By Amy Boyington
Without an organized accounting system that tracks income, expenses, and invoices, it can be easy for a freelancer to end up with inaccurate reports of their business, leaving an overwhelming mess come tax season.
Enter Wave, a suite of free accounting tools that's ideal for freelancers and small businesses.
Wave has been my go-to accounting app over the past two years of my freelance writing business. I've yet to find any similar software that's as comprehensive when it comes to tracking my income and expenses, yet remains free for regular users like myself.
What is Wave?
I personally use Wave for tracking my business income and any expenses I have, like fees and software, to run my business. However, Wave is for so much more than just that; it's also a receipt organizer, payroll manager, invoicing system, and more.
Whether you're a part-time freelancer or your work is your full-time business, Wave can help you track the financial aspects of freelancing so that you can focus more on your projects—and it's 100% free to use the basics.
- Free for accounting, invoicing, and receipts
- Additional fees for payroll and payment processing
Wave's Suite of Accounting Tools
Wave offers users several accounting tools to help you manage every financial piece of your business, ranging from detailed income reporting to filing expense receipts, and keeping track of what you pay other freelancers.
I'll dive into Wave's main features, and give an overview of how they can help your business.
Income and Expense Tracking
Financial tracking on Wave is, in my opinion, its best feature. Wave gives me a comprehensive look at my money coming in and going out of my business bank account and keeps everything tidy so it's easier to get taxes situated when it's time to file. I use Wave in conjunction with AND CO for this just because I like an extra layer of tracking to ensure all my information is correct, but honestly, Wave can handle itself just fine in this area.
Wave works with almost any bank or financial institution—even PayPal. This is what you'll see when you're ready to connect an account:
Once you've verified your account's information, Wave will start pulling in every transaction to store in your reports. You can customize anything that seems a bit off and sort transactions into categories like utilities, business supplies, and income.
If you need to get more detailed about your accounting eventually, Wave will let you bring contributors on board to help you get your finances under control.
Invoicing and Payments
Getting paid by clients can be one of the biggest challenges that freelancers face, but Wave simplifies the process by helping you create aesthetically-pleasing, yet simple, invoices to send along to clients. You can customize each invoice using your brand's primary color and logo, as you can see in the example screenshot below:
Add as many line items as you need to and preview the invoice before you hit send. Wave also gives you the option to view the invoice as it would look on a mobile device. You can connect to payment processors like PayPal or Stripe or use Wave's own Payments by Waves service to get paid by credit card or bank account.
Wave offers recurring invoice setup, too, so you can get automatically paid by clients who've ordered a subscription of your services. You'll pick the schedule so that it coincides with the agreement you've made between your client and yourself.
Receipt Scanning and Storage
Hanging onto every receipt you have to keep for the taxman can be a chore. There's also always a risk that you'll lose your pile of receipts, making them unclaimable when you're ready to file. You don't want to lose out on deducting those expenses from your taxes, which is why Wave's receipt scanning feature is one you'll never want to be without if you have a lot of costs in a typical year.
Wave lets you upload photos of receipts through the platform. You can also snap a picture using the iOS or Android app. Even more convenient is the ability to forward receipts to Wave via email, which is perfect for electronic receipts for anything you bought online or had emailed to you after your purchase.
The app then lets you know when your receipt is ready for you to review—this is where you can make sure it scanned accurately, and categorize it before storing it with your expenses.
Do you currently, or plan to, hire other freelancers as part of your business? Wave's payroll management features make it a painless process for any freelancer who wants to expand their business and grow their team.
Take note that managing payroll through Wave will fall into a paid plan rather than the free one, but it's also relatively affordable compared to similar management systems. For $20 per month plus $4 for each independent contractor on your payroll, you can have Wave generate 1099s, pay your contractors, file state and federal tax forms, and also set your contractors up with their own account to view their pay.
Wave will also automatically connect your team's payments to your Wave account and track them as expenses for your business.
In terms of reporting, Wave is lightyears ahead of similar services I've used. There's definitely no one-size-fits-all approach when it comes to freelance income reporting. The type of reports you need to access depends on your business and your personal situation, which is why I love the many options for reports that Wave has. Here's a screenshot of just a few reports you can choose from:
You'll notice that you can get as general or as detailed as you want with your reports, from the large-scale profit and loss statement to the narrower income separated by clients. You can also look at reports of unpaid invoices, balance reports of all accounts you have hooked up to Wave, and business purchases separated by each vendor you've used.
There are probably reports on Wave that you'll never use, but it's fantastic knowing that they're there if you need them.
How Wave Stands Up to the Competition
I have yet to find an all-in-one financial tool as comprehensive as Wave that's also free for freelancers to use. Sure, you can probably find a similar service that you have to pay for every month, but if you can cut one cost and still have those tools available to you, why wouldn't you do it?
The accuracy of Wave when it comes to tracking income and expenses is invaluable. The process is virtually automated, leaving most of the accounting for your business off your hands. You might need to go in once in a while to make sure your transactions are going into the right categories, but I've found, overall, that Wave does an excellent job figuring out things for itself.
With Wave's free account, you don't have to pay anything for accounting, receipt scanning and storage, or invoicing. The only fees you'll have are linked to your payments through Wave, which you can learn more about here (these fees are similar to using PayPal). Otherwise, you'll only need to pay monthly for payroll services or for personalized accounting with Wave+, unlike competitors that limit the features you get with a free, basic account.
Is Wave the Right Accounting Software for You?
Wave is my #1 recommendation for freelance accounting. There aren't many online tools that offer as many features and excellent reporting as Wave, not to mention that you'll need to pay for most of them. Since there's no fee to get started with, or continue using, Wave, you won't lose anything by trying it. I suggest sticking with it for a month or so to see how it does tracking your financial information to decide whether it's the right tool for you.
Amy Boyington is a freelance writer and blog manager for lifestyle entrepreneurs and businesses. After working a few unfulfilling 9 to 5 jobs, she took it upon herself to create a career path that meshed with her family life. She now works with clients all over the world in a flexible freelance career that helps her be both a businesswoman and mom to her two children.