2014-09-16

MerchantMaverick.com updated their review of Wave Accounting in noting Update (9/13/2014): As of 9/9/2014, Wave has added a customer statements feature (click). The across the board Wave score card is strong, MerchantMaverick.com noted Wave has a large number of loyal users. You can read customer testimonials here; the software scores 4/5 stars in Google Apps Marketplace and 4/5 stars in the Chrome Web Store. The iPod apps are a hit, particularly the new invoicing app, which gets 4.5/5 stars from users. Receipts gets a solid 4/5 stars, while Payments and Payroll don’t have enough user feedback to display ratings at this point. The Android version of Receipts gets 4.2/5 stars on Google Play. The complete Wave Accounting review is below, visit MerchantMaverick.com to comment!

Katherine Miller for MerchantMaverick.com writes: Overview: In November 2010, a new player appeared on the small business accounting scene: Wave Accounting, a cloud-based program designed with the intent of making accurate small business accounting fast, simple, and – in an unusual twist – free. Serial entrepreneur Kirk Simpson teamed up with technology-developer James Lochrie to found the company; it was Simpson’s third start-up, and Lochrie brought sixteen years of small business accounting experience to the table. Both founders remain active in the company, Simpson as the CEO and Lochrie as the CTO.

In the past three years, Wave Accounting has grown rapidly. As of the last posted count, the company has 76 employees and serves 1.5 million users. In 2011, it won the People’s Choice award at the Canadian Innovation Exchange (CIX) Top 20 event in Toronto, and it followed up with a Small Business Influencer Award in 2012.

The software is continually developing; in April 2013 Wave introduced its Receipts App, allowing users to photograph and import receipts into their accounts, and in February 2014 the company launched a new bank reconciliation feature. In June, Wave launched its new Invoice App for iPhone, followed by the long-awaited customer statements feature in September. Planned developments include an API (currently in alpha), 1099 contractor support, and an invoicing app for Android; however, there are no listed timelines for these features.

Wave Accounting focuses on a very specific niche: businesses with under ten employees. The software lacks some of the features of its (paid) competitors, but it provides genuine double-entry bookkeeping and a decent feature selection in an intuitive, easy-to-use format. For many micro-businesses, it will be an option worth considering. To learn more about whether Wave might be a good accounting solution for your business, read on.

Pricing:

Wave Accounting is free. It is supported by advertising within the program (a vertical bar which occupies about 13% of the screen on the far right side).

Web-Hosted or Locally Installed:

Web-hosted. No downloads or installation required.

Hardware and Software Requirements:

Wave Accounting is compatible with Mac, Windows, and Linux operating systems. Supported browsers are IE9 (and up) and the latest versions of Firefox, Chrome, and Safari. There are no mobile versions of the full accounting software, though there are iPhone apps for Invoice, Payroll, Receipts, and Payments and an Android app for Receipts.

Specific Size of Business:

Wave Accounting is designed for independent contractors, sole proprietors, and companies with 9 employees or less. While you can give an unlimited number of users access to your account, your only options for user permissions are “view only” or “view and edit.” Every user will be able to view all information in your account.

Accounting Method:

Accrual accounting.

Ease of Use:

I found Wave’s interface and organization pretty intuitive. There are a few places it could be improved, but on the whole, it’s easy to use.

Setup - Setup is very quick; after providing some basic information about your business, you’ll be directed to a “Get Started” page with a video overview and a couple of options for where to start. After that, you’re pretty much on your own. Some areas, such as Banking, will have pointers for getting started. Setting up accounts is very intuitive, and the process for adding accounts is smoother than in much paid software.

