What You Need to Know About Virtual Bookkeepers
Written by Bindi Gethen
You probably run a business…
You’ve got money coming in, bills to pay, maybe some staff, and definitely a ton of financial details to keep track of. Traditionally, you’d have a bookkeeper come to your office, sit down with piles of receipts, invoices, and bank statements, and sort all that out for you.
That’s not exactly the norm anymore. A virtual bookkeeper can do all that remotely. They’re not in your office per se; they could be miles away, sitting in their home office, a coffee shop, or anywhere they have a computer and an internet connection.
So what does a virtual bookkeeper do? A virtual bookkeeper, like their brick-and-mortar counterpart, handles your finances but in a digital sense. They record transactions, keep track of invoices and expenses, balance the books, and provide financial reports. However, they do all this remotely via cloud-based accounting software.
This setup is convenient, especially for small businesses or solo entrepreneurs who might not have the space or resources for an in-house bookkeeper. Plus, it’s often more cost-effective. You get all the expertise without needing extra office space or equipment.
What does a virtual bookkeeper do
A virtual bookkeeper is like a traditional bookkeeper, but they work remotely, often from home or a personal office. Their main job is to manage financial records for businesses or individuals. Here’s what they typically do:
Record transactions: They keep track of all financial transactions (e.g., sales, purchases, payments, receipts).
Reconcile bank statements: Each month, they make sure the company’s bank account records match what’s in the bookkeeping software. This helps catch any errors or discrepancies.
Manage payroll: If your business has employees, the virtual bookkeeper might offer payroll services, ensuring everyone gets paid the right amount and on time.
Prepare financial statements: They create reports like balance sheets and income statements. These reports are crucial for understanding the financial health of the business.
Budgeting and forecasting: Some virtual bookkeepers also help with planning the business’s finances, like setting budgets and predicting future income and expenses.
The cool thing about being virtual is they can work for clients anywhere in the world, as long as they have internet access.
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Benefits of virtual bookkeeping services for a small business owner
1. More cost-effective than employing in-house
Hiring an in-house bookkeeper can be a pricey affair. You’re not just paying a salary. You’re also dealing with benefits, taxes, office space, equipment – not to mention the intangible costs of managing another employee.
Virtual bookkeeping services sidestep all these expenses.
They offer the same level of expertise and quality of service but at a fraction of the price. And for small business owners, every saved penny counts.
But the savings are just the tip of the iceberg. Virtual bookkeeping services also provide small businesses with unprecedented flexibility. They’re available at your beck and call, beyond the conventional 9-5 hours, ready to handle any bookkeeping emergencies that might arise. You’ve got someone who’s as committed to the financial health of your business as you are.
2. Flexibility and scalability
You no longer have to worry about outgrowing your current bookkeeping solution or paying for resources you’re not utilising. With virtual bookkeeping, you can scale services up or down to match your business’s ebb and flow.
So whether you’re expanding your business or navigating through a slow period, your bookkeeping adapts in real-time.
Pro tip
Good virtual bookkeepers employ robust security measures, such as end-to-end encryption and two-factor authentication, to protect your sensitive data.
3. Up-to-date financial transactions via cloud accounting
Remember those days when you had to manually enter transaction records or reconcile bank statements? I wish those days are way past you.
Picture this: a customer makes a purchase through your online store. The moment that transaction is completed, it’s recorded in your cloud-based ledger. There’s no need to manually enter the transaction later or match it up with a bank statement – it’s all done automatically and instantaneously.
The same goes for expenses. Whether you’re ordering supplies, paying utilities, or covering payroll, each outgoing payment is logged and categorised right when it happens.
With cloud accounting, every transaction is updated in real-time. There’s no lag, no piles of receipts, and no headaches. You can see how much money you’re bringing in, where it’s going, and what your profits look like at any given moment. No waiting. No estimates. No paperwork cluttering your desk or filling up your storage.
Just think about the time you save, time that you could instead invest in growing your business.
