accounting needs. Maybe you are looking to upgrade your current system, or maybe you are looking to try out a cloud based software for the first time! At any rate, you have narrowed your search down to two programs, Xero and Wave, and now would like to examine the two in more detail.

In the world of accounting programs Xero is a major front-runner, but as with most full-featured software, that functionality comes at a price. So how does Xero really stack up against a free program like Wave Accounting? Read on, and we’ll compare the two programs, exploring each one’s strengths and weaknesses. We will also examine some of the more important similarities and differences between the two to help you decide which program is right for your business.

Web-Hosted or Locally-Installed:

Both Wave and Xero use cloud-based services that do not require any installation or downloads. While Wave has limited iOS mobile use, Xero offers mobile apps for iPhone, iPad, and Android. It even works on devices that run Opera Mini.

Accounting Method:

Winner: Xero

Wave supports accrual accounting only. Xero supports both accrual accounting and cash basis accounting.

Users and Permissions:

Winner: Xero

Wave was created for independent contractors, sole proprietors, and companies with nine employees or less. Even though you can give unlimited users access to your account, every user will be able to view all the information in your entire account. Meanwhile, Xero was made for small businesses and can grant access to an unlimited number of users both inside and outside of your company. It has six default user roles, with extensive options for customizing each user’s level of access.


Winner: Wave

Wave is a free service. The reason it can be offered free of charge is because of the advertisements that populate the site. You should expect about 15% of your screen to be taken up by ads.

Xero, on the other hand, has a three tier pricing plan. Subscribers pay monthly, are able to cancel at any time, and are under no contracts. Subscriptions range from $9 a month to $70 a month. (For more information on pricing details, look here.) There is also a 25% discount for non-profits and a 15% discount on your total bill if your subscription includes multiple businesses.

Each plan also comes with a (no credit card required) 30-day trial. Some features are limited on the trial, though. For instance, you will not be able to convert your files from QuickBooks.

Ease of Use:

Winner: Xero

Xero is a dream. Self-proclaimed “Beautiful Accounting Software,” Xero’s UI is not only extremely easy to use but also exceedingly simple to navigate. There are help options that automatically pop up when opening new tabs and a search button that helps users find things easily. After setup, orange exclamation marks appear above important sections to help you to know what parts of the program are important and might require a closer look. Xero is not complicated to use even for someone with a limited accounting background and is not plagued with any major problems; the knowledge base is vast and easily searchable, so if you do run into questions, you can often get answers within seconds. However, there have been some reports of minor bugs that go unresolved for long periods of time and complaints about a lack of automated features.

Xero vs Wave

Wave’s UI is also very enjoyable to navigate and use. Upon starting the program, Wave walks you through some of the different features that it has to offer. This helps ensure your first use isn’t completely overwhelming, especially as the systems describes everything in a language comprehensible by those without a strong accounting background. It even offers “hot spots” or little icons that highlight parts of the program users should look at when first starting out. Though easy to use, this software does have a range of bugs (both major and minor) that impede usability, and can run slowly at times. However, if you run into any problems, Wave has an extensive knowledge base and, as an added bonus, some of the articles have actually been written with a sense of humor (which can be a nice reprieve from wading through technical jargon).

Xero vs Wave

Product Features:

Winner: Xero

Although Wave provides a surprisingly long list of features as far as free programs go, Xero blows it out of the water. Both programs offer features such as dashboards, estimates, invoicing, bank reconciliations, accounts payable, reporting, sales tax, and contacts, but Xero goes further with inventory accounting, job costing, budgeting tools, time tracking, and more.

One advantage Wave does have is that it includes the ability to track personal spending. Especially if you are an independent contractor or someone who doesn’t have a separate business bank account, this feature can come in handy. It provides an all-in-one accounting solution for both business and personal finances.

Accept Quotes OnlineNoYes – All Versions
Basic Stock ListYesYes – All Versions
Inventory AccountingNoYes – All Versions
BudgetingNoYes – All Versions
Purchase OrdersNoYes – All Versions
Job Costing/Tracking CategoriesNoYes – All Versions
Multi-CurrencyYesYes – Premium Only
Recurring InvoicesYesYes – All Versions
Time TrackingNoYes – Standard and Premium Only
1099sNoYes – All Versions
Manually Mark Invoices SentYesYes – All Versions
BillsYesYes – All Versions
Expense ReportsNoYes – All Versions

Integrations and Add-Ons:

Winner: Xero

Xero offers over 400 add-ons and integrations and automatic bank feeds through Yodlee, as well as a PayPal integration. From point of sale software to inventory managment software, Xero offers quite the selection of add-on capabilities. Check out the available integrations and add-on’s in Xero’s marketplace by clicking here. Below is a glimpse of what the Add-on store looks like:

Xero vs Wave

Wave only offers five add-ons and integrations. They are: Payments by WaveWave PayrollPayPalEtsy and Shoeboxed.

Payment Processing:

Winner: Xero

Once again, Xero takes the win in this category, boasting 19 payment processors. You can find more information about Xero’s payment processors here.

Wave only offers one payment processor (Payments by Wave) and its rates compare to those of PayPal and Stripe. Credit card processing fees vary from country to country, but in the United States and Canada the rates are 2.9% + $.30 per transaction. And unfortunately, Wave’s payment processing system is not without its faults. To be more specific, Wave Payments is poorly designed in the sense that some users sign up for it inadvertently and then find it next to impossible to disable. Read here for the whole story.

