Types of virtual bookkeepers
A virtual bookkeeper helps small businesses keep track of their finances and keep their records ready for month-end reports and tax season. These professionals work remotely, either as part of your team or as an outside provider. Many offer professional bookkeeping services, taking on your invoicing, bills, reconciliations and other basic bookkeeping tasks thanks to their accounting knowledge and experience.
Virtual bookkeepers enter and categorize your transactions in cloud accounting software such as QuickBooks Online or Xero, and the software performs the calculations and generates the reports. Because the work is done online, you are not limited to bookkeepers near your office, and you can hire for the hours your books actually need.
There are three types of virtual bookkeepers:
• Bookkeeping virtual assistants. These assistants handle the routine work, such as data entry, receipts, invoices and bill entry, usually under the review of your accountant or a senior bookkeeper.
• Full-charge bookkeepers. These bookkeepers look after the books end to end, from daily transactions and reconciliations through to the month-end close and financial reports.
• Specialist bookkeepers. These bookkeepers focus on one industry or one accounting system, for example ecommerce, real estate or construction, where the bookkeeping works a little differently.
The right type of virtual bookkeeper depends on how much of the work you want to hand over. If your accountant already reviews the books each month, a bookkeeping virtual assistant may be enough. If nobody is closing the books today, look for a full-charge bookkeeper, and consider a specialist when your industry calls for one.
Freelancer, firm or dedicated virtual bookkeeper?
Once you know which type of help you need, the next choice is how to hire it: a freelance bookkeeper, a bookkeeping firm or a dedicated bookkeeper who joins your team. All three can keep accurate books. The differences are in who does the work, how much say you have over it, and what happens when your needs change.
A. Virtual Bookkeeping With a Freelancer or a Firm
A freelance bookkeeper is a self-employed person who often serves several clients at once. You usually find and vet them yourself, agree the terms directly, and need a plan for the weeks they are unavailable. A virtual bookkeeping firm takes on your books as a service: its staff follow the firm’s own process, and you may not always deal with the same person. Both can suit a small, steady workload.
B. A Dedicated Bookkeeper on Your Team
A dedicated bookkeeper works remotely on your books for the hours you agree, inside your own accounting software, such as QuickBooks Online or Xero, and reports to you. You set the priorities, and the knowledge of your accounts stays with one person. This suits a business with daily transactions. On DigiWorks you interview candidates and choose who joins, and DigiWorks handles the contract and payments.
Services
Virtual bookkeeping services cover more than most small businesses expect. Beyond recording transactions, a virtual bookkeeper can reconcile bank and card accounts, send invoices, follow up on late payments, enter bills and prepare month-end reports.
Many virtual bookkeepers also help with payroll records and keep your books ready for your accountant or tax preparer. Tax and retirement advice is a different job and belongs with your accountant or a financial adviser. If you don’t know where to start, ask about what services they offer. You’ll likely find something that fits your needs.
How to choose a virtual bookkeeper
Bookkeepers are like plumbers, electricians, and roofers: people we don’t always think about choosing until something goes wrong. But even though it might seem obvious, there are still plenty of questions to answer before you start working with a bookkeeper.
Here are some things to consider before you decide whether to work with a virtual bookkeeper or hire a traditional bookkeeper yourself.
1. What Accounting Method Do You Prefer?
There are two main accounting methods. Cash basis records income and expenses when money actually moves in or out of your bank account. Accrual basis records them when they are earned or owed, even if the payment comes later. Cash basis is simpler, while accrual gives a fuller picture of what you owe and what you are owed. Your accountant can tell you which method your business should use. If you’re looking for a professional bookkeeper, make sure they have kept books on that method before.
2. How Many Transactions Do You Expect To Do In An Average Month?
The number of transactions decides how much bookkeeping time you need. Before you speak to candidates, count your typical monthly sales, bills, bank and card lines and payroll runs. A business with a low volume may only need a few hours of bookkeeping each week, while one with daily sales, several bank accounts or inventory needs a bookkeeper who is in the books every day. Sharing these numbers up front helps you hire for the right hours.
3. Which Bookkeeping Software Do You Use?
You need to make sure the person you choose to hire is familiar with your preferred accounting software.
How to assess virtual bookkeepers
A virtual bookkeeper should have a track record you can check. Ask each candidate for their work history, the kinds of businesses they have kept books for, and the accounting software they use every day. If your business has its own quirks, such as inventory, several currencies or a high volume of invoices, ask for examples of similar work. In the interview, have them talk you through a recent month-end close step by step. A strong candidate can explain what they reconcile, what they check before sending reports, and what they do when the numbers do not match.
References are important. Ask for clients or past employers you can contact, and ask them about accuracy, deadlines and communication. Someone who has worked with a bookkeeper can tell you more than a resume can.
Virtual bookkeepers should know how the software works. This includes spreadsheets, invoicing, and accounting programs. The best way to check is a short practical test. Give candidates a sample bank statement to reconcile, or ask them to share their screen and show how they would record a bill and a customer payment in your software. Look for accuracy first, then speed.
If you would rather not run the entire hiring and assessing process yourself, you might consider making use of a hiring platform like DigiWorks. Candidates on DigiWorks go through skills-based assessments, and the platform matches you with bookkeepers and admin assistants who fit your needs. You interview them and choose who joins your team, while DigiWorks handles contracts and payments. DigiWorks talent comes from countries including South Africa, the Philippines, Nigeria, Mexico and Vietnam, so you are not limited to the bookkeepers available in your area.