Is a Virtual Bookkeeper Right For You? Here's How To Find out and choose the best solution
So, you're thinking about hiring a virtual bookkeeper. Good for you! Letting someone else handle your bookkeeping, is a natural step in growing your business, no matter if you're an independent contractor or small business owner. It saves you money and frees up time to actually work on business!
With the recent rise of remote work, choosing an online bookkeeping service is tempting, especially if you operate an online business. Chances are, you're handling your finances digitally, even if you're just preparing expense sheets in Excel yourself.
Since your business is already online then heck, why not embrace the digital opportunities of the twenty-first century? If we learned anything in 2020, it's that remote work is beneficial for both business owners and employees.
Let’s explore what a virtual bookkeeper is and what it can do for you.
Is bookkeeping necessary?
Yes it is. Maintaining accurate records over your cash flow is essential for any business. The purpose of bookkeeping is to see where your money goes, track your invoicing, provide you with accurate records for tax purposes, and if you want to apply for a business loan well, the bank is going to need your financial reports too.
Keeping all of your financial records is a time consuming process, so many businesses opt for a bookkeeper to do it for them.
With that out of the way, let’s dive in.
What Exactly Is A Virtual Bookkeeper?
Unlike traditional bookkeepers, you won’t meet your virtual bookkeepers very often. That’s if you’ll ever need to meet them at all. They organize your finances remotely and get everything done online.
For Independent contractors and small business owners, hiring a virtual bookkeeper makes much more sense, than hiring a full-time or part-time bookkeeper.
You see, hiring a virtual bookkeeper saves you a lot of money. Compared to hiring an employee for your bookkeeping needs, a virtual bookkeeper doesn't require office space or supplies. Also, you save money on employee benefits, insurance, and payroll taxes. For small businesses, those are big savings.
In return, a bookkeeper organizes your finances a lot faster than you and in return free up your time to focus on growing your business.
A virtual bookkeeper can be one of two things:
- Independent contractor
- Bookkeeping Service
An independent contractor is a person who handles your bookkeeping remotely. They have access to see your financial activity, and use reliable software to organize your income, expenses and prepare your financial statements, and offer various financial services.
An online bookkeeping service is a subscription software that monitors your financial accounts and helps you organize your financial activity automatically. At Keeper Tax, there’s an accountant designated to your account, so you actually get the best of both worlds.
No matter if you hire a contractor or use bookkeeping software, there are benefits in outsourcing your bookkeeping.
Should You Use A Virtual Bookkeeping Service?
Let’s be honest for a second. Bookkeeping is a hassle. If you’re used to doing it yourself, you already know, and if you’re just starting out, you’ll find out soon enough.
If you’re doing your own bookkeeping you’re likely to experience some of these scenarios:
- Falling behind on your current bookkeeping and struggling to catch up.
- Doing taxes is stressful.
- Missing out on write-offs that you should be getting because not all of your expenses are documented.
- Not focusing as much on your business as you want, because bookkeeping takes up too much time.
- Paying your accountant a lot of money to sort your books out for you.
If you can recognize any of these scenarios, virtual bookkeeping services will be valuable to you.
What Can A Virtual Bookkeeper Do For You?
A virtual bookkeeper keeps you organized with minimum effort on your part. Just like a traditional bookkeeper, except you don’t see them. They fulfill all the bookkeeping duties such as catching financial mistakes, monitoring your accounts payable, accounts receivable, year-end reporting, organizing your write-offs, and calculating your business profits.
They provide you with a clear picture of where your money is going and create accurate profit/loss statements, balance sheets, and fulfill your bookkeeping needs. At tax season, your bookkeeper prepares your financial reporting and delivers them to your CPA with all the necessary documentation, making their jobs easier and saving you money.
What's It Like To Work With A Virtual Bookkeeper
Virtual Bookkeepers work offsite, meaning you don’t have to provide office space and supplies. If you hire a freelancer, they could work from the comfort of their home or their office space. And if you use a service, your financial transactions will be monitored by a personally assigned bookkeeper. At Keeper Tax, our team keeps an eye out on accounts to make sure no write-offs are missed and no mistakes are made. Simply, it is an effortless tax receipt organizer.
By using reliable accounting software to monitor your bank accounts, a virtual bookkeeper organizes your income and expenses in a timely manner and prepares all of the needed documents.
Depending on what service you choose, you can get a wide variety of bookkeeping tasks done, such as preparing financial statements, overseeing accounts payable, tracking expenses, and other financial activities.
Communication with your bookkeeper will be through the internet and calls, telephone, and email. The receipts for cash purchases related to your business must be scanned and uploaded for your bookkeeper to file. However, at Keeper Tax we connect directly to your credit card and keep track of all your expenses in real-time, so you don’t need to save your receipts for taxes.
When the tax season comes and the IRS comes to claim their share, your virtual bookkeeper will let you download organized financial records, so you can give it to your CPA or file your taxes yourself. If you wish to do things the easy way, you can let your virtual bookkeeper file the taxes for you, by either working with your accountant or letting yours.
How to choose a virtual bookkeeper
Does it sound like it’s the right choice for your business? Great! The next step to getting a virtual accountant is picking one. A good bookkeeper will save you a lot of money and free you from a lot of worries, so you must pick the right one for your business.
Here's a quick overview of what to look out for:
Look for their clients' testimonials and review. What do they say? The clients should be happy about the service they provide and in return give good ratings.
Do they have a website? Do they provide value on their website for their clients? Are they present on Social media? Those are good signs to
Knowledge Of Your Industry
An experienced bookkeeper in your industry will have a better understanding of your business and finances. This means they will do better at finding your write-offs and organizing your expenses.
Experience In Your Type Of Bookkeeping
Some virtual bookkeepers offer services of specific types of bookkeeping only. Whether you prefer cash or accrual, single or double-entry accounting, your bookkeeper must be familiar with your way of doing things.
Virtual Bookkeepers vary a lot in prices. If you hire a contractor, they might charge by the hour or month. This means you’ll pay more when you’re busy and less when things cool down. Virtual bookkeeping software will cost you a steady monthly fee, regardless of your bookkeeping needs. Keeper Tax costs $16 per month and since the average user saves an additional $2,000 per year, it’s safe to say that the money is well spent.
Maintaining your financial records and growing your business is a lot easier with the help from a virtual bookkeeper because when your business grows, so do your books. Virtual bookkeepers maintain your financial records all by themselves and get everything they need digitally. For you this means that you barely even have to think about it. Especially small businesses as well as independent contractors have the most to gain by hiring one, since it saves precious time and money.
If you're still on the fence, we get it. Trusting someone else with your books is a big step and there’s a lot to consider. At Keeper Tax, we offer a free 14 day trial upon signing up so you can evaluate and decide for yourself.