What is Bookkeeping?
Bookkeeping is the procedure of accurately recording a particular business’s financial activities. Through this process, one archives all the financial transactions of the company into organized accounts on a daily basis. Bookkeeping is an essential part of the entire accounting process as every federal body of the land has certain rules around financial recordkeeping. Aside from staying compliant, having organized books helps small business owners to monitor the health of their business, prepare for taxation time, and prepare key financial statements.
What is a Virtual/Online Bookkeeping service?
Virtual or Online Bookkeeping services are offered by dedicated bookkeepers or teams of financial experts who help companies with basic bookkeeping tasks such as maintaining accurate financial records. Come to think of it, for a small business owner, it can be extremely time-consuming to reconcile bank statements with invoices and receipts and create financial reports. Outsourcing these tasks to Virtual or Online Bookkeeping service professionals helps one to take the pressure off.
Online Bookkeeping services or Virtual Bookkeeping services are staffed by genuine individuals who will accommodate your books every month, produce monetary reports like balance records and income articulations, and ensure your archives are all together at the time of taxation. Virtual accounting permits a bookkeeper to telecommute rather than physically working at a client’s office. A virtual bookkeeper utilizes modernized accounting programming to post monetary transactions, survey and update statements and reconcile accounts. In addition to that, these services are quite affordable as compared to the traditional employee bookkeeper.
Advantages of Online Bookkeeping Services –
(1) Updated Books
Today, thanks to clouding accounting software, online bookkeepers are given access to their client’s bank statements, receipts, and invoices, allowing them to update the books quickly without having to wait for the documents of the company. Hiring an Online Bookkeeper is like having a dedicated resource for managing the day-to-day transactions. One does not have to scramble to organize their records in time for tax season or when the business gets audited.
(2) Accurate Reporting
Online Bookkeeping services with the help of cloud-based accounting software work have made it possible to use programs like QuickBooks Online or Xero to integrate applications that save labor like:
- Dext Prepare (to capture information on receipts and invoices)
- Plooto (to perform online payments)
- Stripe (to reconcile daily sales transactions)
These accounting technologies let online bookkeepers spend less time on manual data entry, improving accuracy by curtailing human error-related mistakes.
This also helps online bookkeepers to extend better visibility into the cash flow, and business performance through real-time access to the company’s accounting books through a web or mobile app and comparatively greater decision-making insight from the monthly financial statements like balance sheet, income statement, and cash flow statement, etc. generated.
(3) Cost Effective
Hiring a full-time or in-house Bookkeeper is not the most economical choice when compared to Online Bookkeeping service providers in terms of:
- Payroll deduction costs
- Overhead like benefits and IT equipment
With Online Bookkeeping service providers like SF Tax, you need to pay only for the bookkeeping services your business requires. Therefore, as your transactions or accounting complexity grow, our team extends our wider range of expertise and a broader scope of services.
(4) Time To Focus On Business
You must not have started your business to later become a bookkeeper, right? Outsourcing Online Bookkeeping services allows you to remain undeterred on that track. Rather than spending time on the accounting books and worrying about tax season, you spend your time and energy on flourishing your business and attaining peace of mind. Furthermore, you save energy on training and managing staff. At SF Tax, we smooth the transition to Online Bookkeeping by learning all about our client’s business during the onboarding process.
(5) Specialized Experience
It is better to take specialists rather than generalists for your business. With the enhanced regulations and the unique needs of individual business entities, a specialized set of skills is quintessential. From an online accounting firm like SF tax, you get expert computation in areas like:
- Personal financial planning and assistance
- Managerial accounting
- Forensic accounting
- IT auditing
- Tax preparation
Some of these tasks tend to be periodically cyclical, such as annual tax preparation; therefore, hiring an online accounting firm is effective and efficient as they will provide the services you need, only when you need them, without the overhead of hiring a full-time CPA.
(6) Consistent Communication
Information is only as helpful as long as it is available. Relying on a staff accountant gives access to financial data only during regular business hours. But what if one requires a piece of information when the staff accountant is “off the clock”? Online accounting firms can fulfill this need by offering you consistent, regular communication through email, phone, and other channels, becoming a digital communication solution that ensures your accounting staff is right in your pocket, even when you’re out of the office or even out of the country.
Responsibility of an Online Bookkeeping Service
Every Online Bookkeeping service extends basically to advanced features. Therefore, features from one service will be pursued more by small organizations, while completely different features from another service could interest bigger companies. That is the reason there’s no standard one-size-fits-all arrangement.
Some popular features to expect from an Online Bookkeeping service include:
- Payroll services
- Uses popular accounting software such as FreshBooks
- Dedicated virtual bookkeepers
- Monthly reconciliation of bank statements
- Account receivables and account payables
- Keep books balanced
- Quarterly and monthly reporting
- Tax services
- Billing and invoicing
- Track finances
- Data entry
- Software training
How To Hire The Best Online Bookkeeping Services In 2022?
To hire the best online bookkeeping service, you must look for the following aspects:-
How to choose the right accounting method?
There are two different accounting methods:
- Cash Basis and
- Accrual Basis
Cash basis accounting centers around the development of money, so expenses are recorded when payments are made, and incomes are recorded when payments are received.
Accrual accounting, then again, recognizes revenue when it’s been procured and expenses when they are owed. For instance, you record invoices when they’re sent out, paying little heed to when you get paid. Bills get recorded when they’re received, frequently before cash payments are made. If you have a great deal of money close by yet a ton of bills that should be paid, accrual bookkeeping will reflect both.
Cash basis accounting is much easier, which is why many bookkeeping service providers offer it at affordable prices. But accrual accounting can offer a better understanding of where the business stands. Ensure to choose a service that does the right type of accounting for the size and complexity of your business.
Does the Bookkeeping service work together with your accounting software?
Loads of bookkeeping services are created to run on QuickBooks, an industry leader in bookkeeping and accounting programming. A few services likewise support Xero, another cloud-based bookkeeping program. Assuming you’re OK with your ongoing programming, ensure your bookkeeping service supports it.
How much catch-up Bookkeeping do you need to do?
If you haven’t forever been persistent about your monetary recordkeeping, most accounting services will go through your old receipts, invoices, and bank proclamations to keep your books up-to-date. This service ordinarily conveys a month-to-month charge, so it is essential to cover your catch-up accounting costs while looking for a bookkeeping service.
What kind of relationship do you want with your bookkeeper?
The online Bookkeeping service provider typically ensures to provide a dedicated bookkeeper or accounting team available round the clock for your bookkeeping requirements. These experts are always in touch with you through email or phone. In the event that you need a more significant level of help from now on, for example, CFO-style services, consider picking an Online Bookkeeping that will permit you to update later.
Here are some essential inquiries to pose to yourself as you settle on the best answer for your small venture:
- What features do you value most?
- What’s your financial plan?
- Do you need a scalable arrangement, or would you say you are simply happily picking the best answer for this particular phase of your business?
- Is it true that you will pay more for assistance, however fewer features and services?
- Or, on the other hand, more features and services, however less help?
- What number of monthly transactions does your business have? Will that increment essentially before the week’s over?
- Do you need to speed up? Could it be said that you are months or years behind on your books?
- What are the aggregates of your month-to-month expenses?
It is normal for entrepreneurs of developing businesses to endeavor to account all alone; however, it’s simple for accounting to be an idea in retrospect until tax time draws near.
Nonetheless, passing on charges somewhat late makes organizations miss out on opportunities that come along with the frequent expense and revenue tracking, accurate balance sheets, financial reports, and much more. Choosing the right Virtual/Online Bookkeeping service for your small business will free up your time to focus on the main business and ease stress.