A virtual bookkeeper can help you streamline your business without even being in the same time zone as you.
In this article we will discuss what a virtual bookkeeper is, as well as the benefits and drawbacks of hiring a virtual (online) bookkeeper.
What is a Virtual Bookkeeper?
A virtual bookkeeper is someone that handles your bookkeeping from a different location, with all of the bookkeeping tasks and communication being handled online.
Virtual bookkeeping has grown in popularity over the last decade due to the rise of cloud-based bookkeeping software and the advancement of remote conferencing software that makes it incredibly easy to complete all of the bookkeeping tasks remotely while also staying in touch through video meetings and phone calls.
Why is Virtual Bookkeeping Important?
Every business needs some way to measure performance and assess the financial health of their company.
Without proper bookkeeping, there would be know way to prepare the financial statements that are needed to understand how well a business is operating.
The bookkeeper is responsible for recording and classifying all of the transactions that flow through a business in a given period.
Then they will organize this data into financial statements, such as the income statement and balance sheet, that are then used by ownership and upper management to assess the overall financial position of the company.
A virtual bookkeeper will allow you to make up-to-date budgeting decisions, create proper forecasts, and enjoy a stress-free tax season.
Why Hire a Virtual Bookkeeper?
A virtual bookkeeper can help improve your business if:
- you are currently spending too much time and energy completing menial bookkeeping tasks
- your accounting records are not updated for the current period and you need someone to perform catch-up bookkeeping
- you don't want to worry about anything during tax season
- you want to be able to take advantage of your maximum tax deductions by meticulously keeping track of each deductible expense
- you have been paying your accountant too much money to go back and fix your books during tax time
- you don't always know exactly how much cash you currently have on hand or how much profit was generated by the business last month
Virtual Bookkeeping vs. Local Bookkeeping
In the past, it was necessary to work with a bookkeeper or accounting firm within your community because you would need to meet with them to communicate and drop of any necessary financial records needed to complete your books.
However, with the rise of remote bookkeeping software and the advancement of online communication, there is becoming less and less of a need to physically meet with your bookkeeper or accountant in person to complete your bookkeeping since everything can be done remotely.
With online bookkeeping software, you and your bookkeeper are able to access all of the same files from different computers, removing the need to meet in person for a hand off.
Further, online video and messaging applications allow you to seamlessly communicate with your virtual bookkeeper at any time, from anywhere in the world that has access to internet.
Types of Virtual Bookkeepers
The two types of virtual bookkeepers are freelancers and bookkeeping service companies.
Freelance Virtual Bookkeepers
Freelancers can vary wildly in their skill level and bookkeeping expertise.
When hiring a freelancer, be prepared to be more involved in the bookkeeping process compared to hiring a virtual bookkeeping service company.
More often then not you will need to train the freelancer on your business and show them how you want certain transactions classified.
Virtual Bookkeeping Service Companies
With virtual bookkeeping services, you are assigned a dedicated bookkeeper from a team of highly trained experts to complete your books for you with as minimal effort from the business owner as possible (or at least that's how it works at Noon).
Compared to freelancers, bookkeeping services are normally more reliable because you have a fully dedicated team ready to assist you, releasing you from ever having to worry about relying on just one person to keep your financials organized.
What if your freelance bookkeeper gets sick or goes on vacation?
When you hire a professional bookkeeping service to handle your books, this is never something you have to worry about.
How to Choose a Virtual Bookkeeper
Here are some questions you should think about before choosing the best virtual bookkeeping solution for your business.
"How many transactions flow through your business within a month?"
Many freelancers charge by the hour, so more work equals a higher service fee.
If you have thousands of transactions flowing through your business each month it may best to contact a dedicated team of professional bookkeepers.
"Do you use accrual or cash basis accounting?"
Some freelancers may only work with one method so it is important to understand which accounting method you use in order to communicate this to the bookkeeper.
"Do you work with a CPA to file your taxes?"
If so, it is important to either find a virtual freelance bookkeeper or virtual service company that is comfortable communicating and working with your CPA during tax time to ensure that they have all of the information and documentation they need to properly and accurately complete your taxes.
"What bookkeeping software do you use?"
The most popular types of bookkeeping software available today are Quickbooks, Xero, and Freshbooks.
It is important to know what software you use to ensure that the person or team you hire also works with that specific accounting software.
What is a Virtual Bookkeeper: Conclusion
A virtual bookkeeper is someone that remotely handles all of the bookkeeping duties for your business.
Remote bookkeeping is carried out using cloud-based accounting software that allows the business owner and bookkeeper to access the same files from completely separate locations.
When choosing a virtual bookkeeper you have two main options: hiring a freelancer or hiring a dedication online bookkeeping service, such as Noon.
Traditionally, local businesses would have no other option but to work with a local bookkeeper in order to physically hand off their financial records and communicate face-to-face.
However, with advancements in accounting software and online communication methods, business owners are now able to work with any virtual bookkeeper in the world.
How Noon Can Help Your Business Thrive
Noon Bookkeeping is an outsourced bookkeeping and accounting solution for business owners consisting of a team of CPA's and certified, expert bookkeepers ready to help you organize the finances of your business.
Noon can handle all of your bookkeeping in one place so that you can focus on running and growing your unique business knowing that we’ve got your finances handled.
Learn more about how Noon can help you take control of your finances.