Organization – For the most part, Wave’s organization made sense to me, and I found the software easy to navigate. There are tabs along the left of the screen for Dashboard, Transactions, Invoices, Bills, Receipts, Accounting, Reports, Payroll, and Pro Services. Additional links at the top of the screen direct you to Accept Credit Cards, Save Money, Need Help, and Account, and a gear icon at the upper right of each page directs you to Settings. Most of these are pretty self-evident. Those that may require a little explanation: Accounting contains your chart of accounts, journal entries, and a place to enter starting balances. Payroll is a plug for the paid service by Wave, and Pro Services provides you with a directory of accounting professionals in your area. Save Money will direct you to a list of all the offers currently available through the companies advertising on Wave.

Instructions and Guidance – I found that for most simple functions in Wave, I didn’t need instructions; generally the interface is pretty intuitive. When I did have questions, I was usually able to find the answer in Wave’s extensive knowledge base. As a bonus, the tone throughout the help articles maintains a nice sense of humor (for instance, one item on a sample invoice is a “Widgetizing Frobulator”).

Problems – In terms of usability and organization, Wave Accounting has a few shortcomings. However, they are clearly working to shore them up; they’ve fixed the worst of the issues I reported in my original review (12/2013), and so far each time I’ve reassessed the software, I’ve seen additional improvements.

Slow – I noticed Wave running slowly a few times in both my original and recent (03/2014) tests.

Bugs – I ran into major problems uploading receipts; turns out my second test coincided with a problem on Wave’s end which affected enough users that they posted a notification about the issue. They got it fixed by the next day. It’s hard to say how frequent these types of issues are, and this was the most severe I’ve encountered to date. Even so, I’ve yet to have a totally bug-free experience in Wave.

No Easily Viewed Balances – While you can check your balance sheet in the Reports section, I was disappointed by the fact that there’s no way to see all your accounts and balances at a glance (you can view linked account balances on your dashboard, but no cash or manually downloaded accounts). Ideally, I’d like to see accounts/balances on the Dashboard and in either the Transactions or Accounting section. (Also, I’d very much have liked a way to view transactions organized by accounts rather than all in a list together.)

Bank Feeds – Supposedly, once you’ve signed up for bank feeds, transactions will be downloaded into your account once every 3-4 days. The problem is, they’re not. I left my feed alone for over 6 weeks and it didn’t once update. There is a button to manually update – easy enough to use. But don’t rely on it happening automatically. In April, Wave upgraded their bank feeds and switched data providers; this may have resolved this issue. I’m currently testing it and will update this review once I have results.

Customer Service and Support:

Customer support is available Monday – Friday, 9am – 5pm EST. In my experience, representatives, while friendly, were slow to respond (wait times varying from 2-7 days, usually about 3) and often not particularly helpful. If you want faster support, there are 3 monthly subscription Premium Services packages available: Plus ($9/mo), Advanced ($19/mo), and Supreme ($49/3 mos). Despite the different name, Supreme is just a prepaid version of the Advanced package. Here are the support resources Wave Accounting offers:

Phone (Premium Only) – Phone support is available with an Advanced Package from Wave Premium Services.

E-mail – Contact Wave at support@waveapps.com.

Chat (Premium Only) – Chat support is available to customers with Plus or Advanced Packages from Wave Premium Services.

Online Form – Get in touch with Wave using their contact form.

Social Media – Wave generally responds to questions on their Facebook page within 1-2 days, and they maintain an active Twitter feed. They also post announcements and tips on their LinkedIn page.

Online Help Center – Wave has an extensive online support center. Their knowledge base has numerous articles and walk-throughs, and their search utility makes it easy to find what you’re looking for.

Wave University – A great place to familiarize yourself with the basics of Wave Accounting software, as well as the capabilities of Wave Payroll and each of Wave’s mobile apps. Well-written and well-organized, this is a fabulous resource for getting started.

Webinars – Wave has two past webinars listed, including a “Getting Started” webinar. Videos of both are available.

Videos – A large number of tutorial videos are available on Wave’s YouTube channel.

Community Forums – Discuss problems and solutions with other Wave users here. Includes a section for feature requests.

