Wave has only 12 reports that cover the basics, such as balance sheets, profit and loss, and cash flow. Xero offers decent invoicing, although it only has a single template. Wave has multiple invoice automations, including recurring invoices, automated invoice reminders, and bulk invoicing. It is worth mentioning that these reports do cover the financial basics, but you won’t find advanced reporting here. Wave is also easy to use, making it a great choice for accounting beginners.

User Reviews: Tie

If you want a built-in payroll, you’re out of luck, although Xero integrates directly with Gusto. There’s also no built-in payment processing, although third-party options like Stripe, Square, and Payroll are supported. You also won’t find live bookkeeping services with Xero like you would with other accounting software options like Wave or QuickBooks Online. As far as accounting features go, few software options can compare to Xero.

1. For no cost, Wave Accounting Starter lets its users send an unlimited number of invoices, accept online payments, track income, sync bank accounts and manage more than one business.
2. Bonsai offers an unprecedented level of automatization that makes mundane tasks a breeze.
3. One drawback of Wave’s invoicing is that discounts and sales tax must be added manually.
4. If you’re a freelancer or solopreneur and don’t have complex financial needs, this might work best for you.

Featured accounting solutions

Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin are tax service states.

We don’t just scratch the surface; we immerse ourselves in every platform we review by exploring the features down to the finest nuances. Wave’s reporting features are also easy to use but lack depth when it comes to sales tax, inventory, and employee data. This could work well for freelancers, solopreneurs, and businesses with only a couple of employees. Larger businesses — even startups — will not find Wave’s offering here to meet their needs. If you run an e-commerce or physical products business, you shouldn’t use Wave.

The software is easy to use and boasts standard features such as invoicing, contact management, and personal and business expense tracking. Eric is an accounting and bookkeeping expert for Fit Small Business. He has a CPA license in the Philippines and variance analysis definition a BS in Accountancy graduate at Silliman University.

This more advanced software does come at a price, though — it is more expensive than Wave and also has a learning curve that may take some time to master. Xero has a project management feature that businesses can use to create projects, track expenses and time, and send invoices. The only caveat is that this feature is only available on the most expensive plan. Xero satisfies almost all of the A/P features we’re looking for in accounting software. It can record recurring bills, but users have to record the payment of the bill manually. Typically, other accounting software programs record recurring expenses directly to the enrolled bank or credit card.

Wave plans

It also allows you to keep a detailed overview of sales tax on all income and expense items. While this cannot substitute the role of an accountant, this feature is extremely helpful for staying on top of your due sales taxes. Xero has a fantastic range of integrations in their App Marketplace. These include apps for inventory and point of sale such as DEAR Inventory and Vend, document signing apps like Proposify, and reporting tools such as Syft and Fathom.

While the pricing is not the only decisive factor when choosing an between Wave vs Xero, the fact that Wave products are free is just great. Wave has developed a different model for making revenue instead of the classical monthly fees. It charges its customers for payroll services and accepting online payments.

For information on credit card rates, visit Pricing for details. Setting Xero up for your business is easy because it follows a step-by-step process. There’s enough white space on the web page in case you’re multitasking on one computer screen.