Defining Virtual Bookkeeping and How is Works
This method allows the bookkeeper to work remotely from anywhere instead of working at the client’s office. Advanced computerized software which are cloud-based is used to provide the services. This information is easily accessible as it seamlessly syncs with the cloud and is constantly updated by the virtual bookkeeper meaning you can access it any time and from anywhere.
- The business grants remote access to the bookkeeper or accountant to their server, software and all the financial documents.
- The accountant or bookkeeper is provided read-only access and can categorize the transactions. The payments will be processed only on approval from your end.
- The software must be purchased by the business owner or the bookkeeper/accountant depending on the arrangements they have and register.
- The customization in the software must be made so that it ideally fits your requirements. However, the same program has to be used on both ends for a seamless process.
- You can easily get in touch with your virtual bookkeepers regarding the service or to get feedback and advice on tax strategies and more.
What a Virtual Bookkeeper Can Do for Your Business
Once you know how virtual bookkeeping works and the features that make virtual bookkeepers so popular, it’s time to understand how they can help you specifically. Here’s what these financial professionals can do for your business.
Reconciliation of Bank and Credit Card Transactions
Reconciling monthly bank and credit card statements and reviewing your general ledger accounts at regular intervals is essential to detecting errors or fraud and ensuring the accuracy of transactions. With help from a virtual bookkeeper, all data will be reconciled regularly with monthly statements so you can find any discrepancies in your bank and credit card balances.
Management of Accounts Payable and Accounts Receivable
A virtual bookkeeper manages your accounts payable and receivable efficiently. They organize your bills by their due dates, prepare an updated report of what needs to be paid, and send invoices (and present them for payment). They’ll also follow up on payments and make collection calls on your behalf, so you stay stress-free.
Liaison with Your CFO
Your virtual bookkeeper acts as a liaison with your CFO. They will also coordinate with your accounting team to ensure that all bookkeeping and reports are as per set norms to produce accurate results. They can also act on your behalf and meet with the accountant about tax queries.
Maintenance of General Ledger
One of the most basic and crucial functions in a business is maintaining an accurate general ledger. Doing so helps you compile your key financial statements (including profit and loss, balance sheet and cash flow), evaluate profitability and liquidity, and gauge your business’s overall financial health. That’s where a virtual bookkeeper plays a vital role. They will make ledger entries, record expenditures and receipts, assign each entry to an appropriate account, and make sure records are error-free to enable accurate cash flow.
Payroll Support
The services offered by a virtual bookkeeper vary depending on the needs of your business. Some bookkeepers, for instance, fulfil payroll, especially for small businesses. This includes assisting with the processing of employee paycheques and tax payments so that your payroll process is up to date and your business complies with all payroll taxes.
Creation of Budgets and Forecasts
Although a virtual bookkeeper won’t create your budget, they can certainly help you do so by advising on how to improve your business. Since they prepare profit and loss (P&L) reports, balance sheets and closely observe your business’s finances, they know exactly how much money you’re earning or losing. This data is crucial for making forecasts and strategies.
Generation of Updated Reports
Curating your financial data is one of your virtual bookkeeper’s primary responsibilities. They will ensure prompt submission of weekly or monthly financial reports so that you always have the right financial data when you need it. As a result, you never have to put crucial financial or investment decisions on hold.
Virtual bookkeeping services are very popular these days for the flexibility and control they allow business owners over their finances. The above-mentioned features are what you can expect when you hire a virtual bookkeeper. They will help with many crucial tasks including bank and credit card statement reconciliation, general ledger maintenance, bill payments, and invoice generation and collection. Hopefully, this guide will make it easier to choose the most suitable virtual bookkeeping services and understand how they can help maximize your business’s productivity.
Even better, virtual bookkeeping services are able to provide general accounting services to small business owners at a fraction of the cost of traditional bookkeeping services.
A business owner can augment their business with a virtual bookkeeper rather than hiring an internal bookkeeper.
For a business owner, virtual bookkeepers are much more affordable and accessible and can be hired at a much lower rate.
Virtual accountants provide bookkeeping services to small business owners, individuals, and self-employed individuals.
A virtual accountant can provide financial reports, set up accounting software, perform bank reconciliations, and provide accounts receivable/accounts payable services on behalf of individuals or small business owners.
Working online is what sets virtual bookkeeping apart from a traditional accountant. In all other aspects, a virtual bookkeeper will provide the same services and have the same credentials.
Virtual accountants are able to provide clients with accounting services at a lower cost compared to regular accounting firms because they don't need to pay for overhead, such as large brick-and-mortar offices.
You should expect a virtual bookkeeper to be able to perform your virtual bookkeeping up to the same standards as an in-person accountant, or even higher.
The difference would be that meetings will likely happen with your virtual bookkeeper through video conferencing on software like Zoom.
A virtual bookkeeping service will usually switch you to online or cloud-based accounting software like QuickBooks Online or NetSuite. This ensures your financial transactions are always available. QuickBooks Online is one of the most popular accounting software for small business owners.
Your bookkeeping service will be able to review your financial transactions from anywhere in the world and be able to collaborate with you more effectively.
Small businesses have many basic bookkeeping tasks to handle. Virtual bookkeeper jobs can fill the gap for small businesses that would otherwise need to be filled internally. For small businesses that want virtual bookkeeping service to handle their basic bookkeeping tasks, the first place to look is online.
How do small business owners get started with their bookkeeping services? To get started with any accounting services, you should have available:
Your opening trial balance.
Existing customer list with receivables.
Existing vendor list with payables.
Stock in hand.
Fixed Asset register.