A virtual bookkeeper is just another example of how technology is rapidly changing the way we communicate and connect — both in our personal lives and business. From cloud-based software that allows users to access information from anywhere to modern communication tools that keep everyone on the same page, technology is making virtual work more possible than ever.
Entire industries are being changed by the ability to work virtually, including bookkeeping. Now, rather than visiting a client’s office, virtual bookkeepers can use cloud-based accounting solutions and other tools to manage your books more efficiently — and free up your time.
As the founder and managing partner of Moxie Bookkeeping, Ean Murphy has helped a lot of her client’s transition to working with virtual bookkeepers. We asked her for advice on how small and medium businesses can get started.
Bookkeeping in a virtual world
First, notes Ean, it’s important to understand how technology has changed the way businesses handle their books. Many day-to-day tasks like data entry and reporting have been automated by various applications. Now, rather than explaining to your bookkeeper what a specific expense is, you can simply tell the software — usually in less time.
This frees up your bookkeeper to do higher-level tasks like helping you create more streamlined accounting procedures and managing them remotely. “As a bookkeeper, I can be way more efficient virtually,” Ean says. “It allows me to touch the books far more frequently without having to run around, which just turns into cost savings for my clients.”
While some business owners may be uncomfortable working with someone who’s handling their financial information remotely, Ean notes that the increased transparency of cloud-based accounting software has actually created greater oversight for bookkeepers today than in years past.
“The key is in making sure there are checks and balances in place, and you’re not just handing over the keys to the castle,” says Ean. “You shouldn’t just be abdicating responsibility, but delegating responsibility so that there’s oversight, management, and accountability.”
When hiring a virtual bookkeeper makes the most sense
Small and medium businesses can choose to handle their books in a variety of ways. When thinking about hiring a virtual bookkeeper, Ean recommends business owners consider how much time they need. If it’s more than eight hours a week, hiring an administrative assistant to do light bookkeeping (data entry, reconciling against bank statements, invoicing, paying bills) may make the most sense.
Then, business owners can work with a CPA or bookkeeping firm to provide additional oversight for the assistant. “That way, instead of outsourcing the bookkeeping, you’re outsourcing the management of the financial department,” says Ean.
Oversight is a key aspect of outsourcing your business finances, whether you’re hiring an administrative assistant or working with a CPA or bookkeeping firm, says Ean. “The whole reason most people outsource their bookkeeping is that they don’t know anything about it, and they don’t feel empowered to do it themselves,” she says. “If you’re handing it over to someone who has no oversight and you are not providing that oversight, you don’t know how to notice if they’re making mistakes or committing fraud.”
Hiring a virtual bookkeeper
If you have never worked as a bookkeeper before, take time to understand your own business needs and expectations before beginning the search for a virtual bookkeeper. Start by making a list of all bookkeeping tasks you currently do and would like to delegate. This could include things like entering expenses, payroll, invoicing, reconciling business accounts, or doing taxes.
If you have worked with a bookkeeper before and want to streamline your own processes — or move to a smaller office where you don’t have to have a dedicated desk or computer for your bookkeeper — it’s a matter of knowing what you want to get out of the relationship. In both cases, a good virtual bookkeeper can help you identify technological solutions to help simplify or automate certain tasks, then work with you to take other tasks off your plate.
When you know what you want in a virtual bookkeeper, do the same due diligence you would when hiring another service provider. Talk to other people in your industry to get recommendations and baseline ideas of costs. Ean recommends getting quotes from several different types of bookkeepers: Agencies, freelance bookkeepers, CPAs, and online freelance marketplaces. That will give you the best sense of what is out there before making a decision.
Working with a virtual bookkeeper can save you money and make your business more efficient. Whether you choose to go with a boutique accounting firm, bookkeeping agency, or hire an individual CPA, now is a great time to consider how new technology can streamline your business’s bookkeeping system.