If you are deciding between QuickBooks Online and Wave, then you need to consider a few factors. A major difference between the two is that QuickBooks Online is paid and Wave is free. That said, if you simply need a free program and you’re willing to sacrifice some essential features, Wave might be enough. However, if you want a solid accounting platform that has more advanced features, like project accounting and inventory management, then QuickBooks Online is the more preferable option.
Let’s go over some of the key differences between QuickBooks Online and Wave to see which accounting solution is right for you.
Number of Users
A Wave account supports a single user, making it a good option for solopreneurs. However, if you need multiple-user access, then QuickBooks Online is the ideal option. The highest pricing tier, QuickBooks Online Advanced, includes up to 25 simultaneous users, making it a better choice for medium to large-scale businesses. If you have a dedicated accounting team and need multiple users to manage your books and financials, we recommend that you purchase or upgrade to QuickBooks Online Advanced.
Accounts Payable (A/P) Features
If you only need a simple solution to track your expenses, you might do good with Wave. However, note that you only use Wave to enter and track your bills, but there’s no option to pay them within the platform. When you get at least QuickBooks Essentials, you’ll be able to pay your bills online or print checks from the register to pay them. Another excellent feature we love about QuickBooks Online is the ability to create recurring transactions, which is helpful if you are working with multiple vendors and suppliers. QuickBooks Online also includes other features not present in Wave, such as the ability to enter a vendor credit for return or refund, set up and track purchase orders, and enter a bill for inventory purchases.
Accounts Receivable (A/R) Features
You can use both QuickBooks Online and Wave for your invoicing needs. Both offer various templates and give you the ability to create customized invoices based on the unique needs of your business. However, there’s a lot more you can do in QuickBooks Online. For instance, you can include tracked expenses in your invoices and enter partial payments of invoices in QuickBooks Online. If you need a more flexible invoicing solution, then we recommend QuickBooks Online.
Bank reconciliation is another huge advantage of QuickBooks Online over the free Wave accounting software. Every business owner understands the importance of bank reconciliation, making QuickBooks Online stand out. With Wave, there’s no way you can reconcile bank and credit card transactions with missing or uncleared items. On the other than, QuickBooks Online enables you to reconcile even items that haven’t been processed by the bank. Hence, if your business heavily relies on paying electronic checks, then you should get QuickBooks Online.
Product-based businesses are better off with QuickBooks Online, as Wave has no features for managing inventories. Offered in the QuickBooks Online Plus and Advanced subscriptions, QuickBooks Online’s inventory management module lets you track available items and quantities, update inventory accounts automatically, categorize items as taxable and non-taxable, generate and send purchase orders to vendors, and create alerts to let the team know when to replenish stocks.
Tip: If you are in the manufacturing industry and you need to track raw materials and finished goods, then you may consider QuickBooks Desktop Enterprise. Enterprise has a terrific inventory management system for tracking inventory parts and assemblies. If you want more flexibility, such as the ability to track inventory in multiple locations and use barcode scanning, then we suggest QuickBooks Enterprise Diamond.
Both programs have a mobile application, but QuickBooks Online is more functional. The Wave app lets you do basic accounting tasks, such as issuing invoices and accepting payments online. QuickBooks Online lets you do other things, like assign expenses to customers or projects and view financial reports.
Overall, Wave is great for very small businesses that need basic invoicing and expense tracking. However, if you want more flexibility and advanced features, like paying bills by check and inventory management, then QuickBooks Online is a clear choice. QuickBooks Online includes four subscription options, but to harness its full potential, you should consider getting QuickBooks Online Advanced.