FreshBooks vs. Wave: Which Is Right for Your Business?

FreshBooks vs. Wave: An Overview

Every business should invest in business accounting software. The question is, which accounting software is right for your business? The answer depends on a variety of factors, including the nature of your business, your budget, and the features you need. 

If you’ve already done some research, two options that you’re likely considering are FreshBooks and Wave.

And you should! These are two of the most reputable accounting software options on the market today. While there are some similarities between the two products, each also offers its own unique benefits. For this reason, some business owners will be better off with FreshBooks, while others will find Wave more suitable.

Which category do you fall under? This FreshBooks vs. Wave comparison guide is here to help you answer that question. We’ll give you the lowdown on each product, then do a side-by-side comparison so you can understand which accounting software will better help you achieve your business goals.

Let’s get started.

FreshBooks Overview

Wave Overview

FreshBooks vs. Wave: Similarities

FreshBooks vs. Wave: Differences

Which One Is Right for You?

FreshBooks: What You Need to Know

FreshBooks is a web-based platform, meaning you can access it anywhere you have internet access. There is also an intuitive FreshBooks mobile app for iOS and Android, perfect for managing your books on the go.

To use FreshBooks, you’ll have to sign up for one of their three monthly subscription plans. Depending on which plan you sign up for, here are the features you’ll gain access to:

  • A general ledger
  • Profit and loss statements, income statements, balance sheets
  • Customizable invoicing
  • Receipt capture
  • Connection/imports from your business bank account
  • The ability to accept credit card and ACH transfers online
  • Foreign currency payments
  • A dashboard that provides an overview of your account
  • Tracker for managing expenses
  • Cost estimates
  • The ability to track employee hours worked
  • The ability to set up budgets for different projects
  • Automated reports and insights on your business finances 
  • Phone and email customer support
  • Third-party access for your accountant
  • Secure data storage with an SSL encryption
  • Over 200 third-party software integrations

FreshBooks Pricing

Now that you’re familiar with everything FreshBooks can do, let’s see how much that functionality will cost you.

As previously mentioned, FreshBooks has three different subscription plans. Depending on the subscription plan you choose, you’ll have access to some or all of the features mentioned above.

Here are your FreshBooks subscription options:

FreshBooks Lite

FreshBooks Lite is designed for very small businesses, meaning it has the fewest amount of features. When you sign up, you’ll get invoicing, expense entries, time tracking, cost estimates, online credit card and ACH payments, bank reconciliation, automated reports, and unlimited third-party integrations.

The cost you will incur to use FreshBooks Lite is $15 per month. If you sign up for one year, your monthly cost will decrease to $13.50. Note that accepting credit card payments through FreshBooks costs you a 2.9% + $0.30 transaction fee. There is also a 1% fee on bank transfers.

FreshBooks Plus

FreshBooks Plus is a better option for your more established small businesses. It comes with everything you get in the Lite plan, plus unlimited project proposals, automated recurring invoices, double-entry accounting reports, scheduled late fees, automated late payment reminders, and client retainers.

FreshBooks Plus costs $25 per month, or $22.50 if you subscribe to the annual plan. The credit card transaction fees and bank transfer fees remain the same. With the Plus plan, you can also sign up for FreshBooks Advanced Payments, which gives you access to a virtual terminal. This add-on costs $20 per month.

FreshBooks Premium

The most sophisticated FreshBooks subscription plan is the Premium plan. This service comes with all of the aforementioned features—plus the ability to accommodate up to 500 clients. You’ll pay $50 per month to use FreshBooks Premium, or $45 if you opt for the annual plan. This plan comes with the same credit card transaction and bank transfer fees as the Plus plan, as well as the $20 fee for Advanced Payments.

Start FreshBooks 30-Day Free Trial

Wave: What You Need to Know

We won’t bury the lede—Wave is an entirely free accounting software. This makes it a perfect fit for new businesses that don’t need complex functionality from the get-go. If you do need more functionality, Wave also has paid add-ons.

