Xero vs Wave for October 2024 Best Accounting Software Programs

Wave is the better option if you’re a beginner to online accounting software and need a more lightweight solution. Xero might be a better pick if you have some experience in using accounting software. 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. While Wave does offer Wave+ — with their own in-house bookkeepers and accountants — it is the least flexible solution.

1. Of course, not all small business accounting software is created equal.
2. Their self-service payroll option is $18 per month + $4 per employee per month.
3. Wave’s free and low-cost plans are great for small businesses, while Xero’s more robust feature set is well suited for medium to large businesses.
4. Another area where Wave falls behind is with its number of integrations.
5. Finally, they are awarded points based on the ease with which users will find assistance from independent bookkeepers with expertise in the platform.

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To track expenses outside of reconciled bank transactions within Xero, you’ll need to choose the $60/month plan with access to the Expenses feature. If you’re outside the US, Xero’s Expenses feature (and Projects) is available as a paid add-on instead. As you sift through the ocean of options, keep these features and considerations in mind. You’re not just choosing software; you’re choosing a financial partner for your business. Top Consumer Reviews has reviewed the best small business accounting software solutions to help you make this choice.

When to choose Xero

Wave has surprisingly well-developed invoicing, which is unlimited even on the free plan. There are also a handful of automations available, although automated payment reminders are only available with Wave Pro. Xero offers decent invoicing, although it only has a single template.

Does Wave charge for payroll?

Wave also has paid add-ons, including Wave Payroll, which starts at $20/month for self-service states and $40/month for tax-service states. Other paid services include Bookkeeping Support ($149/month) and Accounting & Payroll Coaching ($379 one-time fee). All three platforms accept all of the major credit cards (Visa, Mastercard, Discover, and AMEX) as well as bank account payments (ACH) and PayPal. Wave’s reporting features are also easy to use but lack depth when it comes to sales tax, inventory, and employee data.

However, Wave wins in this category because it’s more affordable than Xero. It features the Xero App Store, wherein you can get third-party apps that can integrate with Xero. You can use popular apps—like Stripe, PayPal, Gusto, DEAR Inventory, HubSpot CRM, Mailchimp, Hubdoc—and other industry-specific apps.

However, since Wave’s accounting features are limited even in the paid plan, you may want to go with Xero instead to access better accounting features for an inexpensive monthly price. The final thing to consider for your equivalent annual annuity eaa small business accounting software is your budget. It is worth noting that the pricing plans for all three platforms include add-ons and extra fees on top of their base plans.

Wave’s accounting software lets you track unlimited expenses. Each expense record can have details, including date, vendor, amount, and category. You’ll also be able to attach an image of the receipt from your device directly to the expense. Xero enables you to monitor expenses, categorize them, turn them into invoices, and bill your clients. The bad news is there’s no phone support or live chat but only email support. You can always hire a Xero professional advisor to teach you how you can best use the software for your accounting needs.

The bank reconciliation module must accounting for a capital lease also let users reconcile accounts with or without bank feeds for optimal ease of use. Lastly, the software must generate useful reports related to cash. When comparing Wave Accounting vs Xero for customer support, we give Wave the win here because it offers live chat support unlike Xero. To access live chat and email in Wave, you have to purchase any add-on in the free plan―like payroll and receipt capture―or upgrade to the paid version. With Xero, you can only access support by chatbot and email or through self-help information.

While Xero primarily recommends Gusto to its users, it syncs with other popular payroll providers like SurePayroll by Paychex, OnPay, ADP, Wagepoint, Deel and Oyster. In short, while Wave reconciliation in account definition purpose and types does quite a lot for business owners, neither its free nor paid plan can keep up with Xero when it comes to sheer features. Xero and Wave are both leaders in the accounting software field, but they cater to different types of businesses. Xero is superior in this category, as Wave doesn’t offer inventory management features. If you need basic expense-tracking functionality, Wave can be a solid option.