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A Review of Wave Accounting Software

August 12, 2021

Did you know Wave Accounting Software is a free alternative to more expensive accounting software like QuickBooks and Sage? Despite its lack of capabilities, Wave’s boundless expenditure tracking and free invoicing make it a perfect choice for many freelancers. 

Most things in life, including Wave Accounting and Wave’s other free programs such as Wave Invoicing and Payments by Wave, have some limits. In general, its free accounting and bookkeeping software provide freelancers and solopreneurs with accurate, uncomplicated accounting support for the wonderful price of zero dollars.

When you work for yourself, you don’t need to spend hundreds of dollars a month on pricey accounting software. Wave accounting software could be a good fit. It crunches numbers and handles payments swiftly.

In addition to freelancers and independent contractors, Wave might also be utilized by small businesses with employees. Payments for payroll or customer payments are not included. Some of its accounting software is updated with new features, but the corporation is continually making subtle internal tweaks that could improve your day-to-day accounting operations. Customer statements and cash basis reporting are among the new features Wave has implemented since our last study. Earlier this year, H&R Block bought the Wave software company.

What are the other costs to use Wave?

Whereas other firms charge for their services, Wave’s primary accounting operations are free.  Payment processing charges per transaction are 2.9 percent + 30 cents (3.4 percent plus 30 cents per transaction for American Express). Bank payments are subject to a 1 percent fee, with a $1 minimum. As a base service, Wave Payroll costs $35 per month, plus $6 per employee or contract. For freelancers and others who cherish every dollar, Wave’s free status is a big plus.

For small businesses, Wave’s lack of a monthly fee may not be a problem. A four-tiered price structure is available for QuickBooks Online users. If you want to start small, you can do so, and then upgrade to a full-featured version when you need it. QuickBooks Simple Start costs $25 a month, while QuickBooks Advanced costs $150 a month, according to the company’s website. QuickBooks Plus ($70 a month) is the most popular product in the line. They all offer 30-day free trials and 50 percent off the first three months of service.

Great Setup Tools

While registering for Wave, you’ll be taken through Wave’s onboarding process. What is the first step in the setup process? You submit your name, company name, and industry. In the beginning, I chose accounting. Following this, the wizard asks you some questions about your work efforts. Using drop-down choices, you enter your responses before moving on to options such as connecting your bank or controlling your transactions and setting up sales tax, among others. A step that requires further preparation will be directed to this page. Click the Launchpad button to return to the original setup options if you’ve completed all the essential steps in one segment.

About this step, there’s conflicting feelings. If you click on it, you will be sent to your Chart of Accounts. Depending on which categories you create, you can add, amend, or archive the accounts you create. Bank and credit card accounts are a given.    

In addition to utilizing the website’s toolbar and Settings menu to set up Wave, you’re less likely to make a mistake by using the dedicated setup procedure. Around the fact that the settings menu is always available; you can add and change information as needed and read through Wave’s options before you start, especially if you haven’t completed the entire setup procedure.

The fact that Wave is built on data sharing makes it essential that you link to your financial account. You can enter transactions manually, but it’s nearly impossible to run a business this way because you won’t know whether deposits and withdrawals have cleared until your monthly statement comes. Transactions can be downloaded for both corporate and personal use. Use the categories Personal Expenses or Withdrawal and Deposits from Personal to categorize these transactions for bookkeeping purposes. When you log in, the site updates your information every time you log in.

Smooth operation

Simple to use is a claim made by all online accounting services. Wave lives up to its billing and delivers on its promises. In many ways, it’s even easier to use than FreshBooks. While Wave adheres to the concepts of double-entry accounting, it does the grunt labour behind the scenes. As such, QuickBooks Online has the same limitations as QuickBooks Desktop. Although it has a wide range of features, non-accountants may quickly learn how to use it and keep track of their accounts, despite its comprehensive capabilities.

Wave pros and cons

A week-long Starz trial on Amazon Prime is not Wave—you won’t be hit with an unexpected credit card charge a month later because you forgot to cancel. When you sign up with Wave, you don’t need to supply any credit card information; just your email address and a password.

Aside from freelancers and solopreneurs, Wave can also be beneficial to other small business owners. For starters, the company’s payroll plans are affordable: It costs $20 per month to subscribe to Wave’s self-service plan (see below). As a result, if you’re looking to package accounting and payroll, Wave’s full-service payroll plan starts at $35 per month.

There are 14 states in which Wave’s full-service payroll is not available at this time. All 50 states are covered by most other major payroll firms, like Gusto and QuickBooks Online, so if you need payroll tax service, you’ll want to seek elsewhere.

If you’re self-employed, you won’t have to worry about paying your employees. Both freelancers and small-business owners with employees will find that Wave’s only mobile apps are its invoicing and receipt apps, which is a downside for both. It has garnered positive reviews on both the Apple App Store and Google Play (which is pretty rare in the world of small-business accounting apps). You’re out of luck, however, if you were hoping to use Wave to do accounting on the go.

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