Xero vs. Wave: Which One Is Better?

When it comes to choosing accounting software, there are many options. Two of the most popular choices are Xero and Wave. So, which one is better? This blog post will compare the two programs and help you decide which one is right for you. Remember that the best choice for you may depend on your specific needs and business size.

Choosing the right accounting software for your business can be a daunting task. There are so many different options to choose from, each with pros and cons.

This blog post compares Xero and Wave to help you decide which one is better for you. We'll break down the features of each software and the cost and ease of use so that you can make an informed decision about which one is right for your business.

Making the switch to cloud-based accounting can be a little daunting. There are so many options to choose from, and it's hard to know which one is the right fit for your business.

Both Xero and Wave are great accounting software programs that offer many features and benefits. However, which one is the best for your business? This blog post will compare Xero and Wave to help you decide which one is right for you. We will discuss the pros and cons of both programs and help you decide which one is the best fit for your needs.

Let's get started!

Xero & Wave Comparison Summary

Because it is not as sophisticated as the industry's leading tools, Xero is one of the most affordable accounting software options available, making it an excellent choice for small firms.

We conducted interviews with two professional bookkeeping businesses, and both of them chose Xero because, in their experience, it provides roughly the same capability as QuickBooks Online at a significantly lower cost and is much simpler to use.

Due to the simplistic nature of its inventory management tools, the freemium accounting software Wave is best suited for sole proprietors and businesses that focus on providing a service to customers. However, because the most fundamental accounting functions are provided without charge, getting started with the software will only take a few moments of your time.

In a nutshell, the following categories of people are the ones that we recommend each tool for:

You'll favour Xero if:

• You are interested in finding software that has a high performance level while charging a fee that is not excessive on a monthly basis.
• You either sell goods or services, or possibly both.
• You have an interest in Xero's Marketplace, which now offers more than 800 pre-built connectors.

You'll favour Wave if:

• You provide your services on your own or run a modest service-oriented firm.
• You want the freedom to add only the premium features that you actually require, don't you?
• The simplicity and adaptability of use should be your first priority.

Xero vs. Wave: Features

Keeping this big picture in mind, let's examine the differences and similarities between Wave Accounting and Xero in terms of their respective feature sets.

To begin, one of the primary distinctions in the functionality of these two solutions is that Xero's features mostly depend on which of their three plans you choose to purchase. This is only the beginning of the functional variations between these two solutions. In contrast, Wave only provides one service, but you can customise its capabilities by integrating one of its two premium add-ons. These add-ons can be purchased separately.

1. Xero Features

Xero is a web-based accounting tool that, as we have indicated, allows you the ability to view and manage your account from any location provided that you have an internet connection. In addition, the software can be purchased through one of Xero's three different subscription plans: Early, Growing, or Established.

Although the precise plan you select will determine which of the included features you have access to, in general, you may anticipate the following benefits from using the Xero software:

• Invoicing: Create and send customised invoices, as well as set up recurring invoices and automatic payment reminders

• Unlimited users: Without incurring any additional fees, you may make your account accessible to an unlimited number of users.

• Access to mobile apps: If you want to track expenses, invoice customers, and reconcile accounts while you're on the road, download the Xero mobile accounting app.

• Creating and sending customised quotes or estimates, as well as converting approved quotes into bills, are all part of the quote process.

• Bank connections and reconciliation: Connect your bank account to Xero so that Xero may automatically import transactions from your bank account; your transactions need to be reconciled and categorised.

• Management of inventory entails the creation of inventory items, the monitoring of stock levels, and the estimation of the value of your commodities.

• Purchase orders: Draft and transmit individualised purchase orders; transform them into bills or invoices; monitor and analyse sales and expenditures.

• Xero's reporting capabilities include the ability to personalise financial reports, view and share interactive reports, and monitor business performance via the dashboard.

• Tax on sales: Xero connectors allow you to automatically compute tax rates, change tax rates, and set defaults; you can also use these interfaces to file tax returns.

• Contacts: Make sure to keep a comprehensive directory as well as a record of your previous interactions with all of your clients and vendors.

• Integrate Xero with online payment processors so that you can receive payments straight from customers' invoices.

• Record and keep your fixed assets up to date, manage their depreciation, and dispose of them as necessary.

• Integrations: Integrate with over 700 third-party solutions, such as the comprehensive payroll service offered by Xero's partner, Gusto Payroll.

• Support for customers: Xero's customer support team is available online around the clock for assistance.

