In the modern economy, the need to efficiently and smoothly run a business has never been this important. With mounting tasks to complete, reports to create, and projects to manage, businesses find it more difficult than ever to improve their processes, including handling their own bookkeeping.
Usually, businesses resort to two options. Firstly, they can hire an in-house bookkeeper to manage their accounts, which may not be the best option for those who have a lot of accounts to handle. The second option is to fully outsource the company’s books to a bookkeeping firm.
Given today’s highly competitive business environment, business leaders need to focus on the ins-and-outs of their businesses. Online bookkeeping is one way to lessen this burden.
In this article, we will explore the viability of hiring an online bookkeeper as an option for business owners to ensure that all the books are done correctly. As fully remote workers, these online bookkeepers use cloud-based bookkeeping software to post financial transactions, review and update statements, balance and update data, and reconcile accounts.
Here are the advantages of hiring an online bookkeeper:
- Full management of accounts
By working with an online bookkeeper, your data or finances will be much more organized and accurate. At the end of the month or the quarter, it is easy for your accountant to look over your finances and file your tax return. When a competent bookkeeper reconciles your accounts every month, it becomes easy to look up how much profit your business has made. Accurate bookkeeping records should be a priority and by working with an online bookkeeper you can avoid errors, or failures such as:
- Improper classification of expenses
- Erroneous balance in revenue or expense balance-
- Unable to save receipts
- Unable to schedule backups
- Unable to record an expense or transaction
- Recording and transactions from a prior period
- Flexibility and cost
Aside from full management of accounts, having an online bookkeeper can also be very beneficial in terms of flexibility and cost. Instead of working physically with your bookkeeper and having to incur direct costs of an employee, having an online bookkeeper can save you a lot of money. Instead of paying a full-time staff, you only pay for the hours that you need and with little or no overhead and infrastructure costs. This can be beneficial for small businesses that may not need a full-time on-site bookkeeper or whose financial service portfolio is constantly changing.
Flexibility-wise, an online bookkeeper also makes a promising case. Obviously, if an activity takes you a longer time to accomplish, someone else is probably more efficient in performing it. Working with an online bookkeeper allows you to be mobile anywhere and quickly access information from any location.
- Focus on driving revenue
With an online bookkeeper, business owners like you could concentrate on growing the business. It frees up your time and resources to focus on business strategy, goals, and other important matters to look into.
The traditional methods of recording data are highly vulnerable to risks such as theft of information. This is specific to people who access their financial information when using traditional ledgers. Unprotected computer systems and hardware used by in-house bookkeepers are at risk of being breached, risking the company’s most sensitive information. With online bookkeeping, security can be more ensured through the use of online tools and applications.
How does online bookkeeping work?
- To enable online bookkeeping, business owners grant bookkeepers remote access to their server, software, and financial documents via a secure online account.
- Depending on the arrangement, the bookkeeper or the business owner would purchase and register the software to be used in the process. One must take note that the same program or application must be used for proper transfer and documentation of the files.
- The bookkeepers will then update your records on the software installed. This will help you track and monitor your business’s financial performance.
Here are the things you should expect when hiring an online bookkeeper:
- Accounting Application
Online software such as Xero or MYOB will be used by an online bookkeeper to make sure that the books are up to date and all transactions are properly documented. Choosing an accounting application will save you from the time and expenses associated with online accounting, such as servers and initial setup fees.
- Document Management Application
Another important technology to use for online bookkeeping is a document management application, such as LedgerDocs. You can choose from a wide array of document management application, but this is usually dependent on the needs of the firm. In the case of LedgerDocs for example, clients can upload documents directly to their bookkeeper by (1) scanning and uploading document into the app, (2) emailing documents to a unique LedgerDocs email address, or by (3) taking a picture of the document using a smartphone and uploading it through the iPhone app or email
- Video Chat and Phone calls
Online bookkeepers reach out to their clients for clarification on items and take time to explain what a certain transaction means. Usually, a bookkeeper provide a set of guidelines to their clients that needs to be followed each month.
Will hiring an online bookkeeper work for you?
To help you figure out if hiring an online bookkeeper is right for you, you need to know what your vision is – now and in the future. Knowing your vision and communicating it with your online bookkeeper can open up new opportunities for help – even beyond making sure that all the books are in proper shape every single month.
For business owners like you, having a clear picture of your goal will enable you to answer other questions in processes, such as whether you should hire a full-time or a part-time bookkeeper, or how long should you work with an online bookkeeper until you hire a full-time, direct-hire bookkeeper.
Have a clear picture of your “why”, and you will be able to smartly answer if online bookkeeping will work for you.