Wave vs Xero

What Wave is

Wave offers free accounting and invoicing for very small businesses, making money on payments and payroll instead. For a sole trader or a very small firm the free ledger and invoicing genuinely cover the job. It stops being enough once you need inventory, multi-currency or an accountant working in the file alongside you.

What Xero is

Xero is cloud accounting for small business, covering bank reconciliation, invoicing, payroll in some regions and reporting for your accountant. Bank reconciliation is where it is genuinely strong, and accountants generally know it, which lowers the cost of working with one. Payroll availability varies by country, so the answer depends on where you operate.

What Wave is built to do

Double-entry accounting

Keeps a real ledger with reconciliation rather than a spreadsheet.

Invoicing

Sends invoices and recurring bills with online payment links.

Receipt capture

Scans receipts and files them against expenses.

What Xero is built to do

Bank reconciliation

Matches imported bank lines against invoices and bills.

Accountant collaboration

Gives an external accountant direct access to the ledger.

App marketplace

Connects payroll, inventory and payment tools to the ledger.

Choose Wave if

• Freelancers and micro businesses with simple books.

Choose Xero if

• Small businesses that want their accountant working in the same system.

Wave: pros & cons

• Accounting and invoicing at no cost
• Simple enough to use without training
• Payments integrated
• Feature depth is limited
• Support is limited on the free product
• Availability varies by country

Xero: pros & cons

• Bank feeds and reconciliation are strong
• Large ecosystem of add-ons
• Accountants generally know it
• Pricing tiers limit invoice and bill counts
• Payroll availability varies by country
• Reporting customisation is limited