A virtual bookkeeper provides services remotely, meaning that they do not have to physically go to an office. Going virtual is popular even among entrepreneurs these days, so hiring a virtual bookkeeper makes a lot of sense. And with the pandemic stirring things up, virtual setups such as work from home or in coworking spaces are much more common and desirable. Moreover, businesses are looking to cloud-based solutions to replace local ones. Hiring a virtual bookkeeper give you more flexibility and lowers your costs, too.
Now that virtual bookkeeping is becoming the norm, choosing the right service is important. EcomBalance is just what you might need. We specialize in virtual bookkeeping that provides accurate financial reports to help you stay on top of your numbers.
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What Is a Virtual Bookkeeper?
A virtual bookkeeper today usually works from home (meaning anywhere they can use a computer and connect to the internet), or from their own private office space. This is different from the traditional setup where a bookkeeper would physically go to a client’s business location to do their books.
That’s not the only difference there is, though. A virtual bookkeeper is probably more likely well-versed in a number of accounting and bookkeeping software solutions, including cloud-based tools. This is because a virtual bookkeeper will be used to computerized or internet bookkeeping software for recording financial transactions, updating statements, reconciling accounts, and even processing payroll and monitoring cash flow.
Key Services Offered by a Virtual Bookkeeper
Here are some key services virtual bookkeepers offer:
Financial Reporting
This service is at the core of bookkeeping, as financial reports such as balance sheets, income statements, and cash flow statements are needed to understand a business’s financial position.
Bookkeepers can customize these reports according to your needs and present a forecast of your finances.
Catch-Up & Cleanup
If your business is behind on books, you can avail of a catch-up bookkeeping service by a virtual bookkeeper, where they review and reconcile prior months’ transactions.
They’ll update all your books and handle any unprocessed bills to ensure your financials are accurate.
Financial Records Management
Bookkeeping is about recording daily financial transactions and categorizing income and expenses. This is a basic service that a virtual bookkeeper can provide a business.
This also includes recording details about accounts payable and accounts receivable.
Payroll Processing
Processing payroll can be tedious work for a business owner. However, you can offload this task to your virtual bookkeeper.
It includes calculating wages and deductions and processing employee payments. Filing payroll taxes and managing direct deposits are other extensions of this service.
Tax Preparation & Compliance
Tax season can be overwhelming, and if you can get professional help, tax filing becomes easier. A virtual bookkeeper organizes your financial records for tax filing.
They prepare and file sales tax returns, coordinate with tax professionals, and ensure compliance with tax regulations.
Budgeting & Financial Planning
Since virtual bookkeepers manage the finances of your business, they’re the best people to assist you with budgeting and financial planning.
They help you analyze past data, identify the changing trends, and forecast future revenues and expenses. They can provide you with cost-cutting and saving strategies.
Software Setup & Integration
If your business isn’t already using bookkeeping software, a virtual bookkeeper can help set it up and manage platforms like QuickBooks, Xero, and others.
Under this service, they can integrate financial tools, like payment processors and e-commerce platforms, to automate financial processes.
Advisory & Support Services
In addition to helping you with your budget, they can offer financial insights and explain best practices for growing your business.
They can do this by virtual consultations and providing support when needed.
How Does Virtual Bookkeeping Work?
A virtual bookkeeper must have remote access to all pertinent financial documents. This usually means sending over soft copies like snapshots of physical receipts or PDFs of bills and invoices. They also need access to whatever tool a business is using to record financial data. This can be on a local server, but better yet, cloud-based software that can be updated in real time.
The bookkeeper will also need to work only on secured computers, networks, and internet connections. This is necessary to protect client data. This usually means working from home or a private office. Cloud-based accounting software like QuickBooks Online will have security features, but it’s better to be safe than sorry.
Why Hire a Virtual Bookkeeper?
Hiring a virtual bookkeeper is more cost-efficient and flexible than hiring in-house. Even if you’re not hiring an exclusive full charge bookkeeper, an agency providing services in your local area will charge a lot more than an outsourced solution.
Here are more reasons why a virtual bookkeeper could be just what you need:
- Cost-Saving: Virtual bookkeepers work remotely, so they don’t require office space, employee benefits, or additional overhead costs.
- Flexibility: Virtual bookkeepers work on your schedule, which makes it convenient for you. They can easily adjust to your scaling business without any difficulties as well.
- Efficiency: Virtual bookkeepers use cloud-based tools to handle tasks more efficiently, and their up-to-date reports allow you to gain better insight into your finances.