Negative Reviews and Complaints:

While many users are happy with Wave, it also garners some complaints. Here are some of the most frequent gripes:

Unreliable – In late 2012, Wave released an update which apparently caused several features to stop working. Coming just at the year end, it caused headaches for a lot of users, some of whom closed their accounts as a result. Some say this incident epitomizes a larger issue with Wave: that the company is not yet well-established enough to provide reliable service.

Auto-Categorization Woes – Unlike most competitors’ systems, Wave does not appear to “learn” from previously categorized transactions. So if you have a monthly payment to an electric company, same payee every month, Wave won’t apply your “Utility” categorization to subsequent payments – you’ll have to do it manually each time. Additionally, users have complained that a lot of Wave’s auto-categorizations don’t make much sense.

Customer Service – Several complaints about long response times, usually 3-4 days, but sometimes stretching into 3-4 weeks.

Not Responsive to User Requests – Several people have complained that Wave is not responsive enough to its customers’ feature requests. While Wave does have a feature request forum, some features have been popularly requested for a year or more and are still not available. Continued lack of an Android app and inability to send customers statements (rather than just individual invoices) are two of the most common complaints.

Problems with Bank Feeds – Some users complain about automatic bank feeds breaking, failing to update on schedule, or missing transactions.

Some common points of praise:

Free – This may be Wave’s strongest “selling” point. Many users praise the service as better than some paid options and marvel at the fact that it has remained free.

Ease of Use – The vast majority of Wave’s users find the interface intuitive and the program easy to use.

Saves Time – Many users find that Wave Accounting saves them time and makes organizing their finances and preparing for tax time more manageable.

Great For Micro-Businesses – While users say Wave lacks some of the higher-end capabilities of paid accounting software, many feel is provides them with everything they need for small business accounting, especially those in service-based businesses.

Integrated Personal and Business Software – Customers enjoy the convenience of business and personal accounts that can be linked and accessed with a single log-in.

Features:

Wave has a reasonably good feature selection, comparable to some of the less expensive paid programs available. Here are some of Wave Accounting’s key features (for the full list, click here):

Dashboard – Wave’s dashboard provides you with a quick overview of the status of your accounts. You’ll see overdue invoices and bills right at the top of the page; next to them, a bar chart of income and expenses. Scroll down for information on invoices and bills coming due, net income, and an expense breakdown. I would have liked to see account balances in place of the “Settings Tips” that don’t seem to disappear no matter how long you’ve been using the software, but on the whole the dashboard serves its function well.

Estimates – Estimates follow the same basic template as invoices. Strangely, you cannot manually mark estimates as sent, nor as approved. You can, however, easily convert them to invoices.

Invoicing – Invoicing features include the ability to copy invoices, set recurring invoices, and send automatic reminders when an invoice is past due. It’s easy to sort and filter invoices by status so you can see what’s paid, overdue, and sent. There is no e-mail template for the e-mail accompanying your invoice; while you can type a message, there’s no way to save it or create a default message, so you’ll have to enter it each time. If you wish to accept payments online, you can do so through Stripe. When marking an invoice as paid, you’ll have the option to send a receipt. In terms of design, there aren’t a lot of choices. You can upload your company logo and select from 3 templates.

Bank Reconciliation – Wave now supports full bank reconciliation. That means you can select any given period and check that your Wave records line up with your bank and credit card statements; just enter the ending balance from the statement in question and you’ll be able to see if there are any discrepancies. Wave offers live bank feeds, and manually uploading statements is easy, as is assigning categories to transactions and merging transactions when needed. You can also assign transaction categories in bulk, which saves some time.

The auto-categorization feature is nice in theory, but in practice it is frequently inaccurate, and the duplicate detection is not without its flaws. Any transaction you’ve categorized as a transfer will not appear as a duplicate if you accidentally import it again. Also, if you import data from different file formats at different times (e.g. csv and qbo), duplicate detection won’t work at all. Finally, while you can either view all transactions in a single list or one account at a time, there’s no way to view separate accounts simultaneously here. Note: Like all software offering live bank feeds, Wave partners with Yodlee to obtain the feeds. Yodlee may violate some banks’ T&C; consult with your bank to determine whether live bank feeds are a good choice for you.

