Wave vs Xero: Which Accounting Software Is Better?

Wave and Xero both handle everyday accounting tasks, but they are built for businesses with different needs. Wave offers a permanent free plan with unlimited basic invoicing and bookkeeping records, while Xero provides more accounting automation and tools for projects, inventory and international business.

This Wave vs Xero comparison covers pricing, bookkeeping, invoicing and the features that matter as your business changes.

Wave vs Xero: Overview

Wave has two main plans, including a permanent $0 option. Xero has three paid plans and a 30-day free trial, with more advanced features added as you move up.

Wave vs Xero at a glance

Prices checked September 2026. Xero pricing reflects announced U.S. rates effective October 1, 2026.

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Wave vs Xero comparison chart

The plans are easier to compare when you look at what each price point actually includes.

Pricing and key features compared

Wave’s $0 plan is permanent, whereas Xero offers a 30-day trial rather than a permanent free U.S. plan. Xero Early also has invoice and bill limits that disappear on Growing.

Wave

Wave accounting software is designed primarily for freelancers and small businesses. Its two-plan structure keeps the choice relatively simple: use Starter for core bookkeeping and invoicing or Pro for more automation.

Features

Wave Starter includes unlimited:

• Estimates
• Invoices
• Bills
• Bookkeeping records

It isn’t just an invoicing tool. Wave uses double-entry accounting and includes a chart of accounts, general-ledger functionality, reconciliation and financial statements.

Pro adds more automation, including:

• Automatic bank-transaction imports
• Automatic transaction merging and categorization
• Expense tracking
• Unlimited digital receipt capture
• Automated late-payment reminders
• Unlimited account users

Wave also supports recurring invoices, although automatic sending depends on the payment setup or Pro subscription.

Pricing

Wave Starter costs $0/month and is a permanent free plan.

Wave Pro costs:

• $19/month
• $190/year

Online payment processing and Wave Payroll are separate costs. Wave Payroll currently costs $40/month plus $6 per active employee and $6 per independent contractor paid.

Pros and cons

Pros

• Permanent free accounting plan
• Unlimited estimates and invoices on Starter
• Unlimited bills and bookkeeping records on Starter
• Double-entry bookkeeping
• Bank reconciliation
• Low-cost Pro plan
• Unlimited account users on Pro
• Automatic bank imports on Pro
• Unlimited digital receipt capture on Pro
• Core financial reports

Cons

• Bank-import automation requires Pro
• Smaller integration ecosystem than Xero
• Inventory accounting is manual
• No comparable built-in Xero Projects workflow
• Less support for multi-currency and more complex international workflows

Independent Wave reviews are available through G2 and Capterra.

Xero

Xero is cloud accounting software for small businesses, accountants and bookkeepers. All three business plans support unlimited users, while the available automation and accounting tools increase across Early, Growing and Established.

Features

Core Xero functionality includes:

• Bank connections and reconciliation
• Invoices and quotes
• Online payments
• Smart document capture
• Financial reports
• Sales-tax tools
• Purchase orders
• Inventory
• Contacts and file storage
• W-9 and 1099 management

Growing adds more automation, including automated bill entry and bank-reconciliation functionality through JAX. It also extends cash-flow forecasting from 30 days on Early to 60 days and adds performance dashboards and other financial insights.

Established adds:

• Project time and cost tracking
• Project profitability
• Multi-currency
• Employee expense claims
• Mileage claims
• KPI and ratio analysis
• Industry benchmarking
• 180-day cash-flow forecasting

Pricing

From October 1, 2026, regular U.S. Xero prices are:

• Early: $27/month
• Growing: $59/month
• Established: $97/month

Xero doesn’t offer a permanent free U.S. plan, but a 30-day free trial is available.

Early is the cheapest plan, but its limits matter: you can approve and send up to 20 invoices and enter up to 5 bills. Growing removes those restrictions.

Xero Payroll is a separate Gusto-powered option, currently priced at $36/month plus $6 per employee or contractor.

