A virtual bookkeeper is a person or firm that records, categorizes and reconciles a company's transactions from a remote location, on behalf of, or alongside, the company's own staff. A tax preparer is not a virtual bookkeeper, although one firm may offer both. The bookkeeper keeps the records current, and a CPA or tax preparer builds on them. Our guide on how to find a reliable virtual bookkeeper covers choosing the person.
Key Takeaways
- Virtual bookkeeping means a remote person works in your cloud accounting software, so there is no desk or equipment to provide.
- Routine work such as recording transactions and matching bank lines can be handed over, while approvals and filings stay with you.
- Security depends on the setup, so ask about encryption, two-step sign-in and limited access.
- Services can scale up or down, so check minimum hours and notice periods.
- Reports are only as current as the last transaction recorded, so agree how often the books are updated.
Cost-Effective Solutions
Virtual bookkeeping can cost less than an in-house hire, because there is no desk, computer or office space to pay for and you buy the hours or the package you need. Our comparison of online bookkeeping services vs traditional firms covers how the pricing structures differ.
A lower price still has to buy the right work. Check what the monthly fee includes, such as bank reconciliation, bill entry and reports, and what costs extra.
Improved Efficiency and Productivity
Routine bookkeeping is repetitive: entering transactions, matching bank lines, chasing missing receipts. A remote bookkeeper who does it on a fixed schedule turns month-end from a scramble into a routine, and the owner's hours go back to customers.
Reports are only as current as the last transaction recorded. With bank feeds connected, a bookkeeper can keep the books close to current, so you can open a report any day without waiting for a call.
Enhanced Data Security and Accessibility
Financial records are sensitive, so ask any provider what protects them:
- Encryption. Ask whether data is encrypted in transit and at rest.
- Sign-in. Ask whether every user has a personal login and two-step verification.
- Backups. Ask how often data is backed up and how you can export a copy.
- Access. Ask which staff can open your files and how access is removed when someone leaves.
- Monitoring. Ask how the provider detects and responds to a suspicious login.
A provider's answers are claims until you see them in writing, so put the ones that matter in the contract.
Scalable and Flexible Services
Many virtual bookkeepers let you change hours as your needs change: more at year-end, fewer in a quiet quarter. Ask about minimum hours and notice periods, because scaling down depends on what the contract allows.
Some bookkeepers assign you one named person and others use a team, so choose the model that fits how much continuity you want. Accounting firms that want to offer bookkeeping under their own name can read our explainer on white-label bookkeeping.
Simplified Financial Reporting
With the books kept in cloud accounting software, a virtual bookkeeper can provide:
- A profit and loss statement, a balance sheet and a cash flow statement each month.
- Reports set up the way you run the business, such as by product line or location.
- Fewer manual entries, since bank feeds and receipt capture cut retyping.
- A list of unpaid invoices and bills, so you know who owes you and whom you owe.
- Records your CPA can use for tax planning and the annual return.
Basic cash projections can come from the same data, and a CPA or financial adviser is the person to ask about forecasts and tax planning.
Regulatory Compliance and Oversight
A bookkeeper keeps the documents that compliance depends on: invoices, receipts, payroll reports and bank records, filed where your CPA can find them. Filing deadlines and penalties still belong to the business, so keep a calendar of due dates and ask your bookkeeper to flag them.
Bookkeeping is a different job from accounting or tax work. A bookkeeper is not a CPA, and representing you before the IRS takes a CPA, an enrolled agent or an attorney, so ask what a person is qualified to do before you hand over a task.
Freeing Up Time for Core Business Functions
Handing over bookkeeping gives you back five things:
- Evenings. You stop spending them on data entry and reconciliations.
- Attention. Fewer interruptions about bills and receipts reach you.
- A clear view of cash. Reports arrive on a set schedule.
- Specialist knowledge. Someone on the job already knows your accounting software.
- Decision time. You have hours to use the numbers instead of producing them.
Frequently Asked Questions
How Are Virtual Bookkeepers Kept Accountable for Their Work?
Through a written scope, set deadlines and a review of each month's reports. Most accounting software also keeps an activity log that shows who changed what and when, so ask your bookkeeper to work under a personal login.
Can Virtual Bookkeepers Access My Business Bank Accounts Directly?
They do not need to move money. Most accounting software pulls transactions through a bank feed, and many banks let you add a user with view-only access, so keep payment approval with you and ask the bank which roles it offers.
What Happens if My Virtual Bookkeeper Leaves the Company?
Keep a backup plan: written procedures, a shared record of what is due each month and a way to remove the person's access the same day. If a remote assistant hired through us does not work out in the first 3 months, we replace the hire at no extra cost.
How Do I Ensure Smooth Transitions Between Virtual Bookkeepers?
Ask the outgoing bookkeeper to finish the month's close and write a handover note. Give the new person access before the old one leaves, and compare the closing balances in the old records with the opening balances in the new.
Can Virtual Bookkeeping Services Handle Multi-Currency Transactions?
Yes, if your accounting software supports multiple currencies and the bookkeeper has recorded foreign exchange gains and losses before. Check that your software plan includes multi-currency, because some plans do not.
Final Thought
Virtual bookkeeping works when the scope, the access rules and the reporting schedule are written down and someone reviews the output each month. If you want one person who works in your accounting software every week, book a free consultation and describe the work.