Xero VS Wave: 2024 Comparison

Xero VS Wave: At A Glance

On the surface, Xero and Wave seem to be quite similar. Both have received a solid number of rave reviews across the internet, making it difficult to decide which is truly the better software. But once you dig a little deeper, you’ll see that there are some very distinct differences between Xero and Wave.

Xero is a robust accounting solution that rivals QuickBooks in terms of capability and popularity. It offers strong accounting, 800+ integrations, access for unlimited users, and an impressive feature selection.

Although Xero says it makes “small business” software, the steep pricing and depth of features are much more suitable for mid-to-large-sized businesses.

Wave, on the other hand, is designed with small businesses in mind. The software is easy to use and boasts standard features such as invoicing, contact management, and personal and business expense tracking.

Best of all is the pricing. Wave offers a forever-free plan with no strings attached, making it a great choice for budget-conscious small business owners.

It’s also possible that neither option fits the bill. If that’s the case, we invite you to check out our picks for best accounting software for small businesses to see other top choices that may be better for your small business.

Where Xero Wins

As far as accounting features go, few software options can compare to Xero. Regardless of which plan you choose, all users get access to inventory management, accounts payable, and other accounting features. Xero’s well-developed contact management feature is especially worth checking out.

Xero also offers 55+ reports, which far exceeds the 12 offered by Wave. Xero also outperforms Wave in terms of its integrations, with over 1,000 available for download in the Xero app store.

Xero also has a stellar reputation within the industry for its security. The company uses data encryption and two-step authentication and performs regular security audits. It also boasts an uptime of 99.97%.

Finally, Xero has strong mobile apps that are perfect for on-the-go accounting, in contrast to other accounting apps that only offer limited features. Xero has received thousands of positive reviews for its apps for both iOS and Android devices.

Here’s a brief summary of where Xero stands out:

Where Xero Falls Short

One area where Wave has an advantage is with pricing. While Xero offers a $15/month Early plan, there are limitations that make this plan only suitable for microbusinesses and freelancers — only five bills and 20 invoices can be sent per month and many features are unavailable.

To get the most out of Xero, we recommend upgrading to Xero’s Growing or Established plans, both of which are significantly more expensive than Wave.

Another expense to keep in mind is that while Xero supports multiple businesses under one account, each business will be charged a separate monthly subscription fee. This could add up quickly for users who want to balance the books for multiple businesses.

If you want a built-in payroll, you’re out of luck, although Xero integrates directly with Gusto. There’s also no built-in payment processing, although third-party options like Stripe, Square, and Payroll are supported. You also won’t find live bookkeeping services with Xero like you would with other accounting software options like Wave or QuickBooks Online.

Finally, Xero has a semi-steep learning curve. While it isn’t too difficult to master, users with no accounting experience will need to devote some time to getting the hang of using this software.

In summary, here is where Xero falls short when compared with Wave:

Where Wave Wins

Wave has a lot going for it, starting with its inexpensive pricing. Most free accounting software we’ve tested in the past has limited features, outdated interfaces, or is riddled with spam and ads. Wave’s free accounting software is user-friendly and is loaded with standard accounting features. This low cost and a good set of features make it suitable for smaller businesses.

We also like that Wave has built-in payroll, Wave Payments processing, and even professional bookkeeping services (all available for an additional fee). This is ideal for businesses that want everything in one place without having to worry about integrations.

Another area where Wave shines is that it supports multiple businesses at no additional cost. You can add up to 15 businesses to a single Wave account — no additional monthly fees required. Unlimited users are also supported with different permission levels available (permission levels can’t be customized).

Wave is also easy to use, making it a great choice for accounting beginners. The software is easy to navigate, and there are plenty of support resources available to help you make the most of the software.

Here’s how Wave stands apart:

Where Wave Falls Short

One of the areas where Wave falls a bit short is in terms of its features. While it does offer a well-rounded set of features, especially at this low price point, it doesn’t include everything you’d find with bigger competitors like Xero.

Wave also lags when it comes to reports, offering just 12. It is worth mentioning that these reports do cover the financial basics, but you won’t find advanced reporting here.

Another area where Wave falls behind is with its number of integrations. Wave only has four integrations — far less than most of the options we’ve reviewed at Merchant Maverick — but one of those is a Zapier integration which connects to 1,000+ add-ons.

Finally, while Wave does have mobile apps, these apps are limited when compared to the actual cloud-based software. There are also several complaints from users of the free plan about bugs within the app since Wave added its paid Pro plan.

Here’s a wrap-up of where Wave could use some improvement:

Xero VS Wave: Pricing Comparison

Xero VS Wave: Features Comparison

Which Is Best For My Business: Xero Or Wave?

Both Xero and Wave are strong accounting options, although each better serves a different type of user.

Xero has strong accounting features you won’t find with Wave, like inventory management and project management. This more advanced software does come at a price, though — it is more expensive than Wave and also has a learning curve that may take some time to master.

Xero’s integrations set it apart from its competitors, allowing you to connect your software with other apps and software your business already uses. It also has plenty of reports to track your financials, and we can’t forget to mention its great security features.

While Xero may be a bit much for small businesses in terms of pricing, features, and ease of use, it’s an excellent solution for medium to large businesses or any business that wants a scalable software option.

Smaller businesses that don’t need advanced features and want software that’s easy to use from the start won’t be disappointed by what Wave has to offer. Its feature set offers more than enough for businesses with basic accounting needs, and the UI is beautifully designed and easy to navigate.

But perhaps what is most appealing about Wave is that its available at no cost. While you may have to pay a modest monthly fee for some automations, the free plan is pretty solid — even supporting multiple businesses and users.

Choose Xero If …

Choose Wave If …

If you’re still undecided, the good news is that you can test out both options for free. 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.