In modern times, due to the expansion of market and introduction of internet a new trend in accounting has emerged. This new trend is “Virtual accounting”.
Virtual accounting is an accounting system which allows qualified accountants to offer their services remotely i.e. services are offered without physically visiting the organization. In a virtual accounting system, communicates through phone, internet and other online application.
Apart from their physical availability, there is not much difference between regular bookkeeping services and virtual accounting services. A virtual accountant uses computerized bookkeeping software to post financial transactions, review and update statements and reconcile accounts.
The virtual accounting services allow companies to handle all of their accounting needs via a qualified accounting professional without having to hire another full-time staff member. The most company hires such virtual accountant on a contractor basis. This saves not only cost of the company but also makes the accounting process flexible.
How Virtual Accounting Works?
Due to expanding the reach of the internet and various software application the location constraint has been reduced tremendously. Thus for a virtual accountant to work, he needs to have remote access to the database of the company.
In doing so, the business provides the virtual accountant\bookkeeper remote access to its server, software and financial documents. The accountant then signs onto the company’s secure network from his computer at any other location and accesses the documents.
Both accountants, as well as the company, must use the same program and version to ensure proper transfer and communication of the files.
Under a virtual accounting system all data – documents and entries are maintained and managed on a cloud (online) software which enables you and your accountant to manage and update your data with no location constraints.
These cloud software can be accessed from anywhere and at any time as long as you and your accountant or any other required staff have requisite log-in and passwords.
What Does a Virtual Accounting Service Do?
A virtual account like any other traditional accountant does all the general accounting and book-keeping work. The lists of services which a virtual accountant provides are:
- The virtual account would enter all of the data and transactions from your bank and credit card accounts into your accounting software. Also, he would be responsible for reconciling the data to monthly statements and give you a true and fair view of your cash and credit positions.
- If your company requires and give authorization to the virtual accountant, then the accountant would be responsible for preparing and issuing invoices to your Customers
- The virtual accountant is responsible for entering all your expense bills. Once you approve which bills you would like to pay, they would prepare the payout entries for the same in the books for you.
- The virtual accountant is responsible for calculating your taxes. Ensuring all due dates are met with for all statutory deduction, payment and returns.
- The virtual accountant is responsible for working with your CPA and helping the CPA with any information required
- The virtual accountant if authorized by your company would be responsible to provide payroll support.
- The virtual accountant may offer consulting services as and when required.
- The virtual accountant is responsible for managing your accounting software and technology.
- A good team of the virtual accountant will take your current system and will streamline it and make it better.
- The virtual accountant would be responsible for creating weekly and monthly financial reports like cash flow statement, financial statement, profitability report, expense variance report etc.
Benefit of having a virtual accountant
1. Cost Optimization
The virtual accountant need not be the full-time employee; they can be hired on contractual basis. Hiring a person on contractual basis saves both time and money for the hiring process. Also as the virtual assistant is contracted personnel there is no need for payroll compliance and deduction which reduces the HR procedures.
You not only save salary cost but also save on overheads and other related costs like sick leave pay, payroll taxes, recruitment costs, employee benefits and other office equipment cost and expenses.By employing a virtual accountant, you can do away with the constant cycle of recruiting, training and managing on-site bookkeepers.
2. Business Optimization
Accounting and finance form the base of any business. It’s a very important task to track all income and expense for your business on daily basis. Once the virtual accountant takes care of the accounting part, you and your company can focus on your core business and aim at higher profitability.
Research has shown that companies that hire virtual bookkeepers have been more successful at growing their business, increasing revenue and reducing cost.
3. Enhanced Productivity
Managing paperwork can be a challenge in any business. Nowadays maintaining paper and documents is time-consuming and tedious work. Managing and securing documents can be a huge distraction to business which will eventually affect the productivity of the company.
However, by having a more efficient way of handling paperwork, through online services and the virtual account can enhance the productivity of the company.
One stop Information Centre
Your virtual accounting team provides one point-of-contact for all your questions, ideas and concerns for all your financial and accounting need. Your data is always accessible to authorized personnel through password-protected logins, and you can trust that the data accuracy and completeness all the time.
The virtual accountant would enable you to have real-time accurate financial reports anytime and anywhere, which will, in turn, help you and your company to take business decision efficiently.
5. Up-to-date with latest technologies
Using accounting software can at times be problematic as you may encounter software problems if you didn’t have proper knowledge about the system. You would also have to take frequent backups and regularly install upgrades.
The Virtual bookkeepers and accountant on other hand operates with the latest technology. These accountants are expert personnel on latest accounting software and technologies. If you hire this expert personnel, along with their expert knowledge; you get information on latest accounting software development.
This expertise and information will enable you to take decision accordingly for which software to deploy in your company. In today’s time, a few popular cloud accounting software are Xero, Quickbooks, MYOB and more.
6. Virtual Accountant is suitable for all size of business
Whether your company is small – medium or large, a virtual accountant is suitable for every size of business. Depending on your business size and requirement you can hire part-time or full-time virtual accountant who will tend to your business need as authorized and hired for.
Virtual accountants can hire on a need-basis. If your bookkeeping requirement is low then you can opt for a part-time virtual accountant and if your needs are more than you can hire a full-time virtual accountant.
7. Data Security
The Virtual accountant handles all data on cloud software and they are well trained on data security procedures. The virtual accountant employs all encryption techniques to ensure the financial data is secure. These accountants are the off-site accountant and thus leaking of any data due to misplacement of documents or any other mode is always out of question.
Also, your staff or members can access the financial information only if you grant them the permission and log in and password are shared. These checks ensure comparatively higher data security.
8. Trained Virtual Accountant
The virtual accountants are well trained and knowledgeable about ongoing accounting or technological changes. Due to advanced accounting knowledge and information, these virtual accountant helps to reach increase the level of quality of accounting functions and processes.
The expertise and experience association of virtual accountant with your financial accounting function will help you to streamline the process and would help you gain an unbiased perspective.
The times are changing and it’s time to change your accounting system. With a boom of cloud accounting software and lower and lower paperwork at the office, at times to move towards a paper-less accounting department.
A paperless financial department will not only streamline your accounting department but bring in many benefits like data security, real-time accurate data back every time and enhanced decision-making capabilities to you and your company.
In these scenarios, virtual accountant comes with a huge relief. The power of having an inexpensive, reliable, subject matter expert and always available virtual accountant or bookkeeper is a game changer and would help you gain an added business edge over the shortcoming of traditional accountants.
Keeping your company services and business requirement in your mind with limited cost constraints, you need to hire a virtual accountant who matches all your accounting and business need and requirements.