How to Set Up Wave Accounting as a Service Business
- Melissa Mittelstaedt
- Oct 21, 2025
- 5 min read
Updated: May 19
I’m going to walk you through how I set up my Wave Accounting system as a service-based business. I’ll be bopping around the left menu a tad, starting with what’s most important–so hop on into Wave and let's get started!
How to Set Up Wave Accounting: Banking Tab
Getting your business bank accounts connected is the first step in this process. I’m assuming you don’t commingle your business & personal funds at this point, but if you do… please reach out asap, and we’ll get that ironed out for you!
Click on the “Connected Accounts” tab and get your business checking account(s), business savings account(s), business credit card(s), and any loan financial institutions connected.
One quick thing to note: I use my little credit union for both business and personal, so you’ll see your personal accounts listed as options. Just make sure those are toggled off.
Now, let the system do its thing and import your transactions. Once your accounts are in the system, head over to the Accounting tab where things get juicy!
Accounting Tab
This is really the hub of your accounting system. Getting your Chart of Accounts set up correctly makes your life SO MUCH easier. So, click on “Chart of Accounts” and let’s start there.
Chart of Accounts Tab
Here's what that looks like:
Assets
The Assets section is where you’ll see your checking and savings accounts listed. The only sections in here that are applicable to me personally are Cash and Bank, Money in Transit, and Expected Payments from Customers (because I use their invoicing system on occasion).
There’s really not much to do here except to poke around and make sure all your cash accounts are listed.
Liabilities & Credit Cards
The Liabilities & Credit Cards section is where you’ll see your credit cards and loans. Same as above, not much to do here except verify the right accounts are listed.
Income
This is where the fun begins!!
Income Subset
For any category of income you’d like to see, you’ll want to put that here.
Here’s how I set mine up:
MelissaMitt Financials (financial consulting work)
UAccess Income (sign language interpreting work)
Passive Income (from a module I created for a course my friend is selling… I get a percentage of each sale)
I use Stripe for my financial consulting business, invoices for my sign language interpreting business, and direct deposits from my friend.
You can get more complicated than that with your Income categories, or just have one… totally up to you.
Note: If you use Stripe and get deposits into your checking account, you won’t really be able to track where that money is coming from, so don’t get too wild with your income category set-up.
Now that income is sorted, let’s talk about the part your accountant is holding their breath to see how it turns out!
Expenses
This is the most important part of your chart of accounts, because this is the information your bookkeeping and/or tax filing team will use for tax purposes.
Wave does a decent job of preloading information, but I’ve yet to see someone who hasn’t had to make adjustments for their own business.
Operating Expenses Subset
These represent all the categories of business expenses you have. Make sure you don’t go too granular here; you want to have broad, recognizable categories.
If your tax filing entity has a list of preferred categories, I’d make sure you use it to align your Wave operating expense categories. Making their life easier makes your life easier… trust!
One con of Wave is that you can’t create subcategories, like you can in QuickBooks. For example, if you like to see how much you’re putting toward ad spend, you’d have to create that category on its own, instead of tucking it under Advertising & Promotion.
Lastly, if you are an S-Corp (or file as an S-Corp), make sure your Payroll Expense is listed here.
Cost of Goods Sold Subset
A Cost of Goods Sold (COGS) is defined as: the total direct cost required to produce the products (or services) a business sells.
This section is typically for product-based businesses. For example, a jewelry maker needs gems to create a bracelet. Those gems would be a COGS.
But there are some instances where it makes sense for a service-based business, and FreshBooks’ article “Should Service Businesses Use COGS?” outlines it nicely.
And if you’re not sure whether something would be a COGS, that’s a great question to bring to your tax person!
Equity
Typically, no adjustments are needed here. But for reference, the “Business Owner Contribution and Drawing” category is what you choose for the following: any time you put money into the business from your personal account, any time you pay yourself as an LLC, or any time you pay yourself a distribution as an S-Corp.
Transactions Tab
This is where you’ll go to categorize all your cash flow transactions. Wave’s technology will try to guess the right category, but make sure you verify that it’s accurate.
This is one of the MOST crucial parts of bookkeeping. So much so, I had to create a separate post for it. If you want more information on the best approach to reviewing your transactions, check out my “How to Categorize Transactions in Wave Accounting” blog.
Sales & Payments Tab
As you’ll see, I’m not touching on every tab in this section. I’m just focusing on what you need to get up and running.
Product & Services
This is where you’ll add any service you’ll sell with an invoice.
Click the blue “Add a product or service” button.
Name: Enter the service’s name
Description: This will appear on the invoice, so try to keep this succinct (you can make adjustments on the invoice itself if need be later)
Price: Enter the full price of the service
Check the Sell this box
Select the correct Income account to attach this to
Click “Save”
Customers
If you have a core group of customers that you invoice regularly, entering those now would be helpful. Otherwise, you can add them as you craft their invoice.
Invoices
This is the section where you create & send invoices. To add your logo, brand colors, and invoice settings, head to the Business Settings tab instead.
I’m not going to walk through creating an invoice, but the thing I wanted to point out is your sending options:
Via email from the system
Via PDF with or without a payment link
Purchases Tab
Just a few quick notes in this section to get you started.
Bills
This section is a take-it-or-leave-it for me. It doesn’t save me any time to enter my recurring bills into the system, but if you like knowing when they are due, you might want to add them.
Vendors
Adding the businesses you buy from helps fill in the details for business expenses, but it’s really a personal preference.
Dashboard
You can customize it, but I’d leave it as is until you get used to the system and know what data points are most important to you at a glance.
And that’s your Wave foundation! It’s not the most luxurious afternoon you’ll spend, but getting this right up front means cleaner books & easier tax prep… talk about a WIN-WIN.
Wanna skip the DIY portion of setting up your Wave account? This is exactly what we’d handle in my Financial Systems Set Up offer. When we’re done, you’ll be using Wave like you’ve known it for YEARS! Click here to get started with your Financial Systems Set Up.
Melissa Mittelstaedt
Financial Consultant | Accredited Financial Counselor®
