What Is Virtual Accounting?
While accounting refers to the systematic recording of a business’s financial transactions, summarizing them for analysis and reporting. When an accountant performs all of the functions, roles, and responsibilities of an in-house accountant virtually, that process is called virtual accounting.
Virtual accountants can perform all of the activities and tasks performed by an in-house accountant without physically being present in the office. Several virtual accounting service providers offer the same services and functionalities as an in-house accountant but only at a cheaper price. These types of accounting services allow small businesses to outsource even CFO services and CA services online.
Functions Performed By Virtual Accountants
Virtual accountants perform the following bookkeeping and accounting services-
- Accounts receivables- Virtual accountants will take on the responsibility of invoicing and collecting any payments that are due to your business. They also provide the business with regular updates and reports regarding the payments.
- Accounts payable- Virtual accountants take the responsibility of timely making payments due to other businesses and individuals.
- Month-end and year-end financial reports- They create month-end and year-end financial reports based on their collected data.
- Processing payroll- Virtual accountants process payroll and provide services where they can pay the employees their stipend.
- Filing tax returns- Filing taxes is an incredibly stressful and arduous job that requires a thorough understanding of the rules and regulations. Virtual accountants can not only calculate the tax and pay them, but they can also file tax returns.
- Basic Bookkeeping Services- Virtual accountants also perform all of the basic bookkeeping services.
3 Reasons Why Virtual Accounting Is The Way To Go
- Flexible- Virtual accounting is flexible. You can take your accounting services anywhere with you when you choose to opt for virtual accounting services. Businesses can access their financial records, all thanks to cloud accounting.
Most small businesses can afford only one or two accountants. And when these accountants are on leave, their accounting functions are not performed. However, with virtual accounting, businesses don’t have to worry about that since several people are in charge of finishing their work.
Virtual accounting outsourcing services also offer flexibility in the form of availability. In emergencies, virtual accountants are more reliable to contact as they are always available to help.
- Diverse Expertise- Accountants working at virtual accounting firms are designated a wide portfolio. This means they handle several businesses from different sectors. Therefore, when you avail of the services of a