QuickBooks vs Xero vs. Wave: Compare Bookkeeping Services

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 does surepayroll integrate with quickbooks liability account. 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.

  1. Both receive the same star rating, but that doesn’t mean they have the same strong points.
  2. Most accountants, bookkeepers, and financial advisors are familiar with QuickBooks.
  3. Wave’s Starter and Pro plans are affordable ways to set up invoicing and accounting solutions for your business.
  4. For one, they are the only one out of the three that supports accrual accounting.

Xero’s integrations make it possible for international business owners to track payments without re-entering financial data every time they run payroll. FreshBooks’ Lite plan falls short for reasons aside from its billable client limit. It’s also missing basics like double-entry accounting reports (i.e., a chart of accounts and general ledger), accountant access and bank reconciliation tools.

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More specifically, Xero integrates with 800+ business tools, while Wave’s integration options are more limited. Wave is built for beginners, while Xero requires some previous experience with accounting software. Both tools are fantastic alternatives to cloud-based accounting software like QuickBooks Online, Zoho Books, and Freshbooks. The banking section of this case study focuses on cash management, bank reconciliation, and bank feed connections. The software must have bank integrations to automatically feed bank or card transactions. The bank reconciliation module must also let users reconcile accounts with or without bank feeds for optimal ease of use.

Invoicing is easy, there are more than 50 accounting and financial reports, and you have the ability to track and manage inventory. Wave’s payroll feature streamlines the process of running payroll and paying your employees and contractors. With just one click, you can deposit payments into the bank accounts of your employees using the software.

Pilot is a provider of back-office services, including bookkeeping, controller services, and CFO services. Pilot is not a public accounting firm and does not provide services that would require a license to practice public accountancy. For one, they are the only one out of the three that supports accrual accounting.

Xero & Wave Price Comparison

But as your business grows, you could wind up paying a lot more in payment processing fees than a subscription plan on Xero or QuickBooks Online. Time-saving features like scheduled payment reminders and automatic credit card payments. Connects seamlessly with Wave’s invoicing and accounting software, so you’ll always have the information you need in one place. Wave doesn’t offer third-party app integrations, but FreshBooks has over 100.

Our bookkeeping services complement these platforms, ensuring that your transactions are accurately classified, and your financial statements are prepared with precision. By leveraging our expertise, you can navigate the complexities of financial management with confidence. Xero pricing runs from $11 per month to $62 per month, which is incredibly affordable for the features and power that you get in return.

Inventory: Xero Wins

If you want the most robust and customizable reports, QuickBooks is hands down the best option of the three. You can create vendor, project, and class reports, set up custom reports, and even see visual business insights and performance trends. 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.

For subsequent use, it’s easy to use the solution, and we think it’ll take less than a week for new users to understand the basics of the software. All FreshBooks plans, except for the highest-tier custom plan, come with one user. FreshBooks gives you six user roles to choose from, plus client access and project manager customization options. Wave’s receipt management feature is more basic and only allows you to upload receipts manually. While Wave does offer Wave+ — with their own in-house bookkeepers and accountants — it is the least flexible solution. You’ll likely outgrow it as soon as you start hiring more than a couple of employees, as their feature set and reporting capabilities are the most limited.

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). The Growing monthly plan stands at $37/month and includes everything from the Early plan, plus unlimited invoices and bills and reconciling bank transactions in bulk.

When it comes to accounting and financial statement preparation, Xero has a clear advantage over Wave. The software’s comprehensive features and tools allow for precise transaction categorization and the creation of detailed financial statements. This is especially valuable for businesses that need to present a clear financial picture to stakeholders, investors, or regulatory bodies. Wave Money, the business banking feature offered by Wave, is a bank account with built-in bookkeeping. There are no monthly fees or minimum balances, and it’s FDIC insured.

Eric is an accounting and bookkeeping expert for Fit Small Business. He has a CPA license in the Philippines and a BS in Accountancy graduate at Silliman University. We went to user review websites to read first-hand reviews from actual software users.

Accounting software significantly reduces the risk of human errors, ensuring that your financial records are reliable and error-free. In the world of modern business, efficient bookkeeping and accurate financial reporting are paramount. Katelyn is a Junior Research Analyst at SoftwarePundit, where she conducts in-depth analyses of technology markets & products and writes software-related content. She graduated summa cum laude with degrees in English and Psychology.

Our partners cannot pay us to guarantee favorable reviews of their products or services. You can  view and reconcile your payroll transactions and easily access Gusto from the Gusto payroll tab in Xero. You’ll also be able to give your employees online access to their pay information. Today’s leading accounting platforms offer standard security features like data encryption, secure credential tokenization and more.

You’ll be able to reconcile your accounts, set up automatic payments, and track your invoices. This takes into account customer management, revenue recognition, invoice management, and collections. In Xero’s invoicing, you can set sales prices, create customers, email invoices, accept short payments, and manage customer accounts in Xero. Functionality-wise, Xero’s invoicing is great—except that it doesn’t enable users to customize the aesthetics, such as colors, of the invoice. Wave takes the lead in pricing because it’s free for accounting and invoicing. Moreover, transaction fees for payments are lower and are a part of its ecosystem.

The Wave dashboard, as you can see, offers crucial graphs and information regarding payments. You can not only see your overdue invoices and bills, but add customers, vendors, send invoices, https://quickbooks-payroll.org/ and more. Xero enables you to monitor expenses, categorize them, turn them into invoices, and bill your clients. Wave lets you create and send professional invoices in just a few clicks.

Wave is more of an entry-level solution that can scale relatively well as your business grows. Because the inventory management is somewhat lacking, it’s not the best option for product-based businesses. It’s one of the most user-friendly and modern platforms on the market, making it ideal for those who are just starting out with accounting software. A popular online accounting app designed to meet the needs of small and medium businesses in any industry. One of the most user-friendly accounting solutions available today, Xero features real-time tracking of accounts receivable, expenses, billing, and invoicing. Wave is the best accounting software for freelancers and small service-based businesses.