2. Xero Plans

Having said all of this, the Early plan, which is the most fundamental one, does offer all of these capabilities; nevertheless, the Early plan is restricted to the following features:

• Five invoices and quotes
• Five bills
• 20 bank transactions

These limitations are removed when you upgrade to the Growing plan, which afterwards grants you the ability to send an unlimited number of invoices and quotes, enter an unlimited number of bills, and reconcile an unlimited number of bank transactions. Last but not least, the Established plan brings the following skills to the table:

• Accept payments; receive bills; send invoices, quotes, and purchase orders in more than 160 different currencies thanks to the multi-currency functionality.
• Expenses: Keep tabs on your spending and easily manage cost claims using receipt scanning, labelling, and category organisation, among other features.
• Projects: Easily manage projects and their profitability with integrated time tracking, bids, and bills, as well as dashboard monitoring

3. Wave Features

Overall, while Xero's features include inventory management, time tracking, and the evaluation of a project's profitability, Wave's features have a greater emphasis on general business bookkeeping and accounting. Xero's features also include the option to import and export CSV files.

On the other hand, similar to Xero, Wave is a web-based software, which means that you may use it wherever you have access to the internet. As a consequence of this, you can sign up for a Wave account online in a way that is both quick and simple, and as soon as you do so, you'll be able to make use of any of the features that are integrated into their primary software.

The following are some of the properties that Wave possesses:

• Connect an infinite number of bank and credit card accounts to Wave, and the platform will import transactions from those accounts automatically. Wave also supports foreign currency.

• Income and expenditures: Keep tabs on an unlimited number of income and expenditure transactions; personalise both income and expenditure categories; search expenditure and income category descriptions.

• Invoicing: You can create and send an infinite number of invoices; receive rapid updates for invoicing data; set up automatic reminders of outstanding invoices for your clients.

• Scan your receipts, check the information, and sync it with your Wave account to keep track of your costs.

• Bills: Keeping track of and managing your bills

• Dashboards: Make use of dashboards to monitor things like cash levels and the status of invoices.

• Access and export a variety of accounting reports, including profit and loss accounts, cash flow statements, and more.

• Sales taxes: Customize sales taxes

• Multi-currency: the ability to accept payments in multiple foreign currencies and to get exchange rate computations automatically

• Management of accounts: Conduct several enterprises out of a single account; invite collaborators to provide team members or consultants access to your account.
• Apps for mobile devices: Download free apps for invoicing and receipts to use these capabilities on the move with your mobile device.

• Connect to Zapier, PayPal, Shoeboxed, and Etsy through the integrations; Shopify transactions can also be integrated.

• Help for customers is available in the form of support via email from the Wave team.

4. Wave Add-Ons

The fact that Wave only offers one plan, which is free, and that everything described above is included in their software differentiates Wave's service from that of Xero in a fundamental way. However, in addition to their standard accounting solution, Wave also offers two premium add-on services that, when used in conjunction with your free account, will allow you to increase the capability of your business. These services can be found here.

Wave specifically offers a service known as Payments by Wave in addition to Wave Payroll.

You will be able to take online payments from your customers using Payments by Wave, which includes the ability to accept credit card payments in addition to ACH transfers. You will also be able to set up regular billing with automatic payments, and your payments will sync automatically to your general Wave account. This functionality will be available to you.

You may run payroll to pay your employees and contractors with Wave Payroll, which syncs directly with your Wave account. This, as you might imagine, allows you to pay your employees and contractors. In addition, you will have the ability to print checks, set up direct deposit, connect workers' compensation coverage, compute vacations, bonuses, and other benefits, and even connect workers' compensation coverage.

You can also allow employees access to view their pay stubs, W-2s, contact information, and banking information through Wave Payroll. This functionality is available to you.

In addition, depending on the laws in your state, you may also be eligible to make use of Wave's payroll tax services. You can utilise the information that is stored in your Wave account to file and pay payroll taxes in the other 36 states, even though Wave only offers complete payroll tax services in 14 of those states.

Finally, if you choose one of these add-ons, the Wave team will provide you with live chat help if you have any questions.

Xero Ease of Use

In spite of the extensive and sophisticated capabilities that Xero offers, we have determined that the software has an average level of complexity in terms of ease of use. Users will need some time to become familiar with the interconnection of the features because there are many features to investigate and learn about, and this will take some time because there are many features to investigate and learn about.

The process of setting up Xero for your company is made simple by the fact that it goes through a series of steps before arriving at the dashboard. The user experience (UX) that Xero provides is uncluttered and not at all frightening.

If you need to multitask on the same computer screen, there is sufficient white space on the webpage for you to do so. When used for future purposes, Xero is simple to use, and we estimate that it will take new users less than a week to become familiar with the fundamentals of the software.

