Wave vs Xero
Wave costs nothing for invoicing and bookkeeping and earns its money from payment and payroll fees, but it works properly in only a few countries. Xero is a paid subscription with unlimited users, leading bank reconciliation and a deep app marketplace. Freelancers with simple books stay on Wave; businesses with several people in the accounts move to Xero.
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Choose Wave ifyou are a freelancer in one of the few countries Wave supports, you need unlimited invoices and basic double-entry books, and paying nothing matters more than support.
Choose Xero ifmore than one person works in the books, you reconcile a lot of bank transactions, and you expect to connect other apps as the business grows.
Wave and Xero side by side
| Wave | Xero | |
|---|---|---|
| Our accounting software rank | #4 of 12 | #7 of 12 |
| Established in | Canada | New Zealand |
| Pricing | Free Starter plan; Pro per business per month, published; fees on payments and payroll | Per month by plan, published |
| Free tier | Yes | — |
| Open source | — | — |
| Self-hostable | — | — |
| Built for | A freelancer who needs free invoicing and basic books | A business where several people touch the books |
| Not for | A growing company with stock or payroll complexity | A manufacturer that needs real inventory |
Both are reviewed in full in our accounting software ranking: Wave and Xero.
Where they differ
Wave 1 · Xero 2 · open 1- 01
What it costs
Wave's accounting and invoicing are free, with unlimited invoices and no per-invoice cost; you pay only fees on payments and payroll if you use them. Xero charges a monthly plan price, published, though it never charges per user. For a sole trader with simple needs, nothing beats free, and Wave's version of free is real.
Edge: Wave
- 02
Where it works
Wave works properly in only a few countries, which rules it out for many buyers before features come into it. Xero is a global product that is strong in some countries and merely present in others, and its bank feed coverage varies by country. Xero reaches further, but check your own country and bank before relying on either.
Edge: Xero
- 03
Room to grow
Xero lets an unlimited number of users into the books, has the best bank reconciliation in the category and a deep app marketplace to build on. Wave is described as simple, and a growing company with payroll complexity is the buyer it suits least. When headcount and transaction volume rise, Xero has far more headroom.
Edge: Xero
- 04
Help when something goes wrong
Wave's support is thin unless you are paying for one of its transactional services, which is the trade-off of a free product. Our data does not describe Xero's support, so the two cannot be compared directly on it. What is clear is that Wave users on the free core should expect to solve most problems themselves.
Depends on the buyer
When neither fits
Neither suits a business that holds stock: Wave has no inventory and Xero's is thin. Zoho Books includes inventory and has a free tier under a revenue threshold. A UK contractor wanting tax filing handled may find FreeAgent the better fit.
Wave or Xero: questions
3 answersIs Wave really free compared with Xero?
Yes, for the core. Wave's invoicing and bookkeeping are free, including unlimited invoices, and it is funded by fees on payments and payroll.
Xero is a paid monthly subscription with published prices. The cost of Wave appears only if you take card payments or run payroll through it.
When should a business move from Wave to Xero?
When the books stop being a one-person job. Xero includes unlimited users, stronger bank reconciliation and a large app marketplace, while Wave is aimed at freelancers with basic needs and has thin support.
Move on a clean period boundary so you do not carry two systems for months.
Do Wave and Xero both handle inventory?
Wave has no inventory. Xero has inventory, but it is thin, and product businesses usually add a second system alongside it. If stock is a real part of your operation, neither is a strong answer on its own, and Xero is only the lesser compromise.