Wave Accounting

by Lake
(Northern BC, Canada)

Wave Accounting - Free Bookkeeping in the Cloud

Wave Accounting - Free Bookkeeping in the Cloud

I attended a webinar this past week about the free cloud application Wave Accounting.


It is a Canadian based company. Their target market is early stage businesses ... the ones who use shoebox accounting or Excel spreadsheets to manage their bookkeeping ... and have fewer than 9 employees.

It has the ability to directly connect with your bank to import and automate data entry, or you can upload a bank statement. No more manual entry. The bank feeds are encrypted and read only so Wave would never be able to move or transfer money.

It will separate personal and business expenses for you and can handle multiple businesses.

It tracks income, expense, accounts receivable and payable, and foreign currencies ... all for free. In the future, apps will be added that are not free ... such as payroll for $3/employee coming shortly ... but the core package will always be free.

I was impressed with the product as presented. I think I will try it out but two negatives I see right off the top are:

1. It doesn't let you do formal bank reconciliation.

2. Downloading transactions does NOT take care of the paperwork needed by CRA during an audit. Wave needs to find a way to let these entreprenuers attach eReceipts to the imported business transactions ... otherwise they will be in trouble during an audit when they can't produce the required documentation.

Have you used or tried Wave Accounting? I would be really, really, really interested to know what you think of the application.

Comments for Wave Accounting

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Jan 21, 2012
 Wave and Your Bank's Fine Print
by: Lake

Want to know about fraud and your bank agreement and cloud bookkeeping? Check out this article by Wave BEFORE you let Wave connect automatically to your account.

http://waveaccounting.com/wave-and-your-banks-fine-print/
Jan 29, 2012
 Automatic Importing Caution
by: Lake

I contacted one of the charter banks to determine if granting importing access violates their electronic online agreement ... and they say yes it does.

They are aware at this point that people are allowing third parties read access ... they haven't shut it down yet ... but it does mean you are not covered for fraud or anything else as you have "shared" your account information with a third party.

Given this, I recommend you download your transaction file from the bank so you are not sharing your access information and upload to WAVE.

It would be nice if WAVE would work directly with the banks to be included in their agreement ... an exception to the rule so to speak ... an approved third party aggregator service.

After talking with one bank, I looked online for all of the Big 5 access agreements. All the agreements with the exception of the Scotiabank had very easy to read electronic online access agreements which stated clearly that you are now responsible for losses if you have shared your access information with a third party aggregator service as it is contrary to your agreement to keep your password absolutley confidential.
Jan 29, 2012
 Wave ProNetwork
by: Lake

I am excited about this new product even though I still have some concerns. Because of that, I decided to join their Pro Network.

I hope to send Wave my concerns as they arise.

I know they are going to be rolling out their payroll service shortly. This service will be a fee for service and not part of their base free offerings package.
Feb 07, 2012
 PayPal has user access
by: Lake

PayPal has the feature where you can give various users access to the account but limit what they have access to.

When importing PayPal transactions to Wave Accounting, make sure you use this feature instead of providing Wave with YOUR id and password.

Now I just wish the Big 5 banks in Canada would climb on board and provide this feature as well.
Mar 01, 2012
 Uploading Bank Transactions to Wave Accounting
by: Lake

If you are going to upload your bank transactions to Wave Accounting instead of import (so you don't violate your online banking agreement), it is a bit tricky to figure out how to do this.

Go to the "Imported Transactions" menu selection. Scroll down to the very bottom of the page. In very small lettering you will one of the options is "Upload a bank statement".

Why they placed it at the bottom and not the top beats me. Their preference is to clearly have you import rather than upload, otherwise they would make it easier to find this menu selection.
Mar 05, 2012
 Entering Expenses in Wave Accounting
by: Lake

When you enter your expenses into wave, make sure you have gone in and selected the sales tax applicable.

I've been approving transactions thinking it would have saved my sales tax preference. When it didn't, I had to go back in and edit each transaction through the "Expense" menu.

As I've been doing this, it adding the sales tax to the total the total ... so I've been having to manually adjust the expense amount so the total includes sales tax instead of adding sales tax on.

Now, because I can't do a formal bank or credit card reconciliation, I have to come up with a process to determine if my bank or credit card accounts are still in balance and if I have captured my sales tax correctly.

TIP: Remember to take the time to setup your customer and vendor list then assign each transaction to a customer or vendor ... WAVE does not do this automatically for you.

This classification will enable you to analyze your top or bottom 10 customers and/or vendors. It will also allow you to reconcile your vendor accounts to the vendor statement or deal with a customer complaint or reward your top customers or ask for a better deal from a vendor.
Mar 11, 2012
 Currency Allocation During WAVE Accounting Import
by: Lake

It is important to note that WAVE imports your transactions in your DEFAULT currency. So if you have a PayPal account, this is a problem as most PayPal accounts have a US dollar sub-account and a Canadian dollar sub-account.

This means you MUST modify EACH USD transaction imported by manually selecting the correct currency. It will be tough to match and/or reconcile anything if you don't.

While you are modifying the imported transaction, remember to assign each transaction to a customer or vendor as discussed in the previous post.
Mar 14, 2013
 Not A Fan
by: Lake

I've been waiting for a bank reconciliation feature ... it still doesn't have one.

I wanted to categorize a receipt to two categories. The system actually ends up recording it as 2 separate transactions ... that 's right ... 2 separate transactions ... now that is a reconciliation and audit nightmare just waiting to happen if you ask me.
Jun 30, 2013
 Comparison of Cloud Accounting Software
by: Lake

From my above post, you can see I don't recommend WAVE Accounting at this time. Here is a link to an excellent article comparing all the SaaS (software as a service) programs' features to determine if they can do accrual accounting.

Accrual accounting you will remember is required by CRA to file your income taxes unless you are a farmer or fisherman.

Here's the link to the article:

Cloud Accounting Analysis To Determine If It Is Capable Of Accrual Accounting.

QuickBooks online, Xero, Kashoo, WAVE, FreeAgent and FreshBooks are compared. Does your choice meet CRA standards?

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