- Access to Skilled Professionals: With outsourced bookkeeping, you can choose from a wide range of bookkeepers specializing in areas such as e-commerce, real estate, and healthcare.
- Secure & Reliable Service: Virtual bookkeepers use encrypted platforms that protect your sensitive financial information. Their cloud-based operation also allows you to access your records anytime you need.
Qualities to Look For in a Virtual Bookkeeper
Before hiring a virtual bookkeeper, you need to consider many factors. Since they’ll be managing your financial records remotely, you need someone you can trust and who is also skilled.
Here are some essential qualities to look for before hiring:
- Attention to Detail: Being detail-oriented and paying attention to every small transaction is important for accurate bookkeeping. Having this quality ensures that they can spot errors, track missing data, and reconcile accounts efficiently.
- Trustworthiness & Confidentiality: When you’re entrusting someone with your sensitive information, they should follow ethical accounting practices and use secure systems to protect your data.
- Industry Experience: Your business needs might not match those of other industries, so you need a bookkeeper with experience in your niche for better results.
- Strong Communication Skills: Since you have less access to your virtual bookkeeper, their communication needs to be strong. They should be able to explain financial reports that are easy to understand and be available to answer any questions.
- Tech Savvy: Virtual bookkeeping is largely operated on digital platforms, so your bookkeeper needs to be proficient in cloud-based accounting software to streamline your operations.
- Adaptability: An able bookkeeper should be flexible and adaptable to different bookkeeping systems, processes, and business models based on your needs.
- Time Management: Financial record-keeping tasks, like payroll, tax filings, and financial reporting, as well as work on deadlines. A bookkeeper should be able to manage their time efficiently to ensure your records are always up-to-date.
- Analytical skills: Apart from recording transactions, a bookkeeper must know how to analyze financial data to identify trends, risks, and opportunities to help you grow your business.
Virtual Bookkeeping vs Local Bookkeeping
Hiring a virtual bookkeeper means that you will always pay less because they don’t have to pay as much to rent their virtual offices. Most will actually work from home, so they are not going to be charging higher to cover building maintenance fees or furniture, either. What you get is better technology and services because what you pay goes straight to the virtual bookkeeper, minus the usual essentials like taxes. You will also be able to draw from a much larger talent pool of applicants. This is because a virtual bookkeeper can work from anywhere in the world.
Top Virtual Bookkeeping Companies
The right bookkeeping firm can keep your financial data in order and compliant, saving your business a good amount of time, money, and stress.
Here’s a list of some of the best bookkeeping companies in the industry:
1. EcomBalance
The virtual bookkeeper team at EcomBalance specializes in eCommerce and provides services catered to specific business needs. The owners and team are experts in the eCommerce space. Their process is reliable, simple, and easy to build on. The eCommerce bookkeeping team they work with are in active communication with businesses. This means daily emails or calls if needed. These virtual rock stars are proactive to avoid potential problems. They also analyze reports and even share insights and feedback that will help you to improve your financial operations and profitability.
So, if you want a virtual bookkeeping service that goes beyond bookkeeping to help you manage your financial operations, sign up with EcomBalance today.
2. Pilot
Pilot gives startups and growing businesses dedicated accounting, finance, and tax services. You can have peace of mind about managing your finances properly, knowing you can reach the growth objectives you set. This is because you will get strategic finance support, which includes features like forecasting and even fundraising. This way, you can run the business while seeing your finances clearly. Pilot Tax experts help you stay on track by making sure you stay ahead of deadlines and making tax filing super easy.
3. Xendoo
This team boasts of being dedicated to your business success. Xendoo will take care of all the annoying parts of bookkeeping so you can focus on earning more money. And you get this without increased stress or spending more of your precious time. Xendoo gives you access to reliable tech and a dedicated virtual bookkeeper. You can start using the tool for free and still get the team’s 24/7 support to make sure you are tax-ready at all times with up-to-date and accurate financial reports.
4. Bench
This team is composed of small business experts. They take care of importing your bank statements and preparing whatever financial statements you need every month. Bench bookkeepers work in-house, so you can meet with them any time. The Bench Client Research Team gives you intelligent answers to complicated questions. You also get visual reports that help you see what’s going on at a glance. This helps you get the actionable insights you need to grow the business. You can upgrade as needed to get more than what you need for basic tax filing.
How to Choose the Right Virtual Bookkeeper for You
Finding the right virtual bookkeeper isn’t just about credentials; it’s also about finding someone who can fit your business needs and workflow. Here’s how you can choose the right fit yourself:
- Identify Your Needs: Before you begin your search, understand what you need from them, like basic bookkeeping or advanced services. Do you need ongoing services or merely catch-up bookkeeping? This will help you narrow down your search.
