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Wave Review: Best Free Accounting Software for Businesses

Credit: Wave

Our 2017 research and analysis of accounting software leads us to again recommend Wave Accounting as the best free accounting software for small businesses. We chose Wave from dozens of accounting software options. To understand how we chose Wave, you can find our methodology and a list of accounting software vendors on our best picks page.

Although Wave Accounting is our top pick, keep in mind that it is best for businesses that are just starting out or plan to remain small. Specifically, it's good for the self-employed — such as entrepreneurs, freelancers and consultants — and very small businesses made of up fewer than 10 employees.

But if your business is growing or has plans of expanding, you could quickly outgrow Wave. Instead, a paid option like Zoho Books, our top pick for the best accounting software for microbusinesses, may be a better option. We compare Zoho Books and our other top picks below, and you can find out more by checking out our Zoho Books Review or our roundup of the best paid accounting software.

It's very easy to use Wave Accounting, and it's even easier to get started. Create an account in seconds by entering your email address and desired password (you can also register using your Google or Yahoo account). After signing up, you can customize your account by filling out your company name and type of business, which Wave uses to automatically create a dashboard that best suits your needs. The service also lets you add contact information, such as your address and phone number, so that this information will automatically appear on invoices, payments and other transactions.

When you log in, you'll be greeted with a simple dashboard, which we found very easy to navigate. It uses a sidebar menu divided into categories like Transactions, Invoices, Bills, Receipts and Reports, so you can quickly find core functions without difficulty. With Wave's user-friendly interface, we found our way easily and were able to create invoices, track finances and perform other accounting tasks in no time.

You can find out more information and experience Wave yourself by signing up for a free account or joining one of the company's free webinars for new customers.

Editor's Note: Looking for information on accounting software for your business? Use the questionnaire below, and our vendor partners will contact you to provide you with the information and quotes you need:

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Business owners we spoke to said that some of the main things they look for in accounting software are features that will save them time and take the stress out of managing finances. We've found that Wave's automated features fit the bill.

Some time-saving features we liked are automatic billing and invoicing. In addition to setting up recurring bills and invoices, you can also set up reminders to help you keep track of paid and unpaid items.

Wave also automatically syncs data, so you don't have to manually input transactions yourself. For instance, the service securely connects with your bank, credit card, PayPal and 10,000 other financial institutions to automatically download and import expenses, deposits and other financial data in real time. Your data is also automatically backed up, so you don't have to worry about losing your information or redoing everything in the event of an outage or cyberattack.

And if you're in a hurry — or you just want to see your business's financial status without going through all the numbers and reports — the dashboard features snapshots of all the critical information you need right when you log in. For instance, you'll find at-a-glance views of your income, expenses, bank and credit card accounts, payables, receivables, recent activity, and more, all in one easily accessible page.

Another feature we liked is the software's ability to easily and quickly create accurate financial reports, such as balance sheets, sales reports, tax documents and more using pre-made templates. That way, you don't have to waste time starting from scratch, especially if you know nothing about financial reporting.

In addition to providing free accounting tools, Wave can also help you save money on business services. The company has partnered with many providers that offer all types of products and services to help you run your small business. If you choose the free program, you can take advantage of discounts and other special perks offered by Wave's partners.

Although Wave is an excellent accounting software for small businesses, it offers only core accounting functions, so it isn't for everyone. And because it's a free software, it comes with several limitations that may make a paid software a better option for your business.

Here are three main shortcomings that we found with Wave Accounting:

  • Customer service. One key feature that's not available on the Wave Accounting software is customer support — at least not for free. Although the company has an FAQ page, community forums, a knowledge base, webinars, user guides and other sources of information, sometimes what you really need is to speak with a live person. Whereas paid accounting software options come with free live customer support, Wave requires you to purchase Premium Services, which start at $9 per month. Paid support packages include live phone and chat support and a direct line to Wave headquarters.
  • Payroll. Payroll services are not included either. Most paid accounting software programs come with payroll services (either as a built-in feature or third-party integration), but you'll need to pay for Wave Payroll to use Wave Accounting to pay employees. Wave Payroll costs $15 per month, plus $4 per employee per month. Besides the additional costs, this also means you're forced to use Wave's own payroll tools, which limits your options and may make payroll harder if you prefer to use your own payroll solution.
  • Advertisements. Wave is free because it uses advertisements. In addition to posting ads while you're using the software itself, Wave will also include its branding on communications sent to customers, such as invoices and emails. There is currently no way to get rid of advertisements, so if this is a major deal breaker, a paid accounting software is for you.

To give you a better idea of whether a paid accounting software is better for your business, here's how Wave compares to the rest of our top picks for the best accounting software:

Zoho Books. Our pick for the best accounting software for microbusinesses, Zoho Books is a great alternative to Wave for really small businesses with fewer than 10 employees. Zoho costs $24 per month, but may be worth the investment because it offers additional features to help businesses make the most out of accounting software. These include:

  • Better expense tracking
  • Powerful inventory management
  • Automated billable hours using a built-in time-tracking tool
  • Advanced reporting
  • API and third-party integrations (such as Google Apps, Box, Dropbox, OneDrive, Google Drive and more)

Zoho Books also comes with a wider range of payment gateways and credit card processors, including PayPal, Stripe and Authorize.net online payments; the Square Register point-of-sale system; and Forte ACH subscription payments — so you can get paid faster. [Learn more: Zoho Books Review]

QuickBooks Online. Our pick for the best overall accounting software for small business, Intuit's QuickBooks Online may be a better choice for small businesses that eventually plan to expand. Whereas Wave is best for really small businesses that only need basic accounting features, QuickBooks Online comes with a bevy of advanced capabilities, so the software grows as your business does. It would also be easier to use the same accounting software from the start than to import all your data from Wave once you decide your business has outgrown its capabilities.

Additionally, QuickBooks is a well-known name and software, both for accounting and taxes. This means that accountants everywhere are familiar with and know how to use QuickBooks, making their jobs easier if you decide to hire or enlist the help of an accountant, especially during tax time. QuickBooks starts at $9.99 per month.  [Learn more: QuickBooks Online Review]

FreshBooks. One of the biggest drawbacks to using Wave Accounting is that it does not have a native mobile app. This may be a deal breaker for business owners who need to be able to access their accounting on the go, wherever they are. Although you can access Wave Accounting on your smartphone or tablet using a browser, it still has a long way to go in terms of mobile optimization. On the other hand, FreshBooks, our pick for the best accounting mobile app for small business, offers a robust and easy-to-use accounting mobile app. FreshBooks' comprehensive accounting mobile app comes with all the accounting features you need, so you can do your accounting anytime, anywhere using your iOS or Android device. [Learn more: FreshBooks Review]

Ready to choose an accounting software? Here's a breakdown of our complete coverage:

Editor's Note: Looking for information on accounting software for your business? Use the questionnaire below, and our vendor partners will contact you to provide you with the information and quotes you need:

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Sara Angeles

Sara is a tech writer with a background in business and marketing. After graduating from UC Irvine, she worked as a copywriter and blogger for nonprofit organizations, tech labs and lifestyle companies. She started freelancing in 2009 and joined Business News Daily in 2013. Follow Sara Angeles on Twitter @sara_angeles.