Pros and cons

Pros

• Unlimited users on all business plans
• Bank feeds and reconciliation
• Core inventory included
• Purchase orders
• More accounting automation on Growing+
• Projects and time tracking on Established
• Multi-currency on Established
• Employee expenses and mileage claims on Established
• 1,000+ certified app integrations
• More advanced forecasting and analytics on higher plans

Cons

• No permanent free U.S. plan
• Early has invoice and bill limits
• Projects require Established
• Multi-currency requires Established
• Employee expense and mileage claims require Established
• Payroll costs extra

Independent Xero reviews are available through G2 and Capterra.

Wave vs Xero: Detailed comparison

Price is only one part of the choice. The bigger differences appear in how each platform handles everyday accounting and the extra work that comes with a more complex business.

Free plans and pricing

Wave is the only one of the two with a permanent free U.S. plan.

Wave Starter gives you:

• Unlimited estimates
• Unlimited invoices
• Unlimited bills
• Unlimited bookkeeping records

Xero instead offers:

• A 30-day free trial
• Early at $27/month
• Growing at $59/month
• Established at $97/month

Wave Pro costs $19/month or $190/year, so it also starts below Xero’s lowest paid plan.

Price doesn’t tell the whole story, though. Xero includes features Wave doesn’t directly match, particularly around projects, inventory, multi-currency and accounting automation.

Accounting and bookkeeping

Both platforms provide double-entry accounting and the core tools needed to keep business records.

• Wave: Includes a chart of accounts, general ledger, reconciliation and financial statements. Starter can be used for core bookkeeping, while Pro adds automated bank imports and transaction categorization.
• Xero: Includes bank feeds, reconciliation, reports, invoices, bills and other accounting tools. Growing adds more reconciliation and bill automation, while Established extends into projects, employee expenses and multi-currency.

The IRS explains the types of records businesses may need to retain to support income, expenses and other tax information.

Invoicing and payments

Both Wave and Xero support invoices, recurring billing and online payments, but their entry-level limits differ.

• Wave Starter: Unlimited invoices and estimates.
• Xero Early: Up to 20 approved and sent invoices.
• Xero Growing and Established: The Early invoice restriction no longer applies.

Wave can schedule recurring invoices daily, weekly, monthly, yearly or on a custom schedule. Automatic sending is available when using Wave online payments or Pro.

Xero also supports recurring invoices, automated reminders and online payments through connected providers such as Stripe and GoCardless. Payment-processing fees are separate from the Xero subscription.

If billing is a major part of your workflow, our guide to how to send an invoice covers what to include before sending one. Clear invoice payment terms can also help set expectations around due dates and payment.

Bank reconciliation

Both platforms support bank reconciliation, but the level of automation differs.

• Wave Starter can still be used to create and reconcile bookkeeping records, while Pro adds automatic bank-transaction imports, merging and categorization.
• Xero includes bank connections and reconciliation across its plans. Growing adds automated reconciliation functionality through JAX alongside other automation tools.

So, Wave’s reconciliation itself isn’t Pro-only. The paid plan is where more of the bank-import and transaction automation comes in.

Expense tracking and receipts

Wave Pro adds expense tracking and unlimited digital receipt capture, along with automatic transaction imports and categorization.

Xero provides smart document capture as part of its accounting tools. Established also adds employee expense and mileage claims, including workflows for submitting, approving and reimbursing expenses.

For businesses that mainly need to digitize expense records, a dedicated receipt scanner app can provide a more focused workflow.

Payroll

Payroll costs extra on both platforms.

• Wave Payroll: $40/month plus $6 per active employee and $6 per independent contractor paid.
• Xero Payroll: Gusto-powered and currently $36/month plus $6 per employee or contractor.

Wave Payroll includes direct deposit, payroll tax functionality, an employee portal, payroll reports and W-2/W-3/1099 functionality.

Xero’s U.S. payroll option connects Gusto with the Xero accounting platform rather than including payroll in the standard accounting subscription.

Time tracking and projects

Xero includes more built-in tools for businesses that track work by project.