Here’s everything you get with this web-based software:

  • A general ledger
  • Bank and credit card connections
  • Income and expensive tracking
  • Customizable invoices
  • Guest collaborators
  • Customizable sales taxes
  • Journal transactions
  • Foreign currency payments with automatic exchange rate calculations
  • Profit and loss statements, sales tax reports, cash flow reports
  • Integrations with PayPal, Shoeboxed, and Etsy
  • Bill and invoice reminders
  • Dashboards for cash balances and invoice status
  • Customizable expense and income categories
  • Searchable transaction descriptions
  • Double-entry software
  • Multi-business accounts
  • Photo receipt tracking 
  • SSL encryption and data backup
  • Email customer support

On top of these free features, Wave offers these services for an additional fee:

  • Payments by Wave: Accept credit card, ACH, and virtual terminal payments. Transaction fees start at 1%.
  • Payroll by Wave: Wave’s payroll service is available to businesses located in California, Florida, New York, Illinois, and Washington. With Payroll by Wave, you can administer payroll to your employees and Wave will handle your payroll taxes. This service costs $35 plus $4 per employee per month. If you’re not located in the aforementioned states, you can use Payroll by Wave for $20 plus $4 per employee per month, but Wave will not be able to administer your payroll taxes.

FreshBooks vs. Wave Comparison

Now that you understand what each accounting software is capable of, let’s begin our comparison. We’ll start by listing where FreshBooks and Wave overlap.

FreshBooks vs. Wave: Similarities

Both FreshBooks and Wave are web-based platforms with their own mobile apps, meaning you can access your books anywhere you have an internet connection. With both services, you can connect your business bank account and credit card, generate essential accounting documents, track expenses, accept payments (including foreign currency payments) connect with third-party software, invite guest collaborators to access your books, and manage multiple businesses on the same account.

FreshBooks Wave
Price
Starting at $15/month
Free
Users
One
Unlimited
Connect With Business Bank/Credit Card?
Yes
Yes
Invoicing?
Yes
Yes
Payments Cost
2.9% + $0.30 per transaction
Starting at 1% for ACH payments
Receipt Capture
Yes
Yes
Financial Statements
P&L, income statement, balance sheet, sales tax summary, expense report, AR aging, cost of goods sold
P&L, income statement, balance sheet, sales tax summary, expense report
Administer Payroll?
No
Yes (paid add-on)
Customer service
Phone and email
Email only
Integrations
Over 200
3

FreshBooks vs. Wave: Differences

Now that we have an overview of how these two accounting software platforms are alike, let’s take a closer look at some specific features to see how they differ so you can decide which is best for your business.

Accounting Tools

When you sign up for either FreshBooks or Wave, you’ll be able to set up your account by importing your banking and credit card info. Once that information is imported, both FreshBooks and Wave will set up your general ledger.

FreshBooks’ accounting tools are a little bit more advanced than what you get with Wave. Some features that come with FreshBooks that you can’t find within Wave include summaries of overdue invoices, a chart of accounts, project budgeting, and the ability to track cost of goods sold. FreshBooks also comes with a considerably higher amount of integrations than Wave. 

Both accounting software platforms allow you to grant access to third parties. But Wave will grant access to an unlimited number of users. With FreshBooks, you have to pay for additional users. 

For newbies, Wave’s accounting dashboard will likely be easier to use, thanks to features like searchable transactions and customizable expense and income categories. For those who are more advanced with managing business finances, FreshBooks will have more of the features they need.

Invoicing

FreshBooks includes invoicing as a built-in feature, whereas Wave provides it as a free add-on. Both services provide you with an unlimited number of customizable invoices to match your business’s branding. You can also accept payments in any currency, send payment reminders, arrange recurring payments, create estimates, calculate sales tax, and send receipts.

But again, this is an area where you get even more functionality with FreshBooks. Additional tools for invoicing with FreshBooks include the option to set up an automatic late fee, track time to pay, add discounts to invoices, invoice in multiple languages, and send retainers.

Payments

FreshBooks and Wave both provide the ability to accept ACH, credit card, and virtual terminal payments. With FreshBooks, you’ll have to pay a 2.9% + $0.30 fee for this feature, plus an additional $20 per month for virtual terminal payments. Wave’s per-transaction fees are 1% for ACH transfers and 2.9% + $0.30 per transaction for Visa, Mastercard, and Discover cards. For American Express cards, on the other hand, you’ll pay 3.4% + $0.30 per transaction. 

