Initial setup
Create the business, choose the business type and currency, and set the fiscal year start. Connect the bank and card accounts you use for the business. Wave builds a basic chart of accounts. Review it and rename or remove accounts that don't fit. Set an earliest transaction date so the feed does not pull in irrelevant months.
Categorizing transactions
Imported transactions appear for review. Choose a category for each one, or let Wave suggest from past choices. Be careful with transfers, owner contributions and owner draws, which are not income or expense. Use the right account types so your profit is not distorted. Receipts can be uploaded in some plans for documentation.
Invoicing and payments
Customize an invoice with a logo, items and terms. You can send it by email, accept card or bank payments through Wave Payments for fees that are listed on its pricing page, and set up recurring invoices. When a payment arrives, Wave records it and the fee. Compare the payout to the invoice to make sure the fee is recorded as an expense.
Reports and tax support
Wave offers a profit and loss, balance sheet, sales tax reporting and an accounts receivable aging report. Sales tax rates can be tracked, but you are still responsible for filing and remitting. Export reports or give your accountant access so they can review. Year-end adjustments, such as depreciation, may need manual journal entries.
Where you may outgrow it
Businesses with inventory, complex projects, multiple entities, heavy payroll needs or a team of users may find the features limited. Payroll in Wave is available in certain areas only, so confirm. If you outgrow it, export your chart of accounts, customers, vendors and transaction history before moving, and plan a clean start date. See our guide on switching accounting software for how to avoid double counting.
Treat the free price carefully. Time spent on workarounds has a cost too, so compare against paid options if your bookkeeping takes hours every week.
A checklist for your first month
Connect accounts, set the start date, review the chart of accounts, categorize imported transactions, create your first invoice, and reconcile the bank to your statement. Then compare your profit and loss with what you expected. If anything looks odd, it is usually a transfer or owner draw that was categorized as an expense, which is easy to correct early.
If you have been tracking in a spreadsheet, choose a start date, enter opening balances for bank accounts, and import only transactions after that date. Starting clean at the first of a month is easier than mixing in half a month of history. Keep the old spreadsheet as an archive, and compare the first month's profit to the sheet to confirm the setup is right.
Common questions
Is Wave good enough for an LLC?
Many single-member LLCs and small service businesses use it. Check that it supports the reports your accountant needs.
Can my accountant use Wave?
You can invite an accountant to view or work in the file, depending on current features.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.