Their impressive list of features and tools allows businesses of all sizes to get the most out of their accounting software. The software must have features that allow users to set sales tax rates, apply them to invoices, and enable users to pay sales tax liability. The banking section of this case study focuses on cash management, bank reconciliation, and bank feed connections. The software must have bank integrations to automatically feed bank or card transactions.
Customers we interviewed were all extremely complimentary of Wave and indicated that they had neither the need nor the desire to switch to a new software anytime soon. Compared with Wave, Xero is a more sophisticated product overall. It’s correspondingly more difficult to use, but most businesses will likely find it more valuable. This round is a tie as both apps are available on all modern browsers. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you.
- It can record recurring bills, but users have to record the payment of the bill manually.
- While Wave can be used to create estimates for a project, it cannot track costs by project.
- You can enjoy project conversations, file sharing and project due dates, but these features are most helpful for individual or small-team projects.
- Wave’s free accounting software is a suitable choice for small, service-based businesses that don’t require advanced features.
- Because the inventory management is somewhat lacking, it’s not the best option for product-based businesses.
Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin are tax service states. Take note that these charges aren’t from Xero but from payment channels. Want to look more polished, save more time, and conquer cash flow?
Inventory: Xero Wins
There were several complaints about either slow responses or long phone support hold times with both Wave and QuickBooks. The key features you need will vary depending on the systems and processes of your business. These features save you a ton of time and effort that you can instead invest in the truly important work for developing your professional path as a freelancer.
It’s one of the most user-friendly and modern platforms on the market, making it ideal for those who are just starting out with accounting software. A popular online accounting app designed to meet the needs of small and medium businesses in any industry. One of the most user-friendly accounting solutions available today, Xero features real-time tracking https://intuit-payroll.org/ of accounts receivable, expenses, billing, and invoicing. Time-saving features like scheduled payment reminders and automatic credit card payments. Connects seamlessly with Wave’s invoicing and accounting software, so you’ll always have the information you need in one place. Compared side by side, Xero is clearly the winner when it comes to features.
Knowledgebase & learning
There’s enough white space on the web page in case you’re multitasking on one computer screen. For subsequent use, it’s easy to use the solution, and we think it’ll take less than a week for new users to understand the basics of the software. All FreshBooks plans, except for the highest-tier custom plan, come with one user.
Xero and Wave
This automation minimizes the need for manual input, allowing you and your team to allocate your time and resources to more strategic business activities. Works with 3rd party payment processors PayPal, Stripe, and GoCardless.Each payment processor charges fees for its services. It can also be used with Zapier, so that the platform user has access to even more apps. Xero’s smart categorization functionality remembers the past transaction categories you used and automatically categorizes new transactions for you. The software comes with several tools that help automate the reconciliation process. Although Wave offers a solid number of invoicing features, Xero’s features are more developed.
You need to start off by outlining your criteria for the financial software that you want to have. Make sure to list any specificities about your business that require a special feature. Accounting software offers insightful dashboards and visual representations of your financial data. These tools help you analyze trends, identify opportunities, and address challenges in your business. Different stakeholders, such as investors, lenders, and regulatory authorities, require specific financial reports. Accounting software offers customizable reporting options, allowing you to generate reports tailored to the needs of your audience.
Xero, on the other hand, is best for small businesses that want to take the step up from tracking expenses in Excel. It has all the functionality you need to manage transactions, calculate payments and track projects at an affordable entry point. 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.
Xero is the better option for users who prefer working in desktop accounting software rather than in online apps, as it’s the only one of the two that has desktop apps. While there’s no desktop app for Wave, the web-based platform is designed to be user-friendly and accessible, so you’ll be able to complete accounting tasks from anywhere at any time. Wave is designed for ease of use and is accessible to those with no prior accounting software experience. If you’re new to accounting software, Wave may be a great starting point, especially if you don’t have the time to invest in learning a more complex solution. Now that we’ve compared 10 basic accounting terms defined in terms of pricing, free plans, and customer service, it’s time to see how they stack up against each other in features and functionality.
This software provides a centralized platform that empowers businesses to effectively oversee and streamline various financial operations. The Wave dashboard, as you can see, offers crucial graphs and information regarding payments. You can not only see your overdue invoices and bills, but add customers, vendors, send invoices, and more.
Wave vs Xero online versions
Xero also offers payroll through Gusto at $40 per month, plus $6 per month, per employee. If you run an e-commerce or physical products business, you shouldn’t use Wave. The platform is designed for service businesses and has minimal inventory management features. You can track the time spent on different tasks right within the platform, so timesheets become a thing of the past.
Xero is superior in this category, as Wave doesn’t offer inventory management features. There’s the Xero Accounting app that lets you do most of the tasks you can do in the online version. The Expenses mobile app lets you claim expenses and mileage, as well as approve, edit, and decline claims. With so many fantastic accounting software companies out there these days, it can be hard to pick the best one to fit your specific business needs.
You can send custom invoices, set up recurring invoice templates, match payments, and even batch invoicing (on the advanced plan). 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. Xero is one of the best accounting solutions for small businesses because, while it’s not as advanced as the top tools on the market, it comes close for a fraction of the cost.
If you’re a merchandising business, we recommend Xero for tracking inventory units, COGS, and purchases. You can also customize Xero’s reports to fit your business needs and hone in on the most important insights for growing your business. Wave Starter users can add receipt scanning for an extra monthly fee of $11/mo. Both FreshBooks and Xero are cheaper than QuickBooks while offering many of the same functionalities. QuickBooks has more inventory management and budgeting tools than FreshBooks. QuickBooks also has a more intuitive interface than Xero as well as a desktop version.
Ease of use gets the highest weight in this case study because we want to give more credit to easy accounting software. For this section, we considered customer service, support network, and a subjective expert opinion score. Users must have easy access to customer service channels in case of problems, questions, or assistance. Xero, on the other hand, comes with a steeper learning curve, due to its extensive feature set, and gets easier to use once you familiarize all the features. We have an extensive history of reviewing small business accounting software, and we stay up-to-date with the latest features and enhancements. Our first-hand experience, guided by our internal case study, helps us understand how the different products compare with each other and how they work in real-world scenarios.