- Seek Experience & Certifications: Industry experience indicates that they know how to deal with financial nuances and can tackle any issues. Certifications from known authorities are additional proof of their expertise.
- Assess their Technological Skills: Check if they can work with cloud-based accounting software and automation tools.
- Prioritize Trust & Security: Make sure they follow strict data security protocols and use encrypted platforms for sharing financial documents.
- Check Communication & Availability: You need a bookkeeper who responds to your emails or messages and provides regular financial updates. They should also be able to explain reports in clear and simple terms.
- Compare Pricing & Service Packages: You’re opting for a virtual service so that you don’t have to pay as much, so making a comparison is essential. Some bookkeepers charge by the hour, and some have fixed monthly rates. Understand what best suits your needs.
- Read Reviews & Ask for References: Before finalizing a bookkeeper, make sure to read their reviews, and don’t hesitate to ask for references from their previous clients.
How Much Does a Virtual Bookkeeper Cost?
As with all things outsourced, the price you pay for a virtual bookkeeper will depend greatly on factors such as their location, their level of expertise, and their specific responsibilities.
That being said, let’s look at some prices across nations:
- Average hourly charges for the US range between $19.71 and $27.64.
- Filipino bookkeepers charge around $5 to $15 per hour.
- Across Asia, the price varies from $27 to $730 per month.
If you want a full-charge bookkeeper, you will need to pay about $3-$8 extra per hour.
However, if you want someone who can do more of an accountant’s work, you could be looking at $50 or more per hour.
When Is the Right Time to Hire a Virtual Bookkeeper?
If you are already strapped for time, then this is a sure sign that it’s time to hire a virtual bookkeeper. This is especially true if you have already fallen behind on tax filings and it stresses you out to even think about updating the books. If your accountant is also unhappy and you’re wanting time trying to figure things out, think about how much your time means and invest in a virtual bookkeeper.
Finally, if you’re not seeing an increase in profits, a virtual bookkeeper can explain the story that your numbers are telling so you can identify issues and opportunities like how to optimize cash flow and decrease operating expenses.
Tips for Working with a Virtual Bookkeeper
Hiring a virtual bookkeeper should contribute to your business’s success. To make the most out of your partnership, it’s important to follow some best practices.
Here are some essential tips to ensure a successful collaboration:
- Set clear expectations, like defining their roles in the business, providing achievable deadlines, and establishing communication methods upfront to avoid misunderstandings.
- Schedule weekly or monthly review meetings to ensure alignment on financial updates and any potential issues.
- Stay organized by keeping track of receipts, invoices, and tax documents to avoid delays.
- Grant account access, but if you want to provide view-only access to necessary accounts for security, implement that beforehand.
- Treat your bookkeeper as a partner to create a strong relationship that will lead to better output.
- Regularly review reports to understand P&L statements, balance sheets, and cash flow reports.
Frequently Asked Questions (FAQs)
Here are some commonly asked questions to help you better understand virtual bookkeepers:
Is Virtual Bookkeeping Secure?
Yes, virtual bookkeeping is secure when proper safeguards are in place. Professional bookkeepers use encrypted software, secure cloud storage, and strict data protection protocols to protect your financial information.
You can also enhance security by granting limited account access and using multi-factor authentication.
Do I Need to Provide Any Software to Work with a Virtual Bookkeeper?
Not necessarily. Many virtual bookkeepers have their own preferred accounting software, such as QuickBooks, Xero, or FreshBooks.
However, if you already use a specific system, discuss it with them to ensure compatibility. Some bookkeepers may also ask you to pay the subscription cost for that software.
Can I Switch from an In-House Bookkeeper to a Virtual One?
Absolutely! Transitioning is easy with a good bookkeeper. They can guide you about transferring financial records and grant software access for a smooth handover.
You just need to set clear expectations with them.
Conclusion
Hiring a virtual bookkeeper is always a good idea when it saves you precious time, preserves your relationship with your accountant, keeps your books clean, and helps you make smarter business decisions. Virtual bookkeeping is a more efficient and convenient solution for all kinds of businesses and nonprofit organizations.
About EcomBalance
EcomBalance is a monthly bookkeeping service for eCommerce companies. EcomBalance handles your bookkeeping and sends you a Profit and Loss Statement, Balance Sheet, and Cash Flow Statement by the 15th of each month. EcomBalance also has a sister company, AccountsBalance, that caters to agencies, software companies, coaches, and other online companies.
