All you need to know about virtual bookkeeping

Virtual bookkeeping combines cloud-based accounting with remotely-working financial experts, making it a highly effective bookkeeping solution for small businesses at a fraction of the cost.

Let’s face it: Bookkeeping can be a drag. It’s a relentless demand on your time that could be far better spent on growth initiatives. But the tall pile of receipts, invoices, and financial transactions demanding your attention – as you struggle with being a small business owner with too much on your plate – only grows taller. 

You’re not willing to spend a budget on hiring an in-house financial expert or team either.

Hey, you’re not the only one struggling with financial management. It’s a daunting, time-consuming task that many small business owners find themselves ill-equipped to manage effectively. And yet, out of the 33.3 million small businesses in the United States^[1], 64% of business owners do their own bookkeeping ^[2]. 

But do they really have to? In an era where convenience is king, managing your finances shouldn’t be any more complex than ordering a pizza online. 

And it isn’t.

Thanks to virtual bookkeeping, which offers a seamless solution to this universal pain point.

What is virtual bookkeeping?

Virtual bookkeeping is a practical financial management solution that helps you manage your small business finances through a combination of remotely-working, certified financial experts and cloud-based software. 

An innovative approach, it eliminates the need for manual, in-house bookkeeping and frees up your time to concentrate on what’s truly important: the growth and strategic direction of your business.

In essence, a virtual bookkeeper or a remote bookkeeper performs the following functions, which are performed by an in-house bookkeeper, too – except they do it remotely using use cloud-based accounting software:

• Monitor cash flow
• Manage expenses
• Post financial transactions
• Process payroll
• Reconcile accounts
• Tax advisory and filing
• Review and update statements

Virtual bookkeeping vs. local bookkeeping – which is better for small businesses?

The key differences between local and virtual bookkeeping are mainly delivery method, flexibility, and efficiency and cost-effectiveness. When deciding which to choose for your small business, consider the following factors and make an informed decision:

• Cost and resource efficiency: Virtual bookkeepers offer the comprehensive services of traditional bookkeepers but with the added benefits of modern technology, reducing the overhead costs associated with in-house employees. This model ensures the availability of bookkeeping services in a cost-effective manner, providing the expertise of a full-time professional on a part-time budget.
• Delivery method: Local bookkeepers typically require on-site work or physical document handling, whereas remote bookkeepers operate remotely, utilizing online platforms for all bookkeeping tasks.
• Geographical flexibility: Virtual bookkeeping eliminates the constraints of geographical location, allowing bookkeepers to manage your finances from anywhere, contrasting with the local bookkeepers who are bound by the need to be physically close to your business.

Picking the best virtual bookkeeper for your business

Choosing the right remote bookkeeper is key to ensuring your business’s finances are in good hands.

But it’s natural to be unsure whether a virtual bookkeeping service like CoCountant is most suitable for your business. So, when you set out to hire the best bookkeeper online, here’s how to make sure you actually pick the best one:

1- Industry experience:

Look for a bookkeeper or a bookkeeping service that offers financial management for multiple industries. When equipped with the relevant knowledge and industry experience in your sector, their familiarity can offer insights and cater efficiently to your specific business needs.

Example: If you run a SaaS startup in Silicon Valley, you’d want a bookkeeper who is experienced in providing financial management for SaaS.

So, make sure they understand the specific financial challenges and opportunities in the tech industry, from R&D tax credits to venture capital funding.

2- Services offered:

Confirm they provide the range of services you need, from basic bookkeeping to more complex financial analysis and reporting.

Example: If you’re a small e-commerce business using platforms like Shopify or Etsy, you’d want a bookkeeper who is experienced in providing financial management for e-commerce.

So, ensure the bookkeeper is skilled in integrating these platforms with accounting software like QuickBooks or Xero for seamless transaction management.

3- Software compatibility:

Ensure they’re proficient in the software you use or recommend the best options. This makes sharing data seamless and secure.

Example: A New York-based freelance graphic designer using FreshBooks for invoicing might seek a bookkeeper experienced with this software to ensure compatibility and streamline financial tracking.

4- Communication:

Clear and regular communication is vital. They should be easy to reach and provide reports that help you understand your financial situation.

Example: A Chicago-based restaurant owner should look for a bookkeeper who provides clear, monthly profit and loss statements before the monthly management meeting, ensuring timely and understandable financial updates.

5- Reviews and references:

Positive feedback from other clients can give you confidence in their reliability and the quality of their work.

Example: For reviews, it would be more relevant to consult industry-specific review sites such as Trustpilot, G2, or even LinkedIn for professional endorsements. 

