Lisa Huyhn
The pressures of running a small business can often mean making compromises when it comes to the software that you choose to run. A few dollars for license here and then a few more dollars there and all of a sudden – you’ve spent more than you can afford. That’s why we have chosen Wave Accounting as the best free accounting software for small businesses; it simply can’t break the budget.
It is, however, not a package for every business. Wave Accounting is aimed squarely at very small businesses. So it’s prefect for your average freelancer, solo entrepreneur, consultant, etc. and in fact any business that is likely to have fewer than 10 employees for the foreseeable future. It’s not so good for those expecting rapid expansion or with large employee bases already.
Why Did We Choose Wave Accounting?
There were a fair number of factors which led to our recommendation of QuickBooks online including:
Reputation
Wave Accounting launched the first free cloud based accounting software “Accounting by Wave” back in 2010 and today they manage over $50 billion worth of income and expense reporting including over $5 billion worth of invoicing. Unlike many “free” models their product is truly free rather than “freemium” so you get access to all their core functionality without spending a dime. They do offer a mobile app for free too but that platform has some advertising displayed on it to cover the costs of running it.
Cost of Use
It would be hard to beat “free” when it comes to the cost of use of an application in any area. However, there are adverts served on the platform which is how the company pays for the service and there is no paid option to remove those adverts – so if you don’t want ads; this might be a deal breaker.
There are additional services, which are reasonably priced, that you might want to pay for and we’ll examine these in the section below “the limits of free”.
It’s Easy to Use
Wave Accounting is surprisingly easy to use for a free package. Sign up just involves handing over an e-mail address and creating a password then you fill in a quick form with your business details and Wave generates a dashboard based on what it thinks you will need from the service.
You can enter all the details you need to create invoices simply and easily then it’s on to using the dashboard. The dashboard isn’t quite as functional as the one in QuickBooks but it is very good and menus are labeled clearly and in plain English so you should have no problem processing transactions, bills, reports, etc.
If you’re not sure whether Wave Accounting is for you; the company provides a free webinar service on a regular basis so that you can see what you’re getting in to and ask questions.
There’s Plenty of Task Automation
The best accounting packages take the hard work of managing accounts away from the business owner; otherwise you might as well just keep physical books. Wave Accounting is well structured to take a lot of the work away from the user through the use of task automation.
You can set up automated billing (and of course invoicing too) and one handy feature is that you can also set calendar style reminders so you can see what has and hasn’t been paid.
When you use Wave you can also connect it to many of your other financial systems from PayPal accounts to credit cards and bank accounts. If you want this service, you should check to see if your bank is supported by Wave before you start using it.
One very nice feature of Wave Accounting is the regular backup service, also free, that ensures your data is secure against loss.
The reporting functionality is pretty good with a bunch of ready-made templates that you can employ to deliver standard reports such as your balance sheet or profit and loss accounts. For those businesses which need custom reporting there are decent tools to develop your own reports included in the package. The dashboard also provides some basic “at a glance” data that lets you keep an eye on the meaningful numbers without spending time on generating reports.
Customer Support
You get what you pay for isn’t always true and Wave’s basic level of customer support is excellent. There’s an FAQ, webinars, user guides, community forum and more all included in the basic free package. It’s more than enough to get you started and covers the majority of what you will need when using Wave.
The Limits of Free
There’s only so much a company can do when you’re not paying for its services and there are some limits on what you can expect from Wave Accounting before you put your hand in your pocket.
Firstly, there’s no customer service telephone line without paying for their premium service option. We don’t think this should be a deal breaker as the software is easy to use without service but you should be aware that you’ll end up shelling out $9 a month (or more) for the privilege of speaking to someone in the office.
Then there’s the question of payroll. While some small businesses will get payroll services from their bank account many others rely on their accounting package to take care of it. Payroll isn’t free on Wave and at $15 a month base cost plus $4/month per employee we think that’s a little steep. You are also restricted to using Wave’s payroll tool and can’t choose a different one to work with. This may make some users think twice before selecting Wave – this can get expensive compared to other paid accounting packages which offer more flexibility and payroll as a standard part of the package.
We’ve touched on this before but it’s also worth remembering it’s an advert supported service. You can’t turn the ads off and there’s not even a paid option to get rid of them.
Summary
We really like what Wave Accounting does. It’s a great solution for cash strapped startups and very small businesses. The paid for payroll option is a bit of an issue but you’re not required to manage payroll through Wave – it’s just convenient to do so. You can’t beat “free” and Wave is truly free unlike some of the “freemium” services out there. You might want to be cautious about getting involved with Wave Accounting if you’re the type of person who needs a bunch of telephone support but otherwise – there really are no downsides for small businesses looking for the best free accounting software on the market today.