Xero vs Wave

Customer Service and Technical Support:

Winner: Xero

Xero takes the prize again, with customer service support that is available 24/7/365. While nontraditional (in the sense that the support model works strictly through emails and Xero chooses whether or not your query needs a phone call), Xero’s customer support is very good. Average wait times range from one to four hours. In terms of social media, Xero responds within 24 hours to questions submitted to their Facebook, LinkedIn, and Google+ pages. They also maintain an active Twitter feed.

Wave’s customer service is available Monday thru Friday, 9am to 5pm EST. Wait times reportedly average at about three days but can range anywhere from two to seven days. There have even been some complaints of wait times lasting up to three to four weeks, and although representatives are friendly, they are not always very helpful. Wave representatives do seem to be pretty good about responding to questions submitted through Facebook and Twitter (generally answering within 24 hours). They also post announcements and business tips on their LinkedIn.

Wave does offer faster support with three premium service packages. These services can be examined more in depth by clicking here. These services include the Plus option, which is $9 a month and offers chat support Monday through Friday 9am to 5 pm. The Advanced option that is $19 a month that offers the chat feature and direct phone access to Wave’s headquarters. There is also a Year End option that is $49 for three months. This subscription will turn into the Advanced package if you do not cancel it at the end of the three months.

Negative Reviews and Complaints:

Winner: Xero

Xero has mostly positive feedback, though there are a few negative reviews floating around the internet. For example, some customers complain about the mobile app’s limited functionality, saying that you cannot use the app to issue quotes. Although Xero has made improvements in this area, the mobile version still falls behind the desktop version. There have also been some reports of applications crashing or malfunctioning, and others who are frustrated with a lack of phone support and reportedly slow email responses. Some customers feel that as Xero has expanded, the quality of customer service has declined.

Personally, the aspect I found the most annoying was how aggressively Xero goes after potential clients. When you sign up for a free trial, you are required to provide an email address and a phone number, which Xero will use to bombard you with offers to extend your trial. You can ask a representative to take you off the call/email list, but not before they swoop in with an army of calls, emails, and texts. In my opinion, an email saying something along the lines of “Hi. I’m so and so from Xero. Let me know of you have any questions.” would have been more than sufficient.

Wave, on the other hand, has a history of unhappy customers who complain about major and minor bugs, a slow system, and poor customer service. The company even seems to ignore frequent customer feature requests, demonstrated by the continued lack of Android invoice applications and support for cash-basis accounting. Another complaint commonly made by Wave customers is that the auto-categorizations do not make sense, and–more grievously–Wave forces users to enter categorized transactions manually each time because it does not “learn” from previous transactions. Some also report that the automatic bank feeds have malfunctioned, failed to update on schedule, or missed transactions. Most recently, there have been complaints about the Android Receipts app not storing all scanned receipts and the iPhone Receipts app frequently crashing.

Positive Reviews and Testimonials:

Winner: Xero

Both programs have many loyal users and their fair share of positive feedback, but Xero takes the win for this section.

Both Wave and Xero customers say that the software saves them time by keeping their finances organized in an understandable way. Xero also offers other time saving features such as automatic bank feeds, bill tracking, invoicing and options for group invoices.

Many users call Xero “fun” and state that it takes the pain out of accounting. Customers also really appreciate the amount of features offered by Xero and the fact that the company is responsive to requests for new features. When it comes to customer support, almost every comment is positive, and representatives are known to be responsive and well-informed.

On the other hand, it’s commonly held that the best things in life are free, and one of Wave’s strongest points of praise is that it comes at no cost while still being more functional than some of the paid programs out there. Wave customers also really like the convenience of integrated, linked personal and business accounts. For many independent contractors and micro-businesses in the service industry, Wave truly provides everything that is needed.


Winner: Tie

Wave uses 256-bit SSL encryption and stores its information on servers located in facilities with both physical and electronic safeguards. It uses protocols certified by TrustE, subjects its security measures to third-party testing, and routinely backs up user data off-site.

Xero has impressive security, with a thus-far perfect record of preventing attacks. User data is SSL encrypted and stored in facilities that are physically and electronically protected from access by unauthorized personnel. Xero also implements routine third-party security audits as well as penetrative testing. The company provides full redundancy to keep the system running and ensure that customers don’t lose data even in the event of an equipment failure. Customer’s data is also backed up daily to a secondary data center in a separate location. For more information about Xero’s security measures, click here.

Final Verdict:

Winner: Xero

Though Wave is able to hold its own as an accounting program, Xero takes the win by far, and it’s easy to see why. Over the last several years, Xero has established itself as a solid program at the top of the accounting software market. The program can be used by someone with little accounting experience, but it’s not “watered down” to the point that someone with a solid bookkeeping background would feel frustrated. Though Xero does have a few problems, overall, it is a highly functioning, aesthetically pleasing, and easy to use accounting solution.

Even though Wave did not “win” this particular comparison, it really is a great option that is well worth trying out. One must remember that it is a free program after all and really quite impressive in that regard.

At the end of the day, the decision between Xero and Wave will depend on your needs and the particular requirements of your business. To see which option works best for you and your company, I would recommend giving both systems a run for their money. And if you’re finding yourself a little in over your head, let us know and we’ll lend a hand.

Elizabeth Cranston

Elizabeth Cranston

Writer and Reviewer of Point of Sale Software at Merchant Maverick
Elizabeth Cranston is a writer and native Oregonian who lives in the beautiful Pacific Northwest. She enjoys researching and getting to the bottom of questions relating to the Point of Sale industry.When not writing about and researching Point of Sale software, she can usually be found overindulging in Dutch Bro's coffee, making others laugh, or listening to music.
Elizabeth Cranston
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