Xero Established includes Xero Projects, which can track:

• Time
• Costs
• Budgets
• Profitability

Projects can also be used to create fixed-price or time-and-materials invoices.

Wave doesn’t offer a directly comparable built-in project time-tracking workflow. Businesses that need time tracking alongside invoicing can also consider dedicated time-tracking software

Inventory

Both can account for inventory, but they do so very differently.

• Wave uses a manual accounting approach. Businesses maintain inventory asset and cost-of-goods-sold accounts, and Wave doesn’t automatically calculate or track inventory unit value.
• Xero includes core inventory functionality across its business plans. It can track stock alongside purchases and sales, with Inventory Plus available as an optional add-on for Growing and Established.

This means Wave’s inventory accounting shouldn’t be treated as equivalent to Xero’s built-in stock-management tools.

Financial reporting

Both platforms cover core financial reporting.

• Wave provides reports including profit and loss, balance sheet, cash flow, trial balance, aged receivables and payables, plus customer and vendor reporting.
• Xero also provides core financial reports, with additional forecasting and analysis depending on the plan. Early includes a 30-day cash-flow forecast, Growing extends this to 60 days and Established to 180 days, alongside KPI and ratio analysis.

Integrations and ease of use

The platforms differ more clearly once other business software needs to connect with the accounting system.

• Wave has a smaller integration ecosystem, although it can connect with third-party services and Wave Connect supports data uploads and downloads through Google Sheets.
• Xero currently supports more than 1,000 certified app integrations, covering a wider range of business workflows.

Ease of use depends on what you need. Wave’s smaller plan and feature set may feel more straightforward for a freelancer handling basic bookkeeping and billing. Xero involves more features and plan choices, but those tools can be useful when accounting requirements become more involved.

Choosing between Wave and Xero

The features you use every week are a better starting point than the longest feature list. Think about how you invoice, track expenses, manage stock and work with others before comparing plans. The SBA also has additional resources for managing day-to-day business operations.

When to use Wave vs Xero

Wave may cover what you need if the priority is:

• Keeping subscription costs low
• Unlimited basic invoicing and estimates
• Core double-entry bookkeeping
• Financial statements
• Straightforward billing and payment workflows

Starter covers these basics without a monthly subscription. Pro adds more automation, receipts, expense tracking and unlimited account users.

When to use Xero vs Wave

Xero provides more built-in support when you need:

• Unlimited users from the entry-level plan
• More accounting automation
• Project time, costs and profitability
• Built-in inventory tools
• Multi-currency
• Employee expenses and mileage
• A larger integration ecosystem
• More advanced forecasting and analysis

Some of these features require Growing or Established, so compare the specific Xero plan you would need rather than Xero’s starting price alone.

Another option for service businesses

Wave and Xero are built around bookkeeping and accounting. For businesses that spend more time managing client jobs than handling complex accounts, a simpler setup may make more sense.

Invoice Fly brings estimates, invoices, recurring billing, payments, time tracking, expenses and receipts into one workflow. Its invoicing software includes unlimited invoices, while the estimate and quote software covers pricing before the work is billed.

Current Invoice Fly pricing is $8.99/week or $98.99/year, and independent reviews are available on Capterra.

Invoice Fly isn’t designed to replace the full bookkeeping and financial reporting available in Wave or Xero. It’s aimed at a different workflow: managing the admin around doing the job and getting paid.

What to consider comparing Wave vs Xero

Wave and Xero overlap on everyday bookkeeping, but the differences become more important as your accounting needs expand.

Wave gives you a permanent free starting point for bookkeeping and unlimited basic invoicing. Xero costs more from the outset but adds deeper tools for inventory, projects, multi-currency and accounting automation.

The features you actually use should carry more weight than the size of the feature list. For a service business that mainly needs to estimate work, track costs and invoice customers, Invoice Fly offers a third route without the wider accounting scope of either platform.

Create and Send Invoices with Invoice Fly

Whether you’re billing clients weekly, monthly, or per project, Invoice Fly helps you create professional invoices, track payments, and stay organized from anywhere.

Try it for free >