Wave Accounting for Small Businesses: What You Need to Know
Wave is a Canada-based accounting company that offers accounting software solutions for freelancers, individual contractors, and other small business owners. Founded in 2009, the company started offering free accounting tools to entrepreneurs. Since then, the wave accounting reviews began overflowing.
The goal is to help entrepreneurs streamline their financial activities and accounting processes so that they can devote their precious time to other essential things in the company.
Accounting by Wave was the very first accounting tool that the company produced. Its features included invoice issuing and tracking, bank data imports, account organization, and financial activity record-keeping. In the following years, Wave introduced a series of software to the market, Payroll by Wave, Invoicing by Wave, and Receipts by Wave, an offshoot of the accounting tool published prior.
Here, we’ll talk about Wave Accounting Software features, what makes it an excellent tool for small businesses, and the downsides of the tool.
Why is it Popular?
The first thing that should be pointed out with the accounting software and what you’ll commonly see on Wave accounting reviews is its price tag. The app is free, and you can create unlimited invoices and contacts. This makes it a perfect accounting tool for solopreneurs and entrepreneurs who generally handles a limited number of clients per month. However, the software would require you to pay when you add payroll, process payments, and professional bookkeeping services.
Secondly, Wave offers a simple way for business owners to track their financial activities, whether generating an invoice, receiving payments, or tracking payment processes. It also lets you generate simple financial reports like balance sheets, income statements, and cash flow.
Not only that, but it also has a receipt tracking feature that allows you to receive a separate receipt when you make purchases using your credit cards. This is especially handy for business owners who want to record each of the transactions they made.
The company made their interface so simple, so anyone using it doesn’t need to acquire advanced knowledge to use the software. With just a few clicks, you can have your customer’s invoices ready to be sent, get a detailed record of your financial statements and history of transactions.
Wave is a perfect tool for small to medium-sized companies that require simple and basic accounting tools for their business. It specifically caters to start-ups, freelancers, and independent contractors who don’t need an advanced accounting tool to manage their finances. In this light, if your company is larger and you handle a relatively large number of clients each month, you may have to opt for a more robust accounting tool.
One of Wave accounting’s main downsides is that the software is only available in certain states in the United States. The company is still working on expanding its reach to cater to more customers from other states in the future. As of now, the Wave software is available in these 14 states:
- New York
- North Carolina
If you’re not from any of these states, then you might want to consider using alternatives to Wave accounting, like Xero.
Wave accounting is also functional on mobile apps. However, the only fully functional features of the app in mobile phones are its invoicing and receipt-tracking app. If you have to use the accounting feature, you have to go to a desktop computer to complete your desired action.
What are the Software’s Features?
So, what does the Wave Accounting software offer? Here’s a list of its features:
- Unlimited, customizable invoicing
- Set-up recurring invoices
- Credit card processing
- Automatic credit card charging for returning customers
- Contact organization and management
- Double-entry accounting for easy financial reporting
- Expense tracking
- Bank account and credit card integration
- Unlimited receipt scanning on the mobile app
- Capture receipts offline
- Transfer receipts from email to Wave account
- Tax service and self-service payroll generation
- Run multiple businesses in one platform
Wave Accounting Pricing
While Wave Accounting is absolutely free for invoicing, expense tracking, receipt management, and financial reports, it does charge an extra fee for certain products.
For instance, the tool offers two payroll options: tax service payroll and self-service payroll. Tax service payroll means that Wave will handle your payroll, including the taxes associated with it for $35 per month plus an additional $6 per month for every employee.
They also offer payment processing, which allows the customers to pay for their dues through the app. The company charges 2.9% of the invoice’s total amount plus a $0.30 service charge for every transaction. The payment processing can take up to two days.
Accounting for your small business doesn’t have to be expensive. With Wave Accounting, you can track your expenses, create and customize invoices, generate financial reports, scan and save receipts, and more without wasting hundreds of dollars. It’s also easy to use, and you don’t have to worry about all the accounting jargon.
Although there is still a lot to improve for the app, it’s still a useful tool for small business owners looking for a cost-efficient way to keep track of their finances. They also offer professional bookkeeping, accounting, and tax consultations if you need them.