Your accountant doesn’t have to be physically present for your business to benefit from their expertise. Modern technology makes virtual accounting an excellent alternative. It analyzes your accounts remotely and updates them appropriately.
Virtual accounting also works if there’s a significant distance between your preferred accountant and your business premises. Some individuals and companies choose this option because it’s more convenient. So long as you grant remote access to your server, financial documents, and accounting software, your virtual accountant can work quickly and efficiently.
Services Appropriate for Virtual Accountants
Professional virtual accountants are tech-savvy. They’re conversant with your accounting software, cloud computing applications, and associated teleworking tools. They also have excellent communication skills, making it easy to outline ideas, requirements, and deliverables in a remote setup. The best virtual accountants perform their duties without needing constant follow-ups. Their services include:
- Bookkeeping: It helps you manage your business better by categorizing your transactions and preparing the necessary financial statements.
- Account reconciliation: Your virtual accountant will make regular entries about your bank account into your accounting software. Other than reporting cash transactions, they’ll match your bank balances to financial statements. They’ll also reconcile checks, deposits, and cleared transactions.
- Payroll processing: You’ll receive accurate data to help your business calculate and administer employee remuneration.
- Financial analysis and statements: A virtual accountant can help you compile cash flow reports, trial balances, balance sheets, and other documents. These give you a snapshot of your company’s financial health.
- Accounts payable and receivable: As your business expands, it becomes harder to keep track of debtors and creditors. Virtual accounting identifies, organizes, and enters this data into your software system. This real-time information is accessible to you whenever you need it.
- Tax preparation: After consultation via video conferencing, you’ll complete a questionnaire providing more information on your tax status. When the relevant financial documents are uploaded, your virtual accountant will proceed with tax preparation. Once done, they’ll schedule another consultation before submitting your returns.
- Reporting: Accurate bookkeeping allows your virtual accountant to compile valuable weekly, monthly, quarterly, and annual reports. They include a summary of accounts payable and receivable, profit and loss statements, payroll reports, and bank transaction lists.
Is Virtual Accounting Secure?
As a businessperson, security is understandably one of your biggest concerns. Can someone access sensitive financial data without your knowledge? The good news is that virtual accounting solutions incorporate state-of-the-art cybersecurity features. The most dependable cloud accounting platforms have a secure sockets layer (SSL) certification.
Other than password protection, this technology utilizes firewall-protected servers as well as high-grade encryption standards. Additional security features are privacy protection and regular data backups across multiple locations. Compared to physical files, it’s harder for unauthorized entities to access your cloud-stored financial data.
Should You Choose Virtual or Traditional?
With traditional accounting, you hire an in-house accountant and give them an office or workstation. Other than a salary, you also have to cover associated expenses such as medical insurance. You might feel short-changed covering these costs, especially when the accountant is not busy. Virtual accounting solves this issue by outsourcing to a professional without the added burden. Its benefits include:
1. Reduced overheads
Most virtual accounting platforms charge a flat fee for their services. You avoid the costs associated with traditional accounting, such as recruitment costs, sick leave pay, payroll taxes, and employee benefits. These services are also available year round.
2. Flexibility
You can utilize virtual accounting only when you need it, such as during tax season and when applying for financing. This flexibility gives you the confidence to run your business without stress.
3. Greater efficiency
Other than lower costs, virtual accounting services use minimal paperwork. Electronic correspondence reduces bureaucracy, which saves time and improves overall organizational productivity.
4. Affordable access
You’ll enjoy the expertise of the most qualified accountants at a fraction of what you’d pay if you employ them in-house.
Because you can log into your virtual account any time you wish, you’ll always be up to date on the state of your business. You can use this data to make business decisions that will result in long-term growth.
The Future of Virtual Accounting
Although most people still prefer one-on-one relationships, the virtual economy keeps growing in popularity. More businesses are bound to adopt virtual accounting due to improved internet services, cybersecurity, cloud computing, and communications tools. As a business owner, your survival depends on increasing productivity, sales, and efficiency while reducing costs.
If virtual accounting gives you an edge over the competition, it’s advisable to make it one of your business management strategies. Are you utilizing virtual accounting or exploring it as an option? Please share your experience in the comments section.