Accounts Payable – Entering bills and recording payments is straightforward; however, you can neither set up recurring bills nor copy existing bills. Unfortunately, if you find you need to create a new expense category while entering a bill, you can’t do that here; you’ll need to go to your chart of accounts.

Reporting – Wave offers 10 reports: Balance Sheet, Account Transactions, General Ledger, Income Statement, Sales Tax Report, Income By Customer, Expense By Vender, Aged Receivables, Aged Payables, and Gain/Loss on Foreign Currency Exchange. Reports can be downloaded in Excel, csv, or pdf formats.

Receipts – You can scan and upload receipts, photograph them with your smartphone, or e-mail them to Wave. Wave will then import them using its Optical Character Recognition (OCR) system, which in my tests was about 70% accurate. Verify each receipt to confirm the amount, and it will (supposedly) automatically be attached to the appropriate existing transaction, if there is one; otherwise, it will create a new transaction. Unfortunately, the automatic matching never worked for me, but I could still merge the transactions manually.

Contacts – Wave has a fairly basic contact database. You can view a client list and a vender list, and reports allow you to view income by customer and expense by vender. However, there is no way to deactivate or archive a contact while retaining their information in the system. Also, there is no support for importing an existing contact list; the contacts must be entered manually, one by one.

Sales Tax – You can set multiple tax rates and can apply them to invoices as you wish; compound taxes are also supported (limit of one per business). You cannot, however, assign a tax rate to be the default for a specific customer; you’ll have to manually apply the tax rate each time.

Multi-Currency – If you do business internationally, multi-currency support will be a crucial feature. Exchange rates are obtained through www.xe.com and updated daily. You can invoice in any currency, and the software can handle accounts in different currencies.

Personal Accounting – Wave Accounting includes a personal accounting system; you can set up linked personal and business accounts and track transfers of money between them. Extremely useful for independent contractors and anyone who uses a single bank account for both personal and business expenses.

Integrations and Add-ons:

There are only a few integrations and add-ons available for Wave Accounting. They are as follows:

Stripe – Process credit card payments and enable clients to pay their invoices online. (Available through Wave Payments.)

Wave Payroll – Wave’s payroll processing program integrates seamlessly with its accounting software; basic payroll functionality is supported throughout the U.S., and automatic payroll tax service is available in 13 states.

PayPal – Wave can automatically import your PayPal sales and purchases.

Etsy – If you sell through Etsy, you can automatically import your sales information with this integration.

Shoeboxed – A receipt management and data entry service which facilitates paperless expense reporting.

Security:

Wave Accounting uses 256-bit SSL encryption, and its servers are housed in facilities with physical and electronic safeguards. Its protocols are certified by TrustE & Thawte, and its security is subject to third-party testing. User data is routinely backed up off-site.

For more details on Wave Accounting’s security, click here.

Final Verdict:

Wave is not the biggest nor the best small business accounting program out there … but for a free product, it’s quite impressive, and rapidly growing more so. The lack of cash-based accounting is somewhat surprising in software geared toward very small businesses, but I wouldn’t consider it a deal-breaker. My only real concern is the unreliability mentioned by several users in their reviews – and my own experiences with bugs in the software. I will say, though, that I encountered far fewer problems in March 2014 than I did in December 2013. The biggest issues have already been fixed, which is very promising.

A lot will depend on just where you are with your business and how much your time is worth to you. Wave is free, which is fantastic, and for a lot of start-ups, it may be just the ticket. However, with the reduced price tag comes reduced support, and if you find that some of the problems are costing you one or more hours a month, well, it may be time to look at some of the paid options. If Wave appeals to you, I’d suggest trying it out for yourself – after all, you can use the software for as long as you like without paying a cent.

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