The need for free solutions is constantly rising in the business world as it’s those initial expenses that can hinder a new company. On the accounting side we’re going to take a look at Wave Accounting which is a completely free cloud-based, mobile-friendly alternative to QuickBooks or other types of software that require costly initial purchases or subscriptions.
Free With No Strings Attached
Wave supports itself through an ad-based revenue model. This means, unlike “freemium” software, you don’t have to worry about only being able to create X number of invoices or Y number of expense sheets before you’re forced to upgrade and purchase the software. Wave does have small prices associated with using extra features—but these are hardly significant expenses (we’ll break this down later). Overall, it’s a service designed with a small business owner in mind who needs to cut expenses while still having access to a great accounting platform.
Who is Wave Designed For?
Wave Accounting is meant specifically for small businesses with between 1 and 9 employees. In our experience, it can still work for larger companies albeit the platform lacks the meatier features that come with more sophisticated accounting programs. Therefore, it’s an ideal solution for smaller operations. In addition, if a bigger company is on an extreme shoestring budget it would still get the job done nicely until a more advanced solution is purchased.
It’s not a substitute for having a CPA, either, as a trained accountant is typically advised for anything above a small operation.
Wave can be set up for free at www.waveapps.com. Further, there are very good resources available to help a new business owner learn how to use it. The website offers tutorials to help learn the platform and there is also a large collection of YouTube tutorials that are probably the most effective way to become skilled at the platform.
What Do We Get With Wave?
Now on to the good stuff—what does Wave actually do? In essence, it features most of the important elements of a platform like QuickBooks—although admittedly with less functionality.
Here are the general features:
• Dashboard: The dashboard comes with all the accounting software essentials: income and expenses, recent activity, bank accounts, credit cards, net income, an expense breakdown, etc.
• Etsy Integration: If you happen to be running an Etsy shop—Wave is the way to go as it’s designed to integrate with the Etsy platform.
• Invoicing: Wave provides three invoice templates that critics seem to agree are very high-quality.
• Estimates: Wave provides one estimate template but it gets the job done. You can export them as PDFs or send them through any common e-mail platform.
• Expense Tracking: Like any standard cloud-based accounting solution, Wave allows you to either manually introduce bank statements or you can connect your bank account directly—which is generally the preferred option. This allows automatic categorization of your accounts.
• Reports: Wave allows you to generate Profit and Loss, Account Transactions and Balance Sheet reports. For some, this may be limited—but for free software it’s a great benefit.
• Billing: You can consolidate your bills and take care of them all through the platform.
• Item Tracking: If your company deals with large inventory loads, it’s wiser to find a real inventory software. Otherwise, you can use Wave’s item tracking features to manage at least basic inventories albeit without tracking or reporting features.
• Sales Tax: An important advanced feature that allows indefinite sales taxes, including compound taxes and differentiations between recoverable and non-recoverable sales taxes.
• Imports / Exports: You can import and create invoices with most features with the exception of reports. This could be a problem for some users.
• Multi-Currency Usage: Not only can you choose multiple currencies but as a cloud-based platform it provides up-to-date exchange rates.
• Receipt Organization: Since Wave is mobile-friendly it allows quick receipt tracking. Just snap a photo of a receipt and send it into the platform. Or upload them manually.
While Wave offers a lot of great tools, some users complain about a few common issues. The most common are slow servers and downtime on the cloud. This could mean the platform won’t update at a crucial time. Most frequent users complain about this.
Further drawbacks compared to more standard paid software like QuickBooks includes a lack of different reports (Wave only has 3) and there’s also a general lack of features such as expanded categories, billing features, cash-basis accounting (it only supports accrual) or more than a couple of third-party integrations.
However, for a free tool these drawbacks are relatively minor given what a user is receiving.
What Does Wave Really Cost?
Basic Wave is always free. However, there are additional fees for enhanced features.
Wave’s specialty payroll platform costs $15 / month + $4 per employee. For a company with 10 or more employees the cost becomes $2 / month per employee. There are also additional small fees for advanced customer support and credit card processing features. Wave often advertises that its credit card processing is cheaper than PayPal ($0.30 + 2.9%).
There’s a reason Wave was featured as the Best Free Accounting Software For Businesses by Business News Daily: it’s continued to corner the market for cheap accounting platforms since 2010—and has created stiff competition against major paid platforms like Xero, QuickBooks, etc. We suggest to use Wave along with other free business tools to help you launch your business while reducing those pesky expenses. While there are a few nitpicks for people who may be used to more comprehensive software, for a free service it’s about as good as it gets.