Xero vs Wave: Which Is Better Accounting Software?

Wave has the features you would expect for small business accounting software. Wave’s notable features include bank reconciliation, expense tracking, invoices, accounts payable, contact management, and inventory management. As we’ve mentioned, it’s hard to beat Wave when it comes to pricing. As one of the only truly free accounting software platforms on the market, Wave isn’t only free, but it’s highly functional—including a handful of tools for free, that you have to pay to access with Xero. Once again, Wave includes expense management tools and multi-currency functionality, both of which require the highest Xero plan.

The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships. It’s worth noting that Xero has one of the lowest starting prices of any paid accounting software for small businesses — including Wave Accounting Pro, though Xero only beats Wave’s price by $1. Businesses with inventory items should choose accounting software that can track inventory costs, manage cost of goods sold (COGS), and monitor inventory units. The A/P section focuses on vendor management, bill management, bill payments, and other payable-related transactions.

Xero Software Integrations

Simply sign up for Wave’s free plan, or take Xero for a spin using its 30-day free trial. While everything may sound good on paper, you won’t know which option is right for your business without getting hands-on first. Wave has surprisingly well-developed invoicing, which is unlimited 8 important examples of small business paperwork systems even on the free plan.

1. With Payments by Wave, you’ll be able to accept online payments from your customers, including both credit card payments and ACH transfers.
2. 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.
3. Ultimately, both Wave and Xero are competitive solutions for managing your business accounting processes; however, there are certainly benefits respective to each platform.
4. The feature we like best is its bank reconciliation module—except for the fact that users can’t enter ending balances of checking accounts to start reconciling.
5. However, like Xero, Wave is a web-based software, meaning you can use it wherever you have internet access.

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Xero’s payroll integrations are particularly useful for small and midsize businesses that pay workers globally. For instance, Gusto offers optional international contractor payments, and both how to use financial reports to calculate return on assets Deel and Oyster offer international payroll. Xero’s integrations make it possible for international business owners to track payments without re-entering financial data every time they run payroll.

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. We believe that small businesses should invest in accounting software with powerful A/P features to enable them to process vendor credit memos and create purchase orders (POs). Wave is on par with Xero in terms of invoice customization, but Xero has more advanced invoicing features, making it our winner in this category.

Satisfaction that Cost is Fair Relative to Value

A/P features include accounting for unusual account balances and offsetting creating vendors and bills, recording purchase orders and converting them to bills, creating service items, and recording full or partial bill payments. We give Xero a perfect score in project accounting because it contains all the features we’re looking for, especially project estimations, project cost assignment, and cost variance analysis. While Wave can be used to create estimates for a project, it cannot track costs by project. The information collected illustrates how users view their interactions with their software and their vendor. Our proprietary evaluation methodology is built on decades of experience helping businesses select software. We surface key elements every prospective buyer should review and understand prior to selecting a software provider.

Based on all of the information we’ve reviewed, how do Xero and Wave stand out against one another? Ultimately, both Wave and Xero are competitive solutions for managing your business accounting processes; however, there are certainly benefits respective to each platform. However, like Xero, Wave is a web-based software, meaning you can use it wherever you have internet access. You can sign up for a Wave account quickly and easily online—and once you do, you’ll be able to utilize any and all of the capabilities included within their main software. Explore how the AI revolution and machine learning are transforming bookkeeping for small businesses.

Project Accounting: Xero Wins

While Xero isn’t free, its $20 a month starting price is one of the lowest of any paid accounting software product — including Wave’s paid accounting product, which starts at $16 per month. It’s also incredibly fully featured with built-in inventory management, time tracking and project management. Xero is cloud-based accounting software for small to medium-sized businesses with a subscription model offering three plans priced between $15-$78/month. The software has a broad range of features, including bill payment, inventory management, and the ability to integrate with numerous apps like HubSpot and DocuSign. Wave offers a freemium business model that provides basic invoicing and accounting services at no cost, with additional paid features like Mobile Receipts, Payroll, and Advisors plans for more specialized needs.

Xero’s well-developed contact management feature is especially worth checking out. With Xero, you’ll find features such as a customizable dashboard, invoices, quotes, contact management, bank reconciliation, inventory management, accounts payable, and expense tracking. If you want a built-in payroll, you’re out of luck, although Xero integrates directly with Gusto.