This being said, FreshBooks users have the option to use FreshBooks or Stripe as their payment processor. Wave recommends using their own payment service, but you also have the option to use Stripe (or another payment processor connected through Zapier) to process payments. With FreshBooks, you can also accept Apple Pay, and both services will deposit the money into your bank account within two business days.

Spend Management

An area where FreshBooks far outperforms Wave is spend management. Wave speaks to this need with their receipts tool. The Receipts by Wave app will allow you to take pictures of your receipts via your mobile device and upload them to your accounting software. You can then attach them to expenses and record them in your Wave account.

FreshBooks also offers this feature through their mobile app—plus a lot more. In your FreshBooks account, you can review your spend by category, create project estimates factoring in scope, timeline, and deliverables, convert estimates to invoices, invite employees, contractors, and clients to collaborate on projects in FreshBooks, and upload documents to FreshBooks for file sharing and accessibility.

All of these tools make FreshBooks a more powerful option for seeing where your money is going and making smarter financial decisions.

Documentation

With FreshBooks and Wave, you can generate most of the essential accounting documents you need, including profit and loss statements, income statements, balance sheets, sales tax summaries, and expense reports. 

Additional documents you can create with FreshBooks include your accounts aging report, payments collected report, and invoice details reports.

Payroll

Payroll isn’t a required feature in an accounting software, but it’s nice that Wave offers it. If you want to administer payroll with FreshBooks, you’ll have to integrate with Gusto.

Keep in mind that Payroll by Wave is not a free service—you’ll have to pay at least $20 plus $4 per employee per month.

Price

Lastly, let’s touch on price. Wave is the clear-cut better option here because it’s completely free. However, that lack of price comes with a different kind of cost: Wave has less features for managing your books. 

Still, there aren’t many free accounting options available on the open market, so Wave certainly stands out in that regard.

Should I Use FreshBooks for My Small Business?

Now that you understand the similarities and differences between FreshBooks and Wave, let’s try and determine which is better for your business needs.

Overall, we recommend FreshBooks for businesses that are established and have more complex accounting needs. We feel FreshBooks really offers the complete package in terms of feature set, providing you the ability to seamlessly manage your books—which is why you get accounting software in the first place.

The FreshBooks interface itself is also fairly intuitive, flexible, and user-friendly—even on mobile. It’s quick and easy to get started using FreshBooks, and customer support is just a phone call away.

Keep in mind the price tag when deciding whether or not to use FreshBooks. The cost isn’t outlandish, but FreshBooks does charge extra for adding additional users to your account.

Start FreshBooks 30-Day Free Trial

Should I Use Wave?

Wave is a more suitable option if you’re a new business and your accounting needs aren’t extensive. Almost all of the functionality you get with Wave is less comprehensive than what FreshBooks provides. For instance, there are far fewer tax administration tools, which could cause you headaches down the road. You also don’t get advanced accounting tools, like budgeting and vendor management.

However, not every business owner needs all of those tools, which is why Wave is such a quality option.

Another unique function of Wave is that you are able to customize your solution. This allows business owners to stick with Wave even as their needs evolve over time. Invoicing and receipt capture don’t come standard, but they are free to add. Payments and payroll can be added for an additional cost.

Like FreshBooks, Wave is also incredibly easy to use. This is advantageous for the rookie business owner.

Choosing Between FreshBooks and Wave

You should now have all the information you need to make an educated decision when it comes to FreshBooks vs. Wave.

Overall, there is no objective right answer when choosing between these two products. You need to think about the tools you need, what your budget looks like, and what capabilities matter most to you.

As we mentioned, FreshBooks is the more advanced software of the two, but Wave is the more accessible. If you still need more insight before making your decision, why not sign up for a free trial? Both FreshBooks and Wave allow you to test their software risk-free for 30 days.

Get some firsthand experience with each accounting software and make the choice that makes sense for your business.

Matthew Speiser
Contributor at Fundera

Matthew Speiser

Matthew Speiser is a former staff writer at Fundera.

He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Prior to Fundera, Matthew was an editorial lead at Google and an intern reporter at Business Insider. Matthew was also a co-author for Startup Guide—a series of guidebooks designed to assist entrepreneurs in different cities around the world.

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