2013 Review of Wave Accounting

From the March 2013 Review of SaaS Small Business Accounting systems.

Wave Accounting is part of Wave Apps, a suite of free or low cost apps which can be used by micro-businesses to run their business. The product is set up to work with business and personal accounts, and will automatically classify business expenses to accounts based on the payee information downloaded from the financial institution.

In the last year, the company has implemented a major update to its user interface, and has rebranded itself as “Wave Apps.” The company has added Wave Payroll, Wave Payments (merchant accounts), Wave Invoicing (invoicing tool), and Wave Personal (personal financial management tool) in the last year.

Basic System Functions: 4 Stars

The product is a very simple tool, which is designed for businesses with one to five employees. Wave Accounting is primarily focused on billing and collecting receivables, tracking and paying bills, and monitoring cash and credit card balances. While it is possible to create journal entries with the application, the product is really designed to create some basic reports from A/P, A/R, and banking data which is imported through the Yodlee financial institution gateway.

The product is very easy to set up, and many small businesses can have their transactions imported and data from the last 90 days is automatically classified to the extent possible in under 15 minutes. The application has the capability of working with both business and personal accounts, and different reports are available for the two different groups of accounts. Wave does not offer industry-specific templates, but users can manually modify accounts to meet their individual needs.

Core Accounting Capabilities: 4.5 Stars

The product is primarily concerned with handling accounts payable, accounts receivable, and banking transactions. Although a general ledger and financial statements are available, this tool is really designed for small service-based businesses with five or fewer employees. Invoices can be customized, created, and e-mailed as PDF files easily, and customers can pay using an affiliated merchant service, Payments by Wave (2.9%, plus $0.30 per transaction, funds deposited in seven days). If activated, Payments by Wave links can be placed on invoices, and customers can easily pay using any major credit card (MC/Visa/AX). More information on the payment service is available at www.waveapps.com/payments.

Although the product supports entering and tracking unpaid bills, there is no support for initiating payment for the bill through Wave Accounting (including both electronic disbursements and printing checks onto checkstock). Although many small business owners will simply pay bills with a debit or credit card, and then import the payment into Wave from the financial institution, there is not a built-in tool for printing checks for accounts payable.

Payroll is available from Wave Payroll, another ancillary service. The product starts at $5 per month, per user (for a single employee), and the per user pricing drops as additional groups of employees are added. More information is available at www.waveapps.com/payroll.

Wave Accounting supports multiple foreign currencies, but does not have a formal audit trail report, not does it support any languages other than English. The product also does not support intercompany transactions, consolidation, or combined financial reports.