In Wave, when you create a sales tax, it will automatically generate a sales tax liability account on your chart of accounts, named after the sales tax. Each time you create a transaction with sales tax included, the amount of tax will be recorded in the sales tax liability account. You can add sales tax to invoices, expenses, bills, and income. Xero has a powerful inventory management feature that can be a useful addition for businesses that want to track services or products with Xero. You can add items, provide information about those items, and attach notes and files to them.

When you look at user reviews on Capterra, all three platforms have 4 stars (out of 5) for customer support. In addition, all three platforms have iOS and Android mobile apps. Xero’s reporting functionality, while more limited, is visually appealing and easier to use.

It is worth noting that the pricing plans for all three platforms include add-ons and extra fees on top of their base plans. For example, a $9 per month plan could end up costing you $75 per month if you add on extra features such as payroll services. Fully understanding pricing will involve more than we can cover here, because it depends on your cloud accounting and specific business needs. Each supports unlimited users, but the higher packages include advanced features, such as multicurrency support, expense claim management, and project tracking. Xero also offers payroll through Gusto at $40 per month, plus $6 per month, per employee. Wave offers the cheapest managed payroll solution for $35 monthly base fee + $4 per active employee and $4 per independent contractor.

You can use tracking categories and options in Xero to keep your chart of accounts manageable while viewing department or cost centre wise reports. It comes free as part of starter, standard, and premium plans. If a small business is looking to take on some of the accounting tasks themselves, then Xero is a cloud-based accounting software made for those small businesses. Third-party integrations ensure your accounting software can work seamlessly with all the other business management tools you may be using and ensure overall performance efficiency. As a free tool, sometimes Wave may be a bit lagging in terms of the richness of features.

On their advanced plan, they also have “smart reporting by Fathom,” which includes machine learning. The only con is that it takes some time to learn how to use their extensive reporting features. If you run an e-commerce or physical products business, you shouldn’t use Wave.

Wave accounting vs Xero mobile apps

Additionally, you can assign a default foreign currency to specific contacts to ensure that invoices, quotes, bills, and purchase orders are in the appropriate currency. The Wave payment processing feature allows users to accept credit card and ACH payments. Wave users can accept all types of payments via bank deposit, credit card, and Apple Pay. 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.

Comparing Xero and Wave’s features, prices, and integration options, the recommendation to choose one over the other will depend solely on your business needs. Xero is the better option for product-based or e-commerce small businesses. It can meet their need to manage their inventory and projects along with a comprehensive suite of bookkeeping and reporting features. On the other hand, Wave is the better option for service-based freelancers and small businesses that only need basic accounting functions at affordable rates. Although the features of Xero vs. Wave are comparable, Xero has a slight edge because of more sophisticated bookkeeping solutions. Its advanced inventory management, sales tax configuration, reporting, and payroll management features make it a more comprehensive bookkeeping solution for small businesses.

You’ll be able to keep track of the items in stock, which items are fast-selling, and even incorporate items into invoices. Wave lets you make closing entries closing procedure unlimited bank and credit card connections to track your transactions. All debit card purchases automatically will get logged and categorized.

How can Xero help run your small business?

The software works with popular payment gateways; Xero and Stripe work well together, as well as Paypal and GoCardless. Xero is superior in this category, as Wave doesn’t offer inventory management features. Wave lets you create and send professional invoices in just a few clicks.

Xero is a complete accounting solution with extensive features, such as fixed asset management. However, it has a steep learning curve and might take time to get used to for beginners. Xero may not have built-in payroll but can integrate with Gusto for your payroll needs.

1. They all hold great potential to help you out in handling your company finances and invoicing.
2. Connect Xero to apps, integrations, and financial services to make it easier to run your small business.
3. However, what it lacks in usability, it makes up for in resources where you can get help using it.
4. Send unlimited recurring invoices to as many customers as you want.
5. Make sure to list any specificities about your business that require a special feature.

In their ratings summary, we can see customers are extremely likely to recommend Wave Accounting to others, and are mostly impressed with the availability of the software. Because their list of features is rather limited in comparison to Xero, they’re ratings for product scalability and performance are a little lackluster. While Wave and Xero are solid solutions for your accounting needs, Bonsai is the right choice for freelancers. It is designed with the solo professional in mind, making sure that you receive due payments from clients quickly and accurately.

Accounting Software Program Reviews

Both tools are fantastic alternatives to cloud-based accounting software like QuickBooks Online, Zoho Books, and Freshbooks. Professional, customizable invoices that are quick and easy to create. Send invoices on-the-go using Wave’s mobile app, which automatically syncs to your accounting records so your bookkeeping is already done. Send unlimited recurring invoices to as many customers as you want. Wave recently added a paid plan, Wave Pro, which costs $16 per month if billed monthly or $170 per year if billed annually.

Mobile App: Xero Wins

They’ll automatically transfer tax payments and file the paperwork with your state tax office and the IRS. However, it is only available in California, Florida, New York, Texas, Illinois, and Washington. This is $2 more than QuickBooks’ self-service option, and you have to pay for and file the paperwork yourself.

If accepting recurring payments or setting up subscriptions is vital to your business model, you should seriously consider Wave. While QuickBooks also offers this functionality, Wave’s subscription payments https://accountingcoaching.online/ are actually more robust. They include timezone controls, flexible scheduling, automatic receipts, and custom messaging. You can even turn estimates into invoices and send them in any currency.