Wave

Free double-entry accounting service Wave keeps getting better. Its appealing design and powerful features make it our top bookkeeping choice for freelancers, sole proprietors, contractors, and very small businesses.
  • Pros

    Free, though payments and payroll incur standard fees. Smart selection of features for very small businesses. Excellent transaction and payment screens. Exceptional user interface and navigation tools. Multicurrency.

  • Cons

    No project tracking or dedicated time-tracking features.

  • Bottom Line

    Free double-entry accounting service Wave keeps getting better. Its appealing design and powerful features make it our top bookkeeping choice for freelancers, sole proprietors, contractors, and very small businesses.

Editors' Choice By Kathy Yakal

Wave jumps significantly in the online accounting standings this year, and for good reason. For one thing, the free service only charges you for payments, payroll, and premium support. Furthermore, Wave has made significant improvements and added functionality, including a total revamp of invoicing, better speed (both in terms of page refreshes and improved navigation), and a new merchant account option: Payments by Wave. Not only is Wave the best free small business accounting website, but it's one of the best online resources period for its target small business audience: freelancers, contractors, and sole proprietors.

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Setup Aids

Whereas other services can cost anywhere from $10 per month for QuickBooks Self-Employed to $20 per month for Less Accounting, Wave's accounting features are absolutely free. That's an good selling point at any level of business, but especially for freelancers and the like, for whom every dollar matters.

When you first create a Wave account and sign in, the application provides help with setup of the site itself (including bank account connections, invoicing, and payroll) through a series of emails. Connecting to your financial accounts is an especially important task, since Wave is built on this exchange of data. You can download both business and personal transactions, separating them for bookkeeping purposes and reconciling the accounts. If you have customer and vendor data stored in a CSV file or Google Contacts, you can import it into Wave.

After that it's a good idea to visit the Settings menu to prepare Wave for use with your business. Here, you customize your sales forms (there are more options than ever, and they're better than those of the competition), select your primary currency, and set up sales tax. You'll be able to establish your payment gateway (Wave's own), enter payroll information, and assign limited permissions to collaborators. Wave gives them separate logins, unlike GoDaddy Bookkeeping. Some of the settings that were here two when I last reviewed Wave have since been moved closer to the features they support, which is a welcome interface update. FreshBooks, too, is taking this approach, and it's a good one.

The Settings menu is always available, so you can add and edit information here as you go along, but by at least browsing through them before you begin, you can learn more about the site's capabilities.

Smooth Operations

All online accounting services claim to be easy to use. Wave actually lives up to that claim. It's one of the cleanest, most understandable, and best-looking business services I've seen, topped only by FreshBooks in this regard. Wave adheres to double-entry accounting standards (FreshBooks doesn't), but it does the grunt work in the background. What you see is never confusing.

Wave New Customer

Wave's user interface and navigation system are set up in a fashion similar to its competitors'. The main workspace sits in the right two-thirds of the screen. Ads that used to appear on the right side are now gone, which is another big improvement. Wave now makes its money by suggesting and selling related financial services. The left vertical pane, which has changed since the last time I saw it, now displays a series of tabs representing the application's sections: Dashboard, Sales, Purchases, Accounting, Banking, Payroll, and Reports.

As you click on each section icon, a submenu of options for that area appears. Click Sales, for example, and you can click again to go immediately to screens such as Estimates, Invoices, Customer Statements, and Products and Services. This is an excellent change, one that cleans up the individual working screens and saves you from wasting time hunting for functions. Wave is not as good as FreshBooks at tucking away its features, but it also offers many more of them. Every screen looks great, and all are easy to quickly understand.

There is little that's difficult about using Wave, except maybe its basic bank-reconciliation feature. But that's always a challenge, no matter how good your tools are. The service's simplicity begins with the home page or dashboard. All the online accounting services I've tested offer one, and they display similar types of information, though Wave's is the best I've come across for freelancers and small proprietors.

Wave's dashboard has improved since my last review, especially in terms of navigation. You get the most important news at the top: a list of overdue invoices and bills. You can click on any of them to view the underlying transactions; you can also send a reminder to overdue customers. Also showing on the dashboard are account balances, mini-aging reports, and income and expense numbers and charts.

