Wave Accounting Software
Mac Accounting Packages
I’ve been using the same accounting software for years. In fact, I first decided to use it when it was called ‘Mind Your Own Business’ (MYOB) back in 2006. I then reluctantly upgraded it in 2011 when there was a mandatory upgrade for it to work with a new Operating System.
I say reluctantly because not only was there a cost associated with the upgrade of the software (now called AccountEdge) but there was also a £130 a year subscription cost too. I complained a little at the time and eventually managed to get a reduced price upgrade. This was a standalone version that didn’t require the annual service charge and therefore didn’t get updated with new versions either. It worked and hadn’t cost me much extra so I was fairly happy with it. It did however leave me a little discouraged. Over the years as the software became more and more dated I have been wary of OS updates breaking it. The latest versions of Mac OS X won’t run 32 bit software so it was time to look for an alternative again.
A New Alternative
Online accounting solutions such as FreshBooks, QuickBooks or Xero all look good and have all the features I need, but once again they aren’t cheap. Most start at around £15-£30 a month for the features I would need. At that price I may as well just update AccountEdge and pay the £160 service fee. I was still a little reluctant to do that after something of a sour taste from years ago, along with the fact that the software itself wasn’t very ‘Mac-like’. I needed an alternative.
Whilst searching, I came across a free alternative. It was a simple online accounting solution called Wave. Although simple, it seemed to do everything I needed as my needs are fairly simple too. Really all I need is the ability to:
- Record the sales and services I provide to my clients.
- Create invoices from these records.
- Send invoices to my clients.
- Record expenses and other outgoings.
- Bring all this together into an end of year report for tax filing.
A simple spreadsheet would be enough really but Wave offers all of the above in an easy to use format, along with some handy extras too. It was worth giving it a go and so far I’ve been quite pleased with it.
It is indeed easy to use. I’ve added the details of my clients and have recorded the work I do for them in draft invoices. I often do small tasks for clients that only take a short amount of time so I only charge small amounts for such things. No one wants to receive lots of little invoices for a few pounds here and there so I don’t send invoices until I’ve done several tasks for a client. These tasks might be months apart, so the draft invoices can sit there in draft mode for as long as I like. I can add to invoices as necessary and when I’m ready to send them I can approve them and send them off to my client. At this stage it’s just a matter of clicking the send button and the invoice will be sent to my client via email. This email can just contain a link to the invoice or (as I do) you can also attach the invoice as a pdf.
The invoices themselves are customisable to a certain extent but there aren’t many options. In fact there are only 3 options as far as layouts go, but I would have been quite happy with 2 out of the 3 so a lack of choice isn’t a huge deal.
You can set reminders on invoices as well so that reminders are sent out automatically for unpaid invoices.
My clients can then pay me in the usual way by cheque or bank transfer, the details of which are on every invoice. I could also enable online payments via credit card as well. This is one of the ways that Wave make some money. The other features are all free to use, but if you enable online payments then Wave take a small percentage of each payment. The fees are 1.4% + 20p which isn’t too bad as it enables your clients to pay easily from within the invoice email so you tend to get paid faster.
You can also set up recurring automatic payments for things such as subscription services as well. You don’t have to enable any of these payment features if you don’t want to. I probably will at some point if my clients decide it would be a useful feature and help them out when it comes to paying my invoices to them.
Products & Services
The items or services that you sale or offer can be set up in the Products & Services section of Wave. This allows you to easily add them to invoices and also keep track of the amount of income generated from particular products or services.
For a part-time freelancer like myself this isn’t essential but it is a nice additional feature. All I really need to know is now much money is coming in and how much is going out. Categorising it using my own selection of products and services does however help me break this down and see where exactly where money is coming from and going to.
As well as keeping track of the products and services that you offer in the Sales section, you can also keep track of the various products and services that you buy in the ‘Purchases’ section of Wave in exactly the same way. Talking of the purchases that you make, these are recorded as expenses.
