Here’s the scenario: You’re a small business owner with less than 10 employees and business is going really well. That means you need to make sure your financials are accurate and everything that’s in the bank is showing up on your general ledger.
It’s time to shop for accounting software.
You know what you want to operate in the cloud, giving you the freedom to check on your business from anywhere in the world. But what do you go with?
There are a few options, but we’ll focus on Xero and Wave. Both can handle a slew of accounting tasks, but which one is right for you? Let’s break it down.
Xero has become quite popular in the past couple of years, growing immensely in the U.S. and across Europe. It was built from the ground up with mobile in mind, which is a big plus for new and existing small business owners.
You’ll end up paying about $40 per month to handle all your bank reconciling, invoicing and more.
The first thing you notice about Xero is that it’s absolutely beautiful. Accounting never looked so good. You can pull up your dashboard — which gives you a snapshot of your business’ financial health — from any web browser or device. Its usability and design are by far the best on the market. When you fire it up, it’s simply easy to use.
And of course, being cloud-based, updates are free. Every time a new feature is released, it’s just there, automatically downloaded.
Think of Wave as a simpler version of Xero. You might not have as many features, but as a small business owner of a business that’s relatively small, you might not care.
Wave, too, has a beautiful layout and easy-to-use interface; it’s just limited when compared to Xero.
It handles your cashflow, invoicing, payments and payroll, but can’t handle automatic bank reconciliations, which might be a deal breaker for some.
It recently introduced a new app called Wave Invoice, which gives you a comprehensive look of all your outstanding invoices and the ability to have those invoices paid. On average, customers are paid in about 5 days.
For the smallest of small businesses, Wave might be the better choice. A simpler version is easier to deal with, it’s slightly cheaper and it’s proven.
But for those with more complicated financials, or for those who expect to grow immensely in the near future, Xero is a more logical choice. It is more expensive, but it can handle everything QuickBooks can handle for large companies and more.
Both harness the power of cloud computing, allowing your business to be flexible and nimble.