If you are at the stage in which your startup needs a bookkeeper, the first decision to make is whether on-site or virtual. You may be familiar with virtual bookkeeping or have worked with one in the past.
While onsite bookkeeping can be a great option, startups may find it difficult to use. Virtual bookkeeping is a great option for your business because you have access to thousands upon thousands of accountants who can keep your books in order without ever having to leave your office.
What is Virtual Bookkeeping?
Virtual bookkeepers are just like the traditional on-site bookkeepers. They handle day-to-day financial tasks such as recording transactions, reconciling bank accounts and credit card accounts, processing payroll, and so forth.
A virtual bookkeeper works remotely via cloud-based software. Traditional bookkeepers must be physically present at your office to perform these tasks. Virtual bookkeeping can also be called remote or online bookkeeping. Virtual bookkeeping offers several key benefits:
Additional industry-specific accounting resources including experts who have experience in highly specialized verticals.
For data-driven decisions, you can get on-demand insight into financial metrics that are important.
You will receive more timely monthly, quarterly and annual reports.
You have access to a large team of CPAs, bookkeepers, and other professionals with industry experience.
It’s crucial to ensure that the person you hire to manage your business’ finances is reliable, accurate, and complete.
What financial functions can virtual bookkeeping perform?
Remote finance teams can manage all the day-to-day bookkeeping activities, as well as more complex accounting services such as financial projections and analysis, annual taxes, compliance, and other advanced accounting services. Remote bookkeepers can leverage the expertise of a team of financial professionals, as well as AI-driven software that automatically handles certain accounting calculations and activities.
Startups with venture capital funding might need to submit monthly updates in order to avoid falling behind. It is important to report accurately. However, if the business does not have in-office financial professionals who are familiar with monthly reporting requirements, they might have difficulty creating consistent reports. A local accountant might have extensive expertise in small business taxes but may not be familiar with R&D credits for venture-funded and seed-funded companies.
Who should use Virtual Bookkeeping?
Virtual bookkeeping is a great alternative to traditional on-site services for entrepreneurs and business owners. This is due to a large number of bookkeepers who are experienced and the flexibility that remote bookkeepers have in their work hours.
Virtual bookkeeping is possible if your staff is comfortable using online tools. Remote services can be especially beneficial for certain types of businesses:
Startups that are growing rapidly
The complexity and time required to provide bookkeeping support will increase as your business deals more with customers and financial transactions. Startups that are rapidly growing will need more time from their finance departments. Leaders must ensure that they maximize tax credits, R&D credits, and other programs that support future growth.
On-site bookkeeping is limited by the availability and space available in your office to accommodate new employees. Remote bookkeeping services are able to handle extra work when needed. There is no need to worry about hiring new staff or adapting your office space. Virtual bookkeeping services can expand to meet your business’ accounting requirements.
Startups with Unusual Business Models or Verticals
Bookkeepers who are familiar with financial reports (at least monthly statements, including Income Statement or Profit & Loss Statement, Balance Shee, and Cash flow Statement), as well as tax requirements specific to your industry, will be able to process your bookkeeping work quickly and accurately, making sure that you don’t leave money on the table. If your business is unique or a part of a niche industry, it can be difficult to find someone who has the right experience in bookkeeping. You can work with virtual bookkeeping businesses and have access to a greater number of finance professionals from around the globe. This makes it easier for you to find someone with experience in your particular bookkeeping area.
This is particularly beneficial for cryptocurrency start-ups or other organizations that have industry-specific reporting requirements. Virtual bookkeeping allows you to have access to experienced bookkeepers, so your business can receive the best guidance.
Startups in Various Locations
In-person bookkeeping professionals are not the best option if your business has many workspaces. A single bookkeeper covering all of your offices can lead to a lot of wasted time traveling, rather than spending time on the books. However, hiring a bookkeeper for each office is an expensive expense.
Virtual bookkeepers can handle all of your books remotely. This will give you one point of contact to manage your finances and provide you with a comprehensive picture of your business’ performance.