To save time and money, many business operations and processes are being automated or made virtual. To implement this change in the finance department, virtual accounting is increasingly being adopted.
It has always been important for a business to keep its costs low while increasing efficiency in its operations. This must always be done in creative and well-thought-out ways that will not compromise the quality of services or products offered. Over the last few years, it has become increasingly popular for companies to outsource professionals for certain tasks instead of paying in-house employees. Thanks to improved internet connections and fast microprocessors, firms can now use computers to perform operations virtually, cutting off the need for a designated physical working space.
Although virtual operations have existed for a while, the COVID-19 Pandemic accelerated the move toward working remotely. The need to maintain safety while maintaining normal business operations pushed many firms to embrace virtual technology and its benefits. The finance department is also switching to virtual accounting to facilitate remote operations.
Virtual Accounting vs. Online Accounting
An increased demand for business services, coupled with the convenience of the internet, has propelled various online options for hiring bookkeepers and accountants. However, so many terms are used to describe remote professionals and their services that it can often be confusing to know what works best for your company. The terms online and virtual accounting are sometimes used interchangeably. They are both methods of accounting designed to ease the pressure off you by managing complex bookkeeping tasks via the internet. However, while they share the same concept and provide similar services, the two have some critical differences.
Virtual accounting is sometimes referred to as remote, flexible, or cloud accounting. This is an outsourced solution where your business grants a virtual accountant remote access to your server, financial documents, and other financial tools to allow them to take over the accounting tasks. The accountant works remotely and securely hosts all the information on the cloud, where you can easily access it anytime. It could be that you are working with one accountant or a team of accountants, but the distinguishing factor is that everything is done on an online network using computers and not locally. This type of accounting is often compared to hiring a part-time accountant to help with certain tasks when there is a need, and you only pay for the services offered.
Online accounting, on the other hand, is a more robust service. It is also available through the internet, but instead of just handling the accounting and bookkeeping tasks, it also strives to streamline the functions using technology solutions. As a result, online accounting and bookkeeping services are offered along with a software package to replace traditional spreadsheets and manual paperwork systems.
Services Covered By Virtual Accounting Solutions
- Bookkeeping
- Management accounts
- Business activity statements
- Accounts receivable
- Accounts payable
- Inventory management
- Payroll services
- Tax return preparation
- Cash flow management
The Benefits of Virtual Accounting
1. Saves Time and Money
The best thing about virtual accounting is that there are no surprise costs. You only get to pay for the services you receive. This is very cost-efficient, especially if your business is still small and cannot afford to pay a regular retainer salary to an on-site accountant. Furthermore, you will not have to invest in equipment and other benefits that on-site employees require. Additionally, getting a virtual accountant frees you to focus on other critical aspects of running the business, such as strategizing and marketing.
2. Improved Business Operations
Businesses must know their financial standing to manage and track their key performance indicators properly. Updating major financial reports like income statements, cash flow statements, and cash disbursement schedules will equip you to make informed decisions that will lead to success.
3. Access to a Wider Talent Pool
Unlike an on-site employee, virtual accounting gives you access to a wider talent pool. When hiring a local accountant, you are limited by how much you are willing to pay for their salary. However, virtual accounting gives you access to accountants of various skill levels, talents, and experience at a fraction of the cost.
4. Up-to-Date Books
Virtual accountants are equipped with the necessary tools to allow them to make quick updates to your books without having to wait for paperwork. They are a dedicated resource for managing your day-to-day books, so you don’t have to wait for work or tasks to pile up. Virtual accounting covers several services; you only need to request what you need to be done to keep your books updated.
5. Expert Technical Support
Accounting implements several innovative and technological solutions to elevate and streamline bookkeeping services. However, it may not be feasible for all businesses to invest in the latest accounting technology and train their staff. Therefore, getting a virtual accountant gives you access to technical and expert solutions without spending extra.
How Are Remote Teams Poised For Virtual Accounting?
Virtual accounting lets you access your financial statements from anywhere, 24/7. You can work with a preselected schedule so that you get regular updates. All the data is securely stored on a cloud server, and you get to determine who gains access to it. Therefore, if you are already working remotely, virtual accounting will fill in the need for accounting services while blending in with the remote way of working your team is already accustomed to.
In a remote work setup, your team is already familiarized with different communication tools that make it possible to work from a different location. Therefore there should be no problem adjusting to a virtual accountant. Each team member can access the financial information they need through the selected communication channels without having to wait for paperwork.
Conclusion
Do you wish to enjoy the services of a fully functioning bookkeeping and accounting department without the price tag and challenges of hiring an in-house team? Virtual accounting will allow you to track this important aspect of your business in real time with a team of remote professionals. It is, however, important that you do due diligence to ensure you contract capable virtual accounting services to ensure your books are correctly updated and your data is safely stored.
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