Virtual bookkeeping refers to the practice of maintaining financial records and performing bookkeeping tasks remotely, typically through the use of computer software and internet-based tools. This bookkeeping service includes tasks such as recording financial transactions, reconciling bank statements, preparing financial statements, and more. Such outsourced bookkeeping allows businesses to access bookkeeping services without needing a physical office or in-person meetings. This kind of bookkeeping service can be provided by individual bookkeepers or by bookkeeping firms with a virtual infrastructure and staff. Some bookkeeping software providers also offer virtual bookkeeping services through their software.
However, at the end of the day, virtual bookkeeping is just another form of outsourcing. And like all other outsourcing options, outsourcing virtual bookkeeping has its own steps. If you have been considering this option for your business, look no further. This article will discuss the essential virtual bookkeeping pros and cons that you need to consider before making a decision.
Benefits of Virtual Bookkeeping
There are several benefits of virtual bookkeeping for businesses
Access to a Team
When working with an in-house bookkeeper, you limit yourself to the expertise of that single person. This is one of the more significant aspects in the list of virtual bookkeeping pros and cons that you should consider. Unfortunately, for small businesses, hiring a team of expert bookkeepers is not a viable option. This is where virtual bookkeeping comes in.
By hiring a virtual bookkeeping team, you will get the support of people who have varying levels of experience and areas of expertise. Thus, you can easily ascertain which of them is the best for the work you need to get done. After that, you simply need to assign them to your account. In the end, virtual bookkeeping will help you avoid many bookkeeping mistakes and help streamline your financial recordkeeping.
Access to High-Quality Tools
Taking up any big responsibility in your company will also require you to provide the tools and technology needed for reaching those goals. If you hire a virtual bookkeeping service, they will have the responsibility of making the required software available. They will also have to keep everything regularly updated. So, you will not have to worry about building a bookkeeping infrastructure.
There Will Be an Expert in Your Team
Virtual bookkeeping services are highly experienced and proficient in their field. After all, these people spend all their time doing bookkeeping and know what they’re doing.
As a result, they are well acquainted with even the minute details of their profession. By staying competitive in their field, they will be able to improve their own skills every day.
Apart from this, they get a unique behind-the-scenes look at how their clients actually manage their businesses. Hence, they keep getting new knowledge and excellent practices which they can apply to get your job done while paying taxes.
You Can Save a Lot of Space and Money
Yes, this is one of the top motives for people to seek out bookkeeping software like QuickBooks or Xero. And it is entirely justifiable, nonetheless. Running a small business is all about managing your finances. Not only is it extremely difficult to hire the services of a full-time employee, but it is also expensive.
Apart from their salary, you could end up paying them more money for other things as well. This includes medical benefits, taxes, the infrastructure needed to do the job, and so on. Eventually, these costs can add up significantly.
If you hire a virtual assistant bookkeeping, you don’t have to worry about these factors anymore.
You will also not be responsible for their tax benefits or medical insurance. Apart from this, a staffing firm helps you save money by handling various aspects of the staffing process, such as soft skills reviews, technical skills evaluation, personal interviews, and candidate suitability.
Drawbacks of Virtual Bookkeeping
While virtual bookkeeping can offer many benefits for businesses, there are also some potential drawbacks.
The Lack of Insider Knowledge
The people at a virtual bookkeeping service are undoubtedly skilled and experienced. However, at the end of the day, they are not your employees or a substantial part of your company.
It would be unrealistic to expect them to have the same level of understanding about your vendors and customers as one of your actual employees.
You can, however, prevent potential problems related to this by introducing an approval process to the scheme of things. In this process, your bookkeeper must let you go through and approve documents first before they are sent out to your vendors or customers directly.
Compromised Data Security
If your bookkeeping service is from another location, you have no option but to use the internet to share private financial information with them. As you can imagine, that is not a desirable situation.
Usually, such companies are trustworthy and take adequate security measures to protect your information. However, there is always the risk of an experienced hacker accessing your financial data as soon as it moves beyond the limits of your company’s internal network.
So, you must have a proper conversation with your bookkeeping service regarding the safeguards they have incorporated to prevent such incidents.
Difficulties in Communication
Working with someone virtually has both pros and cons. A major logistical drawback of this situation is the inherent difficulty in communication.
An online conversation is no substitute for the experience of face-to-face interaction. A communication gap is very likely to arise, and erroneous expectations, incorrect assumptions, and unpleasant conflicts can manifest as a result and affect your accounts during tax season.
There are ways to avoid this situation, though. After such outsourced bookkeeping service, make sure you come up with a solid schedule and perform monthly check-ins right from the beginning. That will help you avoid miscommunication to a large extent.
5 Best Virtual Bookkeeping Services in 2023
Each virtual bookkeeping service offers slightly different services, benefits and features. review them carefully and choose the one that best fits your bookkeeping needs.
|Company||Overview||Best for||Bookkeeping prices||Trustpilot Reviews|
|NumberSquad||Virtual bookkeeping service, tax filing, full service payroll||Small businesses and Self Employed||Starting at $145||4.7 stars|
|Bench||Bookkeeping service and tax filing||Small and newly formed businesses||Starting at $245||4.4 stars|
|Pilot||Accounting, CFO, and tax services||Start-ups and growing businesses.||Starting at $499||2.9 stars|
|in Dinero||Tax, Finance, and Accounting||Growing start-ups and growing companies||Starting at $500||None|
|Belay||Virtual bookkeeping, service, financial reporting, optional payroll, invoicing||Churches, nonprofits, and other small businesses||Starting at $450||None|
|Bookkeeper360||Full-service virtual bookkeeping
platform, accounting, HR, and payroll
|Growing businesses and organizations||Starting at $349||None|
Virtual Bookkeeping Software
Virtual bookkeeping software refers to a type of software that allows users to manage their bookkeeping and accounting tasks remotely. This can include tasks such as invoicing, tracking expenses, generating financial reports, and reconciling bank accounts. Examples of popular virtual bookkeeping software include QuickBooks Online, Xero, and Wave. These software are often cloud-based and accessible from any device with an internet connection, a convenient option for small businesses and entrepreneurs.
A virtual bookkeeping service is an excellent option if you own a small or medium-sized business and need help with bookkeeping but cannot afford to hire an in-house employee.
There is a lot of demand for bookkeeping services these days and many options to choose from. However, you should do your research before choosing a bookkeeping service near you.
Consequently, it is your responsibility to research well and ask your potential virtual bookkeeping team relevant questions about their work and your requirements. After that, you can proceed to choose a bookkeeping service that will serve your company well.