These platforms offer insights into the bookkeeper’s expertise in financial services, software compatibility, and customer satisfaction within similar business environments. 

6- Qualifications and experience:

A bookkeeper’s background and certifications matter. They should have a solid track record of managing finances accurately and promptly.

Example: A Miami real estate agency might prefer a bookkeeper experienced in providing financial management for real estate professionals.

So, ensure they have a CPA certification and experience in real estate accounting, ensuring they’re well-versed in handling complex transactions and tax regulations related to property sales.

7- Security and privacy:

Your financial data’s security is non-negotiable. They should have robust measures in place to protect your information.

Example: For a private practitioner in Pennsylvania, it’s crucial to have a bookkeeper who is experienced in providing financial management for medical practices.

So, look for someone who is not only familiar with HIPAA compliance but also ensures all patient and financial data is securely managed, protecting sensitive information against breaches.

8- Getting Started at $160/month:

You don’t buy a car without first taking it for a test-drive, so why should hiring a financial partner feel any different?

Regardless of the nature of your growing business, you want to make sure you’re investing in a financial management service that’s worth your time and money. The last thing you want is a generic bookkeeping solution that creates more work instead of freeing you up to focus on growth.

At CoCountant, we stand apart as a controller-led bookkeeping service — meaning you don’t just get data entry, you get expert oversight and guidance from day one. With plans starting at just $160/month, we review your records, highlight areas for improvement, and ensure you immediately see the value in our partnership.

Taking the time to assess these areas ensures you’re not just hiring another bookkeeping service, but gaining a growth-focused partner that scales with your business and adapts to its evolving needs.

Start today from $160

Choosing between a freelance bookkeeper vs a bookkeeping firm

For the savvy business owner wading through the endless tasks of financial management, the choice between hiring a freelance bookkeeper and engaging a bookkeeping firm is crucial. 

It’s not just about balancing the books; it’s about choosing a path that aligns with your business’s growth trajectory and operational style. Do you opt for the agility and personal touch of an independently operating freelance bookkeeper, or do you lean towards the structured, comprehensive support of a reliable bookkeeping firm?

Each option caters to different tastes, needs, and moments in your entrepreneurial journey, so which one will prove best for your small business?

Navigating this choice doesn’t have to be as daunting as it sounds. Much like deciding on tonight’s dinner, it’s about understanding what you’re craving for your business. Let’s dive into each option, helping you make a choice that satisfies your business’s appetite for growth and efficiency.

Freelance bookkeepers

Picture a freelance bookkeeper: a self-reliant professional running a one-man show — carving out their niche, often from the comfort of their home. This setup might translate to cost savings for you, thanks to their lean operating model. Whether it’s offering a competitive rate or adapting to your preference for onsite work, freelance bookkeepers bring a level of flexibility and personalization to the table.

Yet, this path isn’t without its hurdles. Inviting a freelancer into your workspace might mean allocating resources like space and technology, a challenge amplified in today’s post-COVID, remote-first world. And their seemingly lean and flexible model is, more often than not, based on hourly rates — which can result in shockingly unpredictable invoices that small businesses don’t prefer.

Moreover, the unregulated nature of bookkeeping education means you’re rolling the dice on their expertise. But find the right match, and you’ve got a cost-effective solution that aligns with the financial realities of running a small business.

Lastly, the freelance route comes with a major caveat: availability. Balancing multiple clients, a freelance bookkeeper’s time off could mean a temporary standstill for your books, potentially complicating periods of high financial activity like tax season.

Bookkeeping firms

Enter the bookkeeping firm: a bastion of collective expertise. Here, you’re not just hiring a dedicated individual who will offer real-time communication; you’re gaining access to a structured back office team with a reliable support department.

While this option might come with a higher price tag (unless you opt for CoCountant!), the investment is justified through a blend of experienced, certified professionals equipped with the latest in bookkeeping technology.

Moreover, a bookkeeping firm ensures continuity, so vacations or sick days don’t translate to delays in your financial management. With a team approach, expertise is always on tap, ready to navigate the complexities of your business’s financial landscape.

Plus, the technological edge and potential access to exclusive software deals only enhance your financial operations’ efficiency and accuracy.

Choosing a firm like CoCountant means tapping into a diversified skill set, from nuanced tax knowledge to specialized payroll services, ensuring a tailored fit for your business needs — all without the dread of the clock ticking due to hourly billing.

The bottom line

By carefully selecting a virtual bookkeeping firm that aligns with your business needs, you can ensure accurate, timely, and effective financial management that supports your business’s growth and success.

Ready to partner with financial experts who take the wheel of your financial operations, freeing you to order that pizza we talked about earlier… we mean, focus on what you truly excel at as a small business owner? 😆