Expenses and Receipts
Recording expenses is simple as well. Just add the items you buy to the Purchases section of Wave. These can be recorded as Bills or Receipts. Bills are added manually whereas Receipts can be uploaded and processed automatically. The processing of receipts seems to work really well. You can either:
- Upload a receipt direct from your computer within the Wave Receipts section of your account
- Snap a photo of the receipt using the Wave Receipts app on your phone
- Email a receipt
Once you’ve done this the receipt is processed and added to the receipts section of your account so that the amount, vendor and other details are automatically recorded. You then get an email to approve the receipt.
Wave also allows you to connect to bank accounts so that transactions can be automatically entered directly from your bank and then reconciled. You can add as many different bank accounts and credit cards as you like and see a list of your accounts in the Accounting section. I don’t use this feature as I don’t have a dedicated business account and don’t want my personal transaction showing up in my business accounts. The Accounting section does however also have Income and Expense accounts. The sales and services you offer can be categorised into specific income accounts, and the bills and receipts can be categorised into specific expense accounts so that you can keep a detailed eye on your income and expenditure.
Now that Wave has a record of all the invoices you have sent and those that have been paid, along with the details of all of the bills you have paid or items you have purchased, it can of course compile reports for you. Everytime you login into Wave your dashboard gives you a quick overview of :
- your cash flow,
- profit and loss,
- the amounts of money payable to you or that you owe,
- your net income for the current and previous year.,
- a nice breakdown of your expenses.
You can drill down further into this information in the Reports section of your account to see a number of configurable reports.
The basic Profit & Loss report would be enough for my needs when it comes to to file my taxes each year, but being able to see detailed breakdowns of profit and loss is nice. The other reports are all handy too and will be used by me from time to time.
So far, Wave seems to do all that I need and quite a bit more without being overly complicated. If I don’t turn on the online payments then it does so for free as well which is always a bonus. Even if I do pay the transaction fee for online payments then I’m only paying a fee when I actually get paid myself. This is preferable to paying a monthly fee for something that I might not use all the time. There could be months where I have no work on and don’t therefore get paid. I wouldn’t really want to be paying for the privilege of an accounting system when I’m not actually earning anything.
There are other features of Wave that I’ve yet to explore fully and probably won’t use. The first of these is ‘Integrations’ which allows you to connect your Wave account with lots of other online accounts such as PayPal, Etsy, Shopify, Mailchimp, Slack and many other services.
Another is Wave Plus which, for a fee, connects you with accounting consultants.
Using Cloud Accounting
There are of course some worries when using Cloud accounting. These revolve around security and privacy. Wave obviously have this covered and state that:
Our servers are protected physically and electronically. Any connection between you and Wave is protected by 256-bit SSL encryption. Wave is a PCI-DSS Level 1 Service Provider.
You are of course sharing private, financial data with them and if connecting bank accounts and other accounts using Integrations there are always going to be some privacy concerns too. If you want to use such a service you do have to be willing to add such information to it.
More of a worry for me is the reliability. I don’t really like trusting such data to an online ‘cloud’ service. I have no guarantees that Wave will be a success or how long it will be around for. Such businesses do come and go so I like to make sure I have a local copy of my data as well. It wouldn’t be much good if come tax return time I logged into Wave to get my reports only to find it no longer existed. Wave does of course allow you to Export your data as csv files for review in Excel or other spreadsheet software. It also allows you export Reports as either a PDF file or a csv file. It would be nice if you could set up an auto-export for these reports and data. I have submitted this as a feature request so it might get added in the future. Until then I shall have to try to remember to download these reports myself on a regular basis until I’m more comfortable with the longevity of Wave.
So far so good and it has almost made keeping my accounts enjoyable again. I have been setting up some automation that integrates Wave, Mail and Calendar on my computer too. This uses Folder Actions, Mail Rules, Automator and AppleScript so I’ll post about that soon as well (bet you can’t wait!).