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    • Wave Accounting Review: Free Small Business Accounting in 2023

    Managing accounting for a business is a critical task, and finding the right software is essential. One such software that stands out in the market is Wave Accounting. This review article will cover Wave Accounting’s pros and cons, pricing, and features to help you determine if it’s the right fit for your business.

    Key Takeaways:

    • Wave Accounting offers essential accounting features such as invoicing and income & expense tracking.
    • While the base version of Wave Accounting is free, it offers paid features including third-party payments, payroll management, and 1:1 consultations.
    • Wave Accounting provides a high level of security, ensuring your financial data is protected, much like online banking transactions.
    • However, it has limitations, including a lack of advanced features and limited customization options.

    What is Wave Accounting?

    Wave Accounting is a Toronto-based cloud-based accounting software designed specifically for small business owners. It provides the flexibility to manage your finances from any device with an internet connection, making it highly convenient.
    Wave Accounting focuses on core accounting tasks, including income and expense tracking, invoicing, and payment processing. Its simplicity is particularly appealing to beginners, as it simplifies the accounting process and makes it more manageable.

    Who Owns Wave Accounting?

    Wave Accounting was co-founded by Kirk Simpson and James Lochrie. In 2010, it started as a small venture, but over the years, it gained recognition and success. In 2019, H&R Block, one of the world’s largest tax preparation companies, acquired Wave Accounting. Kirk Simpson stepped down as CEO in 2022, and Zahir Khoja now leads Wave Financial as the CEO.

    Wave Accounting Features

    Wave Accounting offers several features to assist small business owners in managing their finances:
    1. Invoicing: Wave Accounting’s invoicing feature simplifies client payment processing, and its organized dashboard provides easy access to customer information. Additionally, the Wave mobile app allows you to send invoices on the go.
    2. Automatic Payments: Automatic payment processing is a standout feature, streamlining the payment collection process. Clients can make payments with a single click through the invoice link, ensuring you never lose track of payments.
    3. Income and Expenses Tracking: The software provides a comprehensive view of your financial health through its dashboard, making it easy to track profits and losses. This feature streamlines tax preparation as all your financial data is organized.
    4. Payroll: Wave Accounting offers payroll management, including direct deposits and tax management for Canadian provinces (excluding Quebec). Note that the payroll feature is a paid option.
    5. 1:1 Consultation : Users can opt for one-on-one consultations with Wave Accounting advisors for assistance with bookkeeping and accounting tasks, though this is also a paid feature.

    Wave Accounting Pricing and Plans

    Wave Accounting’s base software is free with no trial periods, subscriptions, or hidden fees. However, it offers paid options for additional features:

    Payments (Charged Per Use) :

    • Credit Cards: 2.9% + $0.60 transaction fee
    • AMEX Credit Cards: $3.4% + $0.60 transaction fee
    • Bank Payments 1% (Minimum $1) transaction fee

    Advisors (Paid Monthly) :

    • Bookkeeping Support: $149 per month
    • Accounting & Payroll Coaching : $379 per month
    To use the Payroll feature, there’s an additional monthly fee of $25, along with $6 for each active employee or independent contractor included in your payroll.

    Pros of Wave Accounting

    • Free : Wave Accounting’s base software is free, making it accessible to businesses of all sizes, particularly beneficial for startups and small businesses.
    • User-Friendly: Wave Accounting is designed with the assumption that many users have limited accounting experience. It provides built-in templates and visual graphs, making it easy to understand your financial status quickly.
    • Cloud-Based : All financial records are stored online, ensuring easy access and reducing the risk of data loss.

    Cons of Wave Accounting

    • Limited Features : Wave Accounting’s simplicity may be a limitation for some businesses as it lacks certain advanced features like time tracking and inventory management.
    • Little Customization : The software offers limited customization options compared to tools like Microsoft Excel.

    Is Wave Accounting Safe and Legitimate?

    Wave Accounting is a safe and legitimate platform with robust security measures, including up to 256-bit TLS encryption, similar to the security standards used in online banking. Additionally, the software undergoes third-party audits to verify its security practices annually, providing assurance that your data and transactions are secure.

    Alternative Accounting Software

    If Wave Accounting doesn’t meet your business’s needs, consider the following alternatives:
    1. Wave Accounting vs QuickBooks : QuickBooks offers more advanced accounting features, including billable hours tracking and mileage tracking, but it comes at a higher cost.
    2. Wave Accounting vs FreshBooks : FreshBooks is another excellent accounting software with features for tracking inventory, projects, billable hours, and expenses. It is also a paid service..

    Is Wave Accounting For You?

    Wave Accounting can be a suitable choice for small businesses, especially those looking for a free and user-friendly accounting solution. However, your specific business needs and priorities will determine if it’s the right fit. It’s recommended to test the software for a few days or a week to evaluate its functionality and decide if it aligns with your requirements, considering it’s free to use.

    FAQs

    Is Wave Accounting closing down?

    No, Wave Accounting is not closing down, but it ceased operations in the UK due to changes in open banking regulations in 2019.

    Is Wave the same as QuickBooks?

    No, Wave and QuickBooks are different accounting software platforms with varying features, ownership, and pricing.

    Is Wave Accounting HMRC compliant?

    Wave Accounting was once HMRC compliant but is no longer available for use in the UK.

    What percentage does Wave Accounting take?

    Wave Accounting is free to use, but it charges third-party payments per transaction, with transaction fees varying depending on the payment method used.
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