Wave Ease of Use

Wave is simple to operate. Wave is a piece of free software that offers a straightforward and intuitive user interface. In addition, in contrast to Xero, Wave is far easier to use due to the fact that it has only fundamental accounting capabilities.

Because the majority of Wave's capabilities are straightforward accounting and billing operations, users will have an easy time learning how the platform performs. Its user experience is a little bit more up to date than Xero's, and it does not rely on tabular presentations for all of its modules.

Xero Advantages

When compared directly to Wave, Xero shines out due to the breadth and depth of its feature set, as well as its mobile app and the variety of integrations it supports.

First, as we've already established, even with their most basic plan, Xero offers a wider choice of functionalities within their programme than their competitors do.

In spite of the fact that the number of invoices, bills, and transactions that can be created is restricted with the Early plan, you do get access to features that are not available with Wave. These include unlimited users with fully modifiable roles, permissions, and access, inventory tracking, purchase orders, and management of fixed assets.

In addition, if you sign up for the Established plan, which is the most expensive one, you'll get access to project management features that Wave does not provide. Wave does provide several capabilities (for free) that need the Xero Established plan, such as expenses and multi-currency support. However, Xero still offers a bigger breadth of functionality within their platform. Wave is a better option for larger businesses.

Next, in comparison to Wave's mobile app, Xero's mobile app offers a significantly wider range of functionalities. For instance, the Xero accounting app enables you to handle the vast majority of your accounting tasks, such as reconciliation, invoices, bills, clients, and contacts, while you are on the move.

In addition, if you use Xero to manage your payroll, your employees will be able to download Xero Me, which will allow them to see payslips, apply for time off, and submit time sheets. In addition, if you have an Established plan, you will be able to download the Xero mobile apps that are designed exclusively for Projects and Expenses.

When you use Wave, on the other hand, you have access to two mobile applications: Invoicing and Receipts; but, neither of these apps grants you the ability to manage your general accounting responsibilities in the same way that the Xero accounting app does. These applications are designed to work only with a limited subset of the Wave programme and, despite the fact that they might be helpful, they do not provide the same level of accessibility as the Xero app does.

Lastly, in comparison to Wave, Xero provides a significantly wider variety of possible integrations. Although Wave gives you the ability to pay for either of their add-ons and connect to a handful of platforms, including Zapier (which as a platform itself allows you to connect to other tools), Xero integrates with over 700 tools, including everything from point of sale systems to tax software to customer relationship management platforms. Wave also gives you the ability to connect to a handful of platforms, including Zapier. Therefore, if you wish to link a product that you already use to your accounting software, it will most likely be much easier to do so with Xero as opposed to Wave Accounting. Xero also has a better mobile app.

Because of these advantages, Xero is a better option for companies who require additional functionality from their accounting software in addition to the fundamentals and are ready to pay extra for this additional functionality. Consequently, despite the fact that Wave is most likely the most functional and simple to use free accounting software available, Xero is significantly closer to the calibre of QuickBooks Online.

Wave Advantages

On the other hand, in contrast to Xero, Wave stands out due to its competitive pricing, in-house developed add-ons, and user-friendly interface.

In terms of pricing, Wave is difficult to compete with, as we've already noted. Wave, on the other hand, is not only one of the only genuinely free accounting software platforms available on the market, but it is also extremely functional and includes a handful of functions for free that you have to pay to get with Xero. This makes Wave a compelling alternative to Xero.

Once more, Wave comes with capabilities for spending management and supports several currencies; however, it is only compatible with the most expensive Xero subscription. In addition, the Early plan from Xero costs $11 per month and only allows for a limited number of invoices, bills, and transactions. Wave, on the other hand, allows for an unlimited number of each.

Having said that, in addition to their free software, Wave also offers commercial add-ons that are significant in their own right. These add-ons are typically inexpensive, offer complete functionality, and provide you with expanded capabilities that may be synced up with your Wave account in a seamless manner.

Even while Xero has connections with third-party solutions that can give you the same capability as Payments by Wave and Wave Payroll, it is unquestionably simpler to handle all of these services with the same supplier in the same location. Xero offers these connections.

In addition, despite the fact that Xero isn't especially difficult to use, Wave's user-friendliness stands out as exceptionally impressive. Wave is exceptionally easy to set up, use, and manage, even for those who have no previous experience with bookkeeping or accounting. Along these lines, it offers an interface that is very easy to use and accessible, making it perfect for the proprietor of any firm.

Although Xero and Wave offer capabilities that are comparable when it comes to invoicing, the invoicing software that Wave offers is one of the most amazing aspects of the platform. Not only is Wave's invoicing straightforward and easy to use, but it also offers an impressive degree of personalisation.