The Transaction Table

Wave manages to include everything you need to know about transactions on one page. Most of this page is taken up by a current list of the transactions you've brought in from financial institutions (or added manually). This table's columns display each transaction's date, description (such as Taxi Receipt or Payment to Paper), amount, category (which you can edit if Wave has incorrectly assigned a transaction), and account, from the Chart of Accounts.

Wave Income and Expenses

To the right of each is a check mark, which you click to verify that the transaction is complete and correct, and a drop-down list of additional actions you can take, such as Split transaction, Create bill payment, and Move to Personal (if you're mixing business and personal transactions in one account, you can separate them this way).

There's more that you can do with transactions on this page. Click in the box in front of a transaction and you can recategorize it, delete it, or mark it Verified or Unverified. Put a check mark in front of two corresponding transactions, and you can transfer money between them or merge them. You do all of this using buttons and drop-down menus above the table.

When you click anywhere within a line, the Show Details button appears; this opens a small window loaded with additional options. Your Taxi Receipt, for example, would contain fields, icons, and drop-down lists that would help you enter the vendor, taxes, and currency. Icons at the top of the page are labeled with Add Income and Add Expense (manual transaction entry), Connect a Bank Account, and Upload a Bank Statement. Wave can sort your transaction list in a variety of ways, including type, category, account, and date range. No other service in this class has a page quite like this.

Billing Customers

The biggest changes to Wave since I last reviewed it are on the Invoices screen. Your invoice activity is displayed at the top, telling you how much money is tied up in overdue invoices and those coming due in the next 30 days. This page also shows the average number of days it takes for you to get paid. Below that is a tabbed list of your invoices that can be viewed by Unpaid, Draft, and All. You can also filter this list by date range, customer, and status, and you can search for a specific invoice by its number, too. Statuses are color-coded to make it easy to identify invoices, matching them at a glance.

Wave Reports

It's important that accounting sites design their invoice screens skillfully, so customers don't get confused and delay their payments. Wave does the best job of this among similar services I've reviewed, though I also like the way Kashoo handles this task, with a vertical pane that displays totals by aging periods and lists unpaid invoices by client. FreshBooks' team-collaboration tools let you toggle between lists of invoices you've sent and those that others—contractors, for example—have sent to you.

At the upper right of Wave's Invoice screen, a link takes you to a blank, preformatted invoice. If you've already built records for customers, vendors, and products, you'll mostly be choosing from drop-down lists to complete the form. If not, click the Add New option to open blank records. Wave's customer, vendor, and item record frameworks are perfectly sufficient for an application with this particular set of features, and they're as comprehensive as anyone's. When you're done with an invoice, you can save it as a draft and preview it if you like. FreshBooks only offers one invoice form, so you're always working on the form the customer will see. Eventually, Wave gives you the option to approve the form before you send it.

You can now send invoices through a variety of channels, including Wave itself, social media, and webmail like Gmail. You can also export them as PDFs or print them. If you've created an account with Wave Payments, your customers can see the invoice online and pay with a credit card. You can view processed payments in the Banking area.

The remainder of the navigation pane's tabs take you to Wave's other features: Banking, Purchases (bills, receipts, and so on), Accounting (transactions, chart of Accounts), Reports (the standard financial reports and a few others), and Payroll (which is surprisingly simple and thorough for a free app, though there are related fees for using Wave's service). Unlike some competitors, which offer all remote capabilities in one mobile app, Wave has split its apps in two, one for receipts and one for invoices, available for iOS and Android. I'd prefer that they were combined into one app, but, like the site itself, both are well designed and easy to use.

Ride the Wave

There's something satisfying about using an application that just fits. You're not bothered by a lot of words and pictures that don't apply to you. Wave's combination of user interface and navigation aids and its smart choice of feature options should be just right for freelancers and sole proprietors who need an online accounting service. Whether you use it a little or a lot, and you still don't pay anything for the core accounting tools. Wave has come a long way over the years, and it wins an Editors' Choice for the first time this year.

By Kathy Yakal

Kathy Yakal has been annoying computer magazine editors since 1983, when she got her first technology writing job because she tagged along with her ex-husband on a job interview. She started freelancing and specializing in financial applications when PCs became financial tools for consumers and small businesses (after a stint at a high-end accounting software company). She’s written for numerous publications over the years, and about the only one that’s survived her besides PC Magazine (where she started writing in 1993) is Barron’s. When she… More »

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