There are few things in life that beat the thrill of running your own business. Not only is being your own boss empowering and liberating, but it also allows you to benefit directly from your hard work.
However, there is another side to being a business owner that’s slightly less glamorous but not any less important: accounting.
Failing to properly manage your business’ revenue and expenses can have catastrophic consequences. It can create cash flow problems – one of the main reasons small businesses fail – and it can even get you in trouble with the law.
If your small business is just a side gig, this isn’t so hard to do, but as you expand and grow, it can get quite difficult to keep track of everything on your homemade Excel spreadsheet.
Sure, spreadsheets can be great. But they can also be tricky to maneuver and understand.
Wave Accounting is a free service that makes it unbelievably easy to keep accurate business records and understand your cash flow situation. It’s a great option for small businesses because it:
- Organizes all of your business records in one place
- Keeps sensitive business data safe and secure on the cloud
- Uses an intuitive, easy-to-understand dashboard that makes it easy to understand your business’ financial situation.
All of this provides you with the peace of mind and freedom you need to focus on other aspects of your business.
If you need some help managing your business’ finances, then read on for our full review.
What is Wave Accounting?
Wave Accounting is an all-in-one accounting suite that helps you manage your business finances. You can use its core features for free, but there are additional paid services if you’re looking for enhanced functionality.
The Free Version of Wave Accounting
One of the biggest perks of Wave is that the basic version is free to use, and the free version offers you quite a bit.
Here’s what you can do for free:
You can integrate Wave Accounting with your PayPal, Shoeboxed, Etsy, or Zapier accounts, which allows you to easily and securely send invoices in any currency from one central location.
Invoicing with Wave Accounting allows you to make use of their professional templates, helping to make your business look more official.
You can also send quotes and estimates to potential clients, and if they agree to hire you, you can turn these estimates into invoices with the click of a button.
Furthermore, you can also set up automatic invoicing and payment reminders to ensure the cash keeps flowing.
Wave Accounting will take your invoice information and use it to help you keep track of your overall revenue. You’ll never need to worry about entering the wrong numbers or misplacing the decimal point.
Using the Wave Accounting receipts app (iOs and Android), you can scan your business receipts to keep track of expenses. Or, you can enter expenses manually. No matter which method you choose, you can categorize your expenditures to get a better picture of your overall expenses.
Wave Accounting will also help you keep track of taxes so that you know how much you owe when it comes time to make your quarterly estimated payments.
Because of Wave Accounting’s seamless integration, you can quickly and easily generate reports of your business’ profit/loss situation, sales tax balances, general ledgers, aged-receivable reports, and much more.
Understand Bank Balances
Wave Accounting integrates with over 10,000 different financial institutions. Connecting your bank account to Wave allows you to see in real time how your business activity affects your current cash situation.
The free version of Wave Accounting allows you to invite an unlimited number of collaborators to the account. This ensures everyone who needs access to this information can have it.
The Wave Accounting Dashboard
You can do all of this and more from the Wave Accounting dashboard, which looks like this:
Paid Versions of Wave Accounting
As you can see, the free version of Wave offers many useful features. But for those looking for a bit more, Wave Accounting has “pay-per-use,” monthly payroll plans, and Wave+, all of which unlock additional tools that make it easier to run your business:
This version of Wave Accounting is designed for those who would like help processing payments. In the free version, you can send invoices using Wave Accounting, but you need to use another payment service to actually get paid.
Wave Pay is similar to other payment systems, such as Stripe of PayPal, but the benefit of using Wave’s system is that you can integrate your payments with the rest of your finances, putting everything in one spot and making things easier to manage.
With Wave Pay, you can accept both credit card transactions as well as bank payments (ACH). Here’s a breakdown of the fees for these services:
- Credit card transactions: 9 percent per transaction plus $.30
- Bank payments (ACH): 1 percent per transaction with a $1 minimum fee
These fees are in line with the industry standard, but the main benefit of using this service is being able to invoice and accept payments all in one place.
A monthly subscription to Wave Payroll gives you access to their payroll services. Your employees will be able to enter their time into the Wave platform, and then Wave will automatically generate checks on the dates you indicate. It can also be set up for direct deposit.
Wave Payroll will also generate W-2 and 1099 tax forms when they’re needed, and employees will be able to access these documents, as well as their pay stubs, at any time.
For businesses operating in New York, Florida, California, Texas, Illinois, and Washington, Wave Payroll will automatically file your payroll taxes when they are due each year, eliminating the need for you to do this yourself.
Currently, it doesn’t offer this service in other states, but it plans to in the near future.
