In 2023, nearly one-third (28.2%) of employees have a hybrid work schedule that combines remote and in-office work each month, and a full 12.7% work remotely full time. It’s a trend that isn’t likely to be reversing soon, with an estimated 32.6 million Americans expected to be working fully remotely by 2025.
Today, companies across every industry are leveraging remote working arrangements to fill a variety of roles, from sales and marketing to customer support and IT. But those aren’t the only departments that can benefit from flexible, cost-effective off-site work. Virtual bookkeeping is an emerging trend hundreds of thousands of small businesses are already leveraging — with even more companies transitioning to remote accounting every year.
Outsourced virtual accounting and bookkeeping has become increasingly popular because it allows small businesses to manage their finances efficiently and effectively, while tapping into the best pool of talent — no matter where they live.
What is outsourced virtual accounting and bookkeeping?
Virtual accounting involves an experienced team of bookkeeping and accounting professionals dedicated to managing your business’s financial transactions, records and reporting from anywhere in the world.
Unlike traditional bookkeepers and accountants who are physically present in the office, and often use desktop-based accounting software, outsourced virtual accounting teams can access the information they need to record financial transactions, reconcile bank statements, manage accounts payable and receivables and prepare financial statements — all without stepping foot into your office. Plus, because these bookkeepers often work in teams, you can have multiple professionals overseeing your finances every month, further increasing the accuracy of every statement, transaction, and report.
How does outsourced virtual accounting work?
Any small business can partner with an online bookkeeping service by contracting an external accounting firm or outsourcing agency. The process starts with comparing virtual accounting providers to find the agency that matches your needs, goals, and budget. Once you’ve selected a bookkeeping partner, they’ll work with you to set up the necessary cloud-based accounting software and online tools needed to store your data in an accessible place. With your system tailored to your business and configured to optimize your financial processes, the team will then train you and your key employees on how to use the accounting software and get the most out of your partnership.
While traditional bookkeepers can sort through physical receipts and invoices, virtual bookkeepers need every datapoint from bank statements, invoices, receipts and other financial documents in one virtual place. That’s why many virtual bookkeepers require their clients to use specific tools and software to gather the necessary information.
Cloud-based and online accounting tools allow both you and your virtual bookkeeping service to access financial data anytime, anywhere, without compromising the security of the data. Once uploaded, your virtual bookkeeper can then perform regular accounting tasks, like reconciling bank statements and preparing financial statements from anywhere in the world — improving your small business’ efficiency and bottom line.
What are the benefits of online bookkeeping services for small businesses?
Hiring a full-time, in-house bookkeeper can be a significant expense for your small business. Not only is their salary a big added cost, another full-time employee means higher health insurance costs, payroll taxes and office expenses. Plus, hiring, onboarding and training new employees can be a big time burden.
Online bookkeeping services can be a more affordable solution for small businesses because they reduce the overhead needed to staff this key role. By only paying for the services you need, as you need them, you can focus your finances on other key roles without sacrificing your books.
Another benefit of outsourced virtual accounting is the added flexibility these services offer. As your business grows, your bookkeeping needs will evolve from simple data entry and reporting tasks, to more advanced and complex financial analyses. An outsourced virtual bookkeeper can provide necessary services at each stage of your business’ growth, while scaling as your needs increase.
There’s one more benefit of partnering with an outsourced virtual accounting and bookkeeping team that’s often overlooked: Continuity of service. If you have a full-time, in-house bookkeeper, when they take a vacation or leave your organization, their deep knowledge of your systems and processes goes with them. If you only have a single bookkeeper, or a small team of accountants, that knowledge loss can significantly impact your operations while you hire a replacement — compromising your finances and slowing your growth.
On the other hand, when you have a full virtual bookkeeping team on your side, even if a single bookkeeper is unavailable, another trained professional is always in place and ready to take over. That continuity is crucial for maintaining accurate and up-to-date financial records, especially when tax and reporting deadlines loom.
Virtual bookkeeping services can be a cost-effective, flexible and secure solution to your ongoing finance and accounting needs. The right outsourced accounting team can streamline your reporting processes, accelerate your monthly close process, improve the accuracy of your books, and help your company stay compliant — all without increasing your small business’s overhead or staff count. With the growing trend towards remote work over the coming years, expect virtual bookkeeping — and other back-office support services — to become even more mainstream and affordable.
Want more? Escalon has helped thousands of small businesses maximize their potential with efficient back-office solutions for accounting, bookkeeping, HR, payroll, insurance, and recruiting and taxes — and we can help yours too. Talk to an expert today.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.