Wave suits very small US and Canadian businesses that want free invoicing and bookkeeping on its Starter plan. Xero suits growing businesses that want bank automation, multiple currencies, payroll options and a large app ecosystem, and it offers a month free to try rather than a free plan. If you send a lot of invoices but don't need automation yet, Wave's Starter plan goes a long way.
Bookkeeping software is one of those choices that's painful to undo, because your history lives inside it. So it's worth getting right. I read Wave's plans page and Xero's US and UK plan pages, and here's what each company says it includes.
Starter plans head to head
| Wave | Xero | |
|---|---|---|
| Free plan | Yes, Starter | Not listed; one month free to try |
| Invoices on the entry plan | Unlimited estimates, invoices and bills | 20 invoices on US Early and UK Ignite |
| Bank transactions | Auto-import on Pro | Reconciliation on every listed plan |
| Receipt capture | Unlimited on Pro | Smart document capture (UK) |
| Payroll | Offered | UK payroll from Grow; US add-on powered by Gusto |
| Multiple currencies | Not covered on the plans page | UK Comprehensive and US Established |
| Users | Not covered on the plans page | No per-user licence charges |
| Bookkeeping help | Wave Advisors with a dedicated bookkeeper | Free expert setup help |
| Region on the page | US and Canada | US, UK and more |
Wave keeps the basics free
Wave's Starter plan is aimed at people just starting their business or looking for the basics. It lets you create unlimited estimates, invoices, bills and bookkeeping records, send invoices from the mobile app and see cash flow and customers in one dashboard. You can add online card and bank payments to your invoices too.
Pro is where the automation lives: bank transactions imported and categorised for you, unlimited receipt capture and automatic late payment reminders. If you'd rather hand the books over, Wave Advisors gives you a dedicated bookkeeper and monthly statements.
Xero is built to grow with you
Xero doesn't list a free plan, but it offers one month free to try and free expert setup help. In the US, Early sends 20 invoices and enters 5 bills, Growing removes the invoice limit and automates bill entry, and Established adds multiple currencies, projects and expense claims. In the UK, Ignite sends 20 invoices and handles VAT returns and Making Tax Digital, and payroll arrives on Grow.
Two things stand out. Xero has no per-user licence charges, so adding your bookkeeper or a business partner doesn't change your plan, and it connects to more than 1,000 apps.
The bank feed line on Wave's page
Here's the detail I'd want anyone choosing Wave to see. On Wave's own comparison, auto-importing and auto-merging bank transactions sits under Pro, not Starter. So on the free plan you're creating records yourself rather than watching them flow in from your bank. For a business with a handful of transactions a week, that's fine. For a busy shop or agency, the hours add up quickly, and that's when Xero's reconciliation starts to earn its place.
It's not a reason to avoid Wave. It's a reason to be honest about how many transactions you'll be keying in each week before you commit.
Which business fits which app
Wave fits US and Canadian freelancers and micro businesses who mostly need to invoice clients and keep records tidy. Xero fits businesses with staff, overseas clients, a bookkeeper or plans to grow, and it's the one to look at in the UK, where Wave's plans page doesn't apply. My round-up of accounting software tools covers more options, and if invoicing is your main job, read how to invoice a customer correctly first.
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My advice on your first set of books
Count your monthly transactions and invoices. Under twenty invoices and a light bank feed, Wave's Starter plan or Xero's entry plan will both cope, and Wave won't ask anything of you. Once you're over that, or you need payroll or other currencies, Xero's plans are designed for exactly that stage. Whatever you pick, talk to your accountant first, because the software they already know will save you both time.
Do you make accounting or invoicing software? Tool makers can ask to be considered for a featured place in comparisons like this one.
Frequently asked questions
Is Wave free?
Yes. Wave's Starter plan is free and includes unlimited estimates, invoices, bills and bookkeeping records.
Does Xero have a free plan?
Xero doesn't list a free plan. It offers one month free to try and free expert setup help.
Does Wave import bank transactions on the free plan?
Wave lists auto-import and auto-merge of bank transactions on its Pro plan, not on Starter.
Is Wave available in the UK?
Wave's plans page shows plans for the US and Canada. UK businesses usually look at Xero, FreeAgent or similar tools.