If this sounds like a service that might work for you, here’s how much it costs:
- New York, Florida, California, Texas, Illinois, and Washington: $35/month plus $4/active employee and $4/independent contractor.
- All other states: $20/month plus $4/active employee and $4/independent contractor
Wave+ gives you access to Wave’s consulting services.
There are two options: personalized bookkeeping and accounting coaching.
Personalized bookkeeping services start at $149/month, but you will need to call Wave for an exact estimate. Services include:
- Categorizing transactions
- Reconciling accounts
- Organizing income statements and balance sheets
- Collaborating with your tax accountant
- Catching up on previous months’ activity
- Delivering insights in a monthly review call
The other service offered through Wave+ is accounting coaching. This service gives you limited access to Wave’s qualified accounting professionals. You can get these services for a one-time fee of $249, which includes:
- 120 minutes of live accounting coaching plus 30 days of email access to your personal Wave consultant
- Lessons on how to do bookkeeping the right way
- Help setting up your online account
- Migration of your accounting information from another platform
- Reviews of your existing account and help in fixing it.
Who Should Use Wave?
Wave is perfect for small businesses focused on offering services.
For example, it’s an excellent option for freelancers and other independent contractors.
It can also be good for small businesses operating as sole proprietorships, meaning those in which there is no separation between the individual and the business.
However, Wave is not a great option for:
- Businesses with multiple products (Wave doesn’t do inventory or purchase orders)
- Corporations, such as S Corps and LLCs (Wave does not account for some of the rules and regulations these types of businesses must follow, and therefore won’t be much help.)
Best Features of Wave
Here is what we like most about Wave Accounting:
- It’s easy to use. You can set up in minutes and easily access all of your business’ relevant financial information.
- It’s free. The basic version of Wave offers you some excellent features without becoming an expense in itself.
- It integrates really well with other apps. For example, if you usually invoice with PayPal, you can keep doing so when using Wave, but now, you can include your business logo and other professional design elements. Furthermore, paid invoices will be automatically entered as revenue, which you can use to help better understand your business’ cash flow situation.
- It generates reports at the click of a button. If you need to get a quick summary of your expenses or a profit/loss statement, you can have this information in seconds.
- Paid features are useful and competitively-priced. Accepting payments through Wave requires you to pay transaction fees, but they are no different than what you will be required to pay with other services. However, going through Wave’s service allows you to keep track of everything in the same place.
- The Wave Receipts app makes it super easy to enter receipts and keep track of your expenses.
What Is Wave Missing?
Of course, no tool is perfect. It’s impossible for anyone to come up with a piece of software that can do everything for everyone.
However, there are a few things we wished Wave did have that it doesn’t, such as:
- An inventory tool. Right now, there is no way to keep track of inventory and process purchase orders, which can be a real pain for businesses selling physical products.
- An all-in-one app. Currently, Wave offers the “Invoice by Wave” app and the “Receipts by Wave” app, but right now, an app that puts everything into an easy-to-use, mobile format does not exist.
- Time-tracking. Employees need to enter time manually, which is fine. But to automate things further, it would be nice to see a feature that allows people to track their hours more easily.
How to Sign Up
If you’re interested in using Wave Accounting to help you run your small business, here’s how to sign up:
Go to Waveapps.com and click “Sign up for free.” You’ll be redirected to a page where you’ll need to make an account providing your email address and a password.
Enter the name of your business and describe its main activity by choosing an option from the drop-down menu.
Choose a starting point. This should be the main reason you’ve decided to use Wave. So, if you’re looking to send estimates or make better invoices, then choose “Professional invoicing.”
If you choose “Reliable payroll,” you’ll be offered the chance to do a free trial of Wave Payroll, which you will be charged for after the trial is complete.
Once you’ve chosen a starting point, choose the activity you want to start with. Wave will walk you through how to do it. If you chose “Professional invoicing,” here are your options:
If you choose “Better bookkeeping,” your choices will be:
Once you’ve done this, you’ll be given a quick walkthrough of your chosen activity, and then you will be free to navigate around the app.
You can begin integrating other services, such as PayPal and your bank account, right away, and that’s about it. It’s a very intuitive tool you’ll learn how to use in no time.
When you have questions, contact Wave Accounting support. You can do so by clicking the “Help” button on the bottom left of your screen.
This will direct you to the proper resource, whether it’s a FAQ tool, a blog post, or a live chat box.
Wave Accounting is a free, easy-to-use, and accurate tool that makes effortless managing your small business’ finances.
If you’re looking for a way to simplify your accounting operation, then consider giving Wave a try today.