Introduction
As a small business owner, managing finances can be a challenging task. However, with the right accounting software, it can be a seamless process. In this post, we will compare two popular accounting software: Wave Accounting and Xero.
It's important to note that both Wave Accounting and Xero offer excellent features for small businesses to manage their finances. However, each software has its unique approach in terms of features, pricing, and ease of use.
Wave Accounting
Wave Accounting was established in 2010 and has grown in popularity in recent years. It's an accounting software that's designed explicitly for small business owners. Wave Accounting offers a broad range of features, including invoicing, expense tracking, receipt scanning, and accounting reports.
Pricing
Wave Accounting is free to use and doesn't charge a monthly fee. However, you will still have to pay transaction fees for certain features, such as credit card processing, payroll, and bank payments. Here's a breakdown of the pricing:
- Credit card processing fee: 2.9% + 30 cents per transaction
- Payroll fee: $20 per month
- Bank payment fee: 1% per transaction
Features
Wave Accounting has a range of features that make it an excellent option for small business owners. Some of the most noteworthy features include:
- Invoicing
- Expense tracking
- Receipt scanning
- Accounting reports
- Bank connections
- Payroll
Xero
Xero is an accounting software that was established in 2006 in New Zealand. The software is designed to help small businesses manage their finances efficiently. Xero offers a variety of features, including invoicing, expense tracking, bank reconciliation, and payroll.
Pricing
Xero offers three pricing packages: Early, Growing, and Established. Here's a breakdown of the pricing:
- Early: $11 per month
- Growing: $32 per month
- Established: $62 per month
Xero doesn't charge any transaction fees. All features are included in the pricing package.
Features
Xero offers a range of features that make it an excellent option for small business owners. Some of the most noteworthy features include:
- Invoicing
- Expense tracking
- Bank reconciliation
- Payroll
- Inventory
- Purchase orders
Analyzing the Differences
Both Wave Accounting and Xero are excellent accounting software options. However, there are noticeable differences between the two. Here's a breakdown of the differences between Wave Accounting and Xero:
Pricing
Wave Accounting is free to use, which can be an attractive feature for small business owners on a budget. However, Wave Accounting charges transaction fees for certain features, which can add up to a significant expense over time.
Xero doesn't charge transaction fees and offers a choice of pricing packages, which can be an attractive option for small business owners who want to customize their software experience.
Features
Wave Accounting offers a broad range of features, including receipt scanning, accounting reports, and bank connections. However, it doesn't offer inventory or purchase orders.
Xero offers a range of features, including inventory and purchase orders. However, it doesn't offer receipt scanning or bank connections.
Conclusion
Both Wave Accounting and Xero are excellent accounting software options for small businesses. Wave Accounting is a free option that charges transaction fees for certain features, while Xero is a more customizable option with three pricing packages and no transaction fees. Ultimately, the choice between the two comes down to personal preference and the specific needs of your business.