4. Easier reporting and tax compliance
Tax compliance isn’t just about paying your dues. It’s about understanding the evolving legal landscape, interpreting complex tax laws, and applying them accurately to your business transactions. It’s about making strategic decisions that can legally reduce your tax liabilities.
With virtual bookkeeping, you’ve got an expert in your corner. For Australian small business owners, in particular, they’ll be able to adapt to the ever-changing regulations of GST, PAYG, fringe benefits tax, and income tax, among others.
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Frequently Asked Questions
Virtual bookkeeping services can be a game-changer for any business, especially those that operate with lean teams or have a significant online component. These are just some industries that can greatly benefit from these services:
E-commerce: Online stores deal with a high volume of transactions, diverse payment gateways, and international currencies.
Startups and tech companies: These businesses often move quickly and may not have the resources for a full-time, in-house bookkeeper.
Consulting Services: Consultants, whether in marketing, management, or other fields, usually focus on client projects and may lack time for day-to-day financial management. Virtual bookkeeping can free them up to focus on their core services.
Creative industries: This includes graphic designers, writers, artists, and photographers, who often prefer to focus on their creative work rather than on financial management.
Small retail businesses: For small shop owners, balancing the demands of running a store and managing finances can be challenging.
Freelancers and solopreneurs: Individuals running their own business need to focus on their work and client acquisition, making virtual bookkeeping a convenient solution for managing their finances.
Healthcare practices: Doctors, dentists, and other healthcare professionals can benefit from virtual bookkeeping to manage patient billing, insurance claims, and other financial aspects of their practice.
Non-profit organizations: These organizations often operate with limited staff and budget, making a cost-effective virtual bookkeeping service a valuable asset.
Legal services: Law firms and solo practitioners can benefit from virtual bookkeepers to manage client funds, billing, and operational expenses.
First off, be clear about what you expect from your bookkeeper. Do you need someone just to manage daily transactions, or do you need more in-depth financial advice and tax preparation? Do you prefer hourly or monthly fees? Are you looking to scale?
Second, always check reviews and references. Do not skip this step. Hearing from others who’ve used their services can give you a good idea of what to expect.
Lastly, get a vibe check. Just because they’re virtual doesn’t mean you skip the interview. Ask about their experience. Talk about problems they’ve solved. Gauge if you’ll work well together.
One of the biggest advantages is cost savings. With a virtual bookkeeper, you typically pay only for the time they work or for specific services, which is often more budget-friendly than hiring a full-time employee. Plus, you save on overhead costs like office space, equipment, and benefits.
You’re also free to concentrate on growing your business. Instead of spending time on the nitty-gritty of financial record-keeping, you can focus on strategy, marketing, product development, and other core activities.
Initially, you’ll discuss and establish the preferred modes of communication, frequency of updates, and specific reporting requirements. This setup is crucial to ensure both parties are on the same page.
Most virtual bookkeepers use a variety of digital communication tools. This can include email, phone calls, video conferencing (Zoom, Skype), instant messaging apps (WhatsApp, Slack), cloud-based software (Google Drive, Dropbox), bookkeeping software (Xero, Quickbooks), and project management tools (Trello, Asana).
Regularly scheduled calls or video conferences can be arranged for updates, reviewing reports, or discussing any financial matters. These could be weekly, bi-weekly, or monthly depending on your business needs. It’s a good idea to agree on expected response times for different types of communications to ensure timely interactions and resolutions.
Turn over your books to The Bookkeeping Studio
Opting for virtual bookkeeping services not only offers you cost savings and efficiency, but also grants you the freedom to focus on the tasks you actually want to do. Don’t lie. Spreadsheets, taxes, and red font colours aren’t everyone’s cup of tea – if they are, you are one-of-a-kind.
At The Bookkeeping Studio, we pride ourselves on our professionalism and dedication. Our team comprises highly skilled, qualified individuals who are well-versed in every industry, software, and best practice. We’re committed to taking the financial management management tasks off your plate. Turn over your books to The Bookkeeping Studio today. Your peace of mind is just one decision away.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
Not to toot our own horn, but we can assure you that you won’t find a bookkeeping partner like us anywhere else in the Southern Highlands.
