Catching the Online Accounting Wave

When I was started ME Consulting, one of the biggest challenges was finding an accounting system that met my needs. To be honest, most of them have way too many bells and whistles for a one-person operation. This means your choices are pretty much limited to a few options, especially if you have a Mac. In the end, I selected Jumsoft’s Money – a little-known desktop software application.

Over the past few months, I’ve been looking a number of online accounting systems, including Xero. Today, a new player officially enters the fray: Toronto-based Wave Accounting. It’s good to see a Canadian start-up getting in the market, especially one that seems to have lots of potential given how many applications are going into the cloud.

While I haven’t had much time to try Wave Accounting, first impressions are good. It’s relatively easy to set up, although the process to get up and going needs to be smoother. The service seems to have all of the necessary ingredients, including a way to send invoices.

The price structuring is flat at $19.99/month, although volumes discounts are offered for six and 12-month plans. In an ideal world, it would be good to see tiered-pricing to meets the needs of different sized companies – along the lines of what Xero and ClearBooks do. That said, the prices are reasonable, especially for small companies looking for an online service that lets multiple people access an accounting system.

Kirk Simpson, one of Wave’s co-founders, said Wave was started because there’s a major opportunity for a service that meets the needs of small business owners – given 65% of them are using spreadsheets for at least part of the accounting needs.

The target audience, he said, is employees with five employees or less. “We don’t ever see ourselves going after mid and large size companies – ever,” he said. “They have customized needs that require a more robust solution. We see this solution working for both self-employed entrepreneurs and small companies with a few employees. Obviously our target market will be internet-savvy and that segment is constantly growing.”

Simpson believes the online accounting market is poised for major growth because smaller companies are looking for services that offer accessibility, collaboration and automatic data back-up. And while there is competition from larger players, he contends they are just moving their desktop applications into the cloud as opposed to building true online services.

Moving forward, Wave plans to integrate its accounting service with other companies meeting the needs of small business owners. This includes invoicing (a partnership with Freshbooks would make perfect sense) and payroll management.

For anyone interesting in an online accounting system, Wave is definitely worth checking out. It offers a 30-day free trial that doesn’t require a credit card to register. Any data put into the system during the trial period can be exported if you decide not to buy it.