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Battle of the accounting software: Freshbooks vs Wave

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Any business owner would prefer to be working on their business instead of in it. When you start a business, you do it to make an impact, make money, and serve customers – not to become your own assistant. But running a business requires a lot of compliance and administrative tasks.

The positive benefit is that a well-run business can often find multiple tax credits and other profit-increasing efficiencies. Getting there, though, requires a lot of administration.

Enter accounting software. Platforms sprouted up a lot in the past decade that help small business owners and freelancers run their businesses. Features like expense management and sending invoices became table stakes, and now the platforms compete on value-add features and services.

We’re comparing two Toronto-based platforms: Wave Apps (formerly Wave Accounting) and Freshbooks. We’ll be looking at:

  • Who the companies target (their unique angle)
  • The core features
  • The value-adds
  • Pricing
  • Cost comparison


The ideal user

Both Wave and Freshbooks advertise towards the small business owner – anywhere from solopreneur to a small handful of employees – but they do it in a slightly different way.

Wave targets the freelancer and commerce entrepreneur

When Wave goes to market, it describes itself as a business management tool for entrepreneurs. The company offers a suite of services through their platform aimed to help the person who is people-strapped but bringing in cash.


Wave Dashboard

Wave Dashboard


Freshbooks targets consultants and creatives

Also describing itself as a business management tool, Freshbooks speaks to consultants, creatives, and small business owners with some staff. Client interaction seems to be key in Freshbooks’ messaging, and it shows with their features.


Core features

Both platforms have core features that you’d expect when you hear “small business accounting software”

1. Accounting ledgers and reports

The original bread and butter of these platforms, both offer the ability to do reconciliation, statement of account, and all other necessary accounting reports. Both also feature business-level reporting, where you can see things like revenue and expenses over time or per client.

2. Invoicing

Both have invoicing tools to create your own invoices. Freshbooks touts how easy it is to make your invoices beautiful and visual, while Wave focuses on the point of an invoice: getting paid. Both platforms also offer recurring invoices.

3. Payments

Whether using Freshbooks or Wave, you can accept payments through the platform. The fees are the same: 2.9% + $0.30 per transaction for a credit card and 1% straight fee for bank transfers – unless you opt for Advanced Payments with Freshbooks or Invoice Advances with Wave (more on those in the next section).

4. Receipt management and expense tracking

Another table stake, both platforms allow you to take pictures and upload receipts into the cloud for automatic expense tracking.



You can really see the targeting differentiation when it comes to value-add services and features. In both cases, it becomes not a question of how can you account for things better, but the entire ecosystem around accounting needs.

Wave focuses on helping entrepreneurs

Wave’s big push is with Wave Plus, a service tier where users can get ongoing bookkeeping or one-time accountant coaching. This can be especially helpful if you’re a commerce entrepreneur or have inconsistent books to keep on your business.

In-keeping with their focus on entrepreneurs, one other feature they have is Invoice Advances. Targeted towards the cash flow crunch that many entrepreneurs feel in the early days, you can get paid out on your invoices by Wave almost immediately after sending the invoice. Wave then collects the payment for the invoice and takes a 3% fee.

Another differentiator for Wave is that the platform offers the ability to do payroll. It’s a paid service, with a monthly flat fee plus an incremental fee per employee, starting at $20 per month.

Freshbooks focuses on helping creatives

Nearly all of Freshbooks’ additional features are geared towards a classic consulting engagement or other creative work. Building what amounts to a mini-CRM, you can:

  • Build proposals
  • Track expenses directly to a client for re-billing
  • Time management tools built into the platform to track against proposals
  • Chat and collaboration tools within the platform for working with teammates and clients on projects
  • In-depth permission tracking for different files or information so you can seamlessly work with a client or teammate

Freshbooks also has an Advanced Payments feature where business owners are paid instantly on invoices. The feature costs $20 per month as a base. Accepting Advanced Payments will then cost 3.5% + $0.30 per transaction, up from their usual 2.9% + $0.30 per transaction for normal speed payouts.


Freshbooks Dashboard

Freshbooks Dashboard



Both platforms integrate with Zapier, and through that you can integrate with over 1,500 applications. However, Wave’s direct integrations tend towards commerce (Etsy, PayPal, and more), while Freshbooks’ direct integrations lead towards B2B management (CRM systems, task management systems, and more).



The user focus is perhaps most clear in the pricing models. Wave starts at free (forever) for many of their products. Freshbooks begins at $15 USD a month and can go quite high from there.

Freshbooks Wave Apps
Free products (unlimited use)
None Accounting software
Invoicing software
Receipt and expense management software
Paid products and services Platform subscription
$15 monthly for 5 billable clients
$25 a month for 50 billable clients
$50 a month for 500 billable clients
Custom for >500 billable
Wave Plus
Bookkeeping starts at $149 a month
Accounting coaching starts at $249 one-time payment
Payments Credit cards: 2.9% + $0.30 per transaction (Amex 3.5%)
Bank payments: 1% per transaction
Credit cards: 2.9% + $0.30 per transaction
Bank payments: 1% per transaction
Invoice Advance $20 a month for Advanced Payments (plus 3.5% + 30 cents per transaction) 3%
Additional $10 per person for additional team members Payroll
Base fee of $20 per month
Additional $4 per active employee per month
Additional $4 per independent contractor paid per month


Cost comparison

Let’s say you had 5 billable clients paying by credit card and you use advance payments for both Wave and Freshbooks:

Freshbooks Wave Apps
Cost comparison at $1,000 revenue per month

(5 billable clients, each paying $200 per month)
$71.50 per month $30.50 per month
Cost comparison at $5,000 revenue per month

(5 billable clients, each paying $1,000 per month)
$211.50 per month $296.50 per month
Cost comparison at $10,000 revenue per month

(5 billable clients, each paying $2,000 per month)
$386.50 per month $591.50 per month


It’s clear that Freshbooks scales cheaper than Wave does when there’s a lot of revenue on the table. In a scenario without advance payments, Freshbooks would always cost the same as Wave plus the subscription to Freshbooks, since Wave is free.

If you ran the same scenario with employees, though, Freshbooks can get more expensive as they charge $10 per month per team member.

Wave breakdown: You take the 2.9% + $0.30 per transaction, plus 3% advance fee, and calculate it against revenues. No costs for the platform.

Freshbooks breakdown: You take the $20 a month for Advanced Payments. Then calculate the 3.5% + $0.30 per transaction fee against revenue. $15 a month for the platform.


Should you use Freshbooks or Wave?

Choosing between the platform could be a matter of identity, costs, or necessary features. If you simply need accounting software, Wave’s free platform is enticing. It’s when you get to the additional value-adds that the platforms begin to grow apart.

For those in creative industries whose work is heavily project based, Freshbooks is a stronger contender. Their mini-CRM, time management tools, and ability to follow a project from proposal to final invoice within the platform is powerful. However, for those in commerce or freelancing who need a ‘pay as you grow’ environment, Wave is the stronger choice.

Whichever you ultimately choose, you’re using a solid product made by companies that seem to care about their customers a lot.


Disclosure: I am a Wave customer.