With all of this information in mind, Wave reveals itself to be a great alternative for business owners who are in need of a powerful yet user-friendly accounting platform that enables them to manage their important activities without having to pay a substantial amount of money to do so.

Xero vs Wave: Integrations

Xero is superior to Wave when it comes to the number of third-party app integrations. You can acquire third-party apps that integrate with Xero through the Xero App Store, which is a functionality that Xero includes. You have the option of utilising well-known apps such as Stripe, PayPal, Gusto, DEAR Inventory, HubSpot CRM, Mailchimp, and Hubdoc, in addition to additional industry-specific applications. Xero can also interface with apps that have been evaluated by our team. You might also find our reviews of Dext Prepare, Hurdlr, and Expensify to be helpful in gaining further comprehension.

To link Wave with third-party applications, you must first become a member of Zapier and then develop integration "Zaps" for each of the applications that you wish to integrate.

Xero vs Wave: Mobile App

Both the Google Play Store and the Apple App Store provide Xero and Wave as downloadable applications for users' mobile devices. Unfortuitously, both apps only include extremely fundamental functionality, and we feel that the apps are lacking in key features as a result. Due to the fact that Wave's mobile app is a free service, we shouldn't place too much focus on the fact that it does not include all of the functions that other mobile apps provide. At the very least, Wave's mobile app is already a plus.

On the other hand, the Xero mobile app lacks some of the functionality that we would like to see in a product of this kind. In general, the mobile apps for Xero and Wave have room for improvement, particularly Xero's mobile app given that it is a subscription service.

Xero vs Wave: Customer Support

The customer service offered by Xero and Wave is subpar. Support for Xero is only available in the form of a chatbot, email, or advice about how to solve problems on your own. In the meantime, Wave only provides support through its chatbot, and the material it provides for self-help isn't very extensive. Additionally, neither of the service providers lists a customer service phone number on their websites. We strongly suggest using Zoho Books due to its superior customer assistance.

Wave vs. Xero: Which Should You Choose for Your Business?

At the end of the day, it is up to you to examine the Wave Accounting vs. Xero comparison and determine which (if either) of these solutions is appropriate for your company's accounting needs.

Taking all of this into consideration, business owners that need a greater variety of functions contained within their accounting platform and who aren't bothered by the idea of including a monthly payment in their budget for this software may consider using Xero.

In addition, companies that maintain an inventory are likely better off going with Xero as their accounting software of choice. It might make use of Xero's tools for tracking purchase orders and fixed assets, as well as its inventory management capabilities. It is vital to keep in mind that if you want to get the most out of Xero's platform, you will almost certainly want to go for the Growing plan rather than the Early plan because the Early plan places restrictions on the ability to create invoices, bills, and transactions.

Wave, on the other hand, is an excellent choice for companies that are relatively young and smaller in size and that wish to systematise and automate their bookkeeping and accounting processes but do not necessarily require broad features.

Wave is an excellent option to consider using if you are primarily interested in finding free accounting software. In addition, whereas Xero is well-suited for businesses that have inventory, Wave can better accommodate service-based or B2B businesses. That is to say, Wave can accommodate any business that invoices their customers on a regular basis, which makes it an excellent piece of software for freelance accountants.

Making a list that details specifically what your company is looking for in accounting software and comparing the qualifications of Wave and Xero against this list is perhaps the easiest way to determine whether Xero or Wave is best for you. With all of this in mind, the easiest way to determine which one is best for you is to make a list.

Additionally, if you want to find out how each of these platforms actually functions, you can create a free Wave account or sign up for a 30-day free trial of Xero. This way, you'll get a better sense of exactly how Xero or Wave would (or wouldn't) meet the needs of your business. Additionally, if you want to find out how each of these platforms actually functions, you can create a free Wave account or sign up for a 30-day free trial of X

Can You Choose Between Wave and Xero? In Conclusiveness

If you had a clearer picture of which accounting programme would work best for your company, it would be easier to make a recommendation.

Wave is ideally suited for use by small enterprises that require only the most fundamental accounting functions as well as appealing invoicing. In addition, Wave offers an almost incredible free price structure. Wave is an excellent option for businesses that either want to reduce their costs or are not yet prepared to make use of the comprehensive functionality offered by Xero. In addition, Wave is an excellent choice for people who sell items on Etsy because the platform provides a solid interface with Etsy and enables users to keep their personal and professional costs separate.

Xero is the greatest option for businesses of all sizes, particularly those of a medium to big size or those looking for software that can scale along with their expansion plans. This piece of software has features that are extremely extensive and robust, an uptime that is unmatched, a large number of integrations, and great feedback from previous users. Xero won't fail to meet your expectations when it comes to the robust accounting skills it offers.