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Wave Financial

Best Free Accounting Software

A Business News Daily Review

Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.

Wave Financial stands out as phenomenal free accounting software. The company includes quality features in its free package, and it's an ideal solution for freelancers or very small businesses.

In our search for the best free small business accounting software, we looked for an easy-to-use application that has a solid suite of features, provides customer support and, of course, is free to use, with no mandatory costs for the user.

We wanted it to be a web-based solution that has timesaving features like automatic bank feeds, recurring invoicing, and a mobile app that busy small business owners can use to accomplish accounting tasks on the go. Finally, we looked for a solution that gives users the option to accept invoice payments online, even though we recognized that there would be a cost for this last feature.

After much research and analysis of accounting software, we recommend Wave Financial as the best free accounting software for small businesses in 2019.

Yes, Wave Financial's accounting software really is free, as advertised. It includes a good mix of features and is well suited for service-based businesses that are just starting out or plan to remain small. Specifically, it's a good fit for the self-employed – entrepreneurs, freelancers and consultants – and very small businesses (10 or fewer employees) that have limited or no inventory.

A free accounting service can be a great asset for small businesses just starting out. Wave gives you the necessary accounting basics without charging you a monthly fee.

In the past, you had to pay extra to receive prioritized customer service, but that program has been eliminated, and Wave now provides all customer service through email for free. As with other accounting software, ancillary services such as credit card processing and payroll cost extra if you add them.

Here are more details on Wave pricing:

  • Wave accounting software, invoicing and receipt scanning are free. There's no limit to the number of users (or guest collaborators) you can add to your account, transactions you can create, invoices you can send or receipts you can scan. Wave's mobile apps are included with your account and are also free to use.
  • Online credit card processing for invoices costs 2.9% plus 30 cents per transaction. If you want to accept invoice payments online, you need to use Wave's credit card processing service. It charges a flat rate for the transaction, and there are no account fees and no contracts. This rate is the same as FreshBooks' and comparable to the 2.9%-3.4% plus 25 cents that QuickBooks charges for processing. However, other accounting software providers give you the option to use other processors, which may be an important consideration if you're already working with a credit card processor.
  • Bank payment processing costs 1% per transaction, with a minimum fee of $1. You can accept ACH payments, which allows your customers to pay their invoices directly from their bank accounts.
  • Payroll costs $20-$35 per month plus $4 per employee per month. Payroll services aren't included with the software, but you can add it to the program for $20 or $35 per month (depending on your state) plus $4 per month for each employee or independent contractor. This price is comparable to QuickBooks Online's Enhanced Payroll service, which costs $19 per month plus $2 per employee per month.
  • Wave+ Bookkeeping service starts at $149 per month. If you prefer to have someone else take care of your accounting tasks for you, you can work with one of Wave's bookkeepers. It offers a free 20-minute consultation to help you decide if this service is right for you. The company also offers a 30-day free trial for its payroll service. The Wave bookkeepers can categorize transactions, reconcile accounts, work with your tax accountant and help you catch up on previous months if you've fallen behind.
  • Wave+ Accounting Coaching costs $249. If you're new to accounting and don't know where to start, you can hire a Wave expert to teach you bookkeeping. This service includes 120 minutes of live coaching and 30 days of email support from your Wave expert. They can help you set up your account correctly, migrate your data from another system, review your account and fix errors.

It's easy to use Wave Accounting, and even easier to get started. You can create an account in seconds by entering your email address and setting a password (or you can register using your Google, Yahoo or ADP credentials).

After signing up, you can customize your account by filling out your company name and business type, which Wave uses to create a dashboard that suits your needs. You'll also enter your contact information, such as your business address and phone number, so that this information automatically appears on invoices and other documents.

When you log in, you're greeted with a simple dashboard that uses a sidebar menu divided into categories – Sales, Purchases, Accounting, Banking, Payroll and Reports – so you can quickly find core functions. With Wave's user-friendly interface, we quickly found our way around the program and easily created invoices, ran financial reports, and performed other basic accounting tasks.

The dashboard displays at-a-glance views of your cash flow, profit and loss, bank and credit card accounts, payables, receivables, and recent activity. You can find out more about this software or experience Wave yourself by signing up for a free account.

Unlike with other platforms, a free trial isn't necessary for Wave, since the service is free. You can try the service out without spending any money. That's a big plus.

The small business owners we spoke with said the main thing they look for in accounting software is features that save them time. Wave provides several automated features that fulfill this requirement.

  • Invoicing: This online accounting software has several timesaving tools for invoicing, including recurring billing, which allows you to schedule and automatically send invoices to customers, such as for regularly scheduled services or a subscription. You can also set up automatic payment reminders to encourage customers to pay their bills on time. If your business sends estimates or quotes to your customers, you can convert them to invoices in two clicks, saving you the time of re-entering or copying data.
  • Bank feed: Wave automatically syncs your data, so you don't have to manually input transactions yourself. It securely connects to 10,000 financial institutions – including banks, credit cards and PayPal – to automatically download and import expenses, deposits, and other financial data in real time.
  • Automatic backups: Your data is stored in the cloud and automatically backed up, so you don't have to worry about losing your information or redoing everything if your internet connection goes down or your computer is lost, stolen, or damaged.
  • Mobile apps: Wave has two apps – Receipts and Invoice. Both are available for iOS and Android phones. Using Receipts, you can take photos of receipts, which it then translates into an expense transaction using optical character recognition (OCR) technology, saving you the time of manually entering data for your expenses. The image of the receipt is then attached to the transaction so you can review it for accuracy. With Invoices, you can create, customize, and send invoices and payment reminders; check invoice statuses; and accept payments.

While Wave might not have as many features as some of the other accounting software solutions on the market, it offers a good set of features for a free product. This service doesn't offer drastically different features from many of the top paid services.

As mentioned above, you can invite an unlimited number of collaborators, such as accountants and business partners, to the program, which is a nice perk that not every accounting system offers. You still need to be selective about whom you invite, though, because there are only three user roles. Viewers can see sales, purchases and reports but can't create or edit anything. Editors have full access to purchases, accounting and reports, and limited access to sales. They can't see bank information, credit card payments or account settings. Payroll administrators can only access the payroll section of your account.

Here are some of the other features Wave offers:

  • Reporting: Wave can easily and quickly create accurate financial reports, such as balance sheets, sales tax reports, profit and loss, a general ledger, aged receivables, and customer statements.
  • Integrations: Wave offers integrations for Shoeboxed, Etsy and PayPal. It also connects to Zapier, which you can use to integrate with hundreds of apps, and provides several "Zaps" on the Integration tab of your account that make it easy to connect.
  • More payment acceptance options: In addition to accepting credit card and ACH payments online for invoices, Wave has announced Wave Checkouts (in beta at time of review). This feature allows you to send a link, rather than an invoice, to a customer, who can then make an online payment. Alternatively, if your business has a website, you can embed the checkout there. This is a useful feature for businesses that require payment upfront.
  • Multi-business support: You can set up multiple organizations under your Wave account and switch between them. You can't move transactions between businesses, however, and there isn't a platform that allows you to monitor multiple businesses at once.

None of these are necessarily industry-leading features, but Wave offers solid features overall.

Wave is excellent free accounting software for small businesses – especially new, service-based businesses with very tight budgets – and has a good selection of features. But it's missing a few that some businesses may consider necessities, such as the following items:  

  • It doesn't track billable hours, and although you can track expenses, you can't automatically attach them to invoices, so you'll need to figure out a workaround if you need these features.
  • It doesn't track inventory or create purchase orders, which is inconvenient for companies that carry more than just a few products.
  • It's missing fixed asset management tools, which may be problematic if you need to calculate depreciation on computers, equipment and office furniture for taxes.
  • It doesn't provide phone support; customer service is now by email only. If you prefer to speak with a customer service or tech support agent when you experience an issue, this isn't the accounting software for you. However, Wave provides several resources for troubleshooting issues yourself. Within the software, it has popup and WaveBot tips and a help button that connects you to the community forum or the support page. Wave's website has getting-started guides, video tutorials, how-to articles, FAQs, tips and a blog.

The major drawback to Wave is a lack of advanced features and customer service channels, but for a free service, you can't get much better than Wave.

Additional reporting by Bennett Conlin.

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Lori Fairbanks

Lori Fairbanks has years of experience writing and editing for both print and online publications. After graduating from Brigham Young University with a Bachelor of Arts in English, she worked as a magazine editor and then as a freelance writer and editor for a variety of companies, including marketing firms and a medical university. She now writes for Business.com and Business News Daily about financial systems and services for small businesses, such as accounting software, credit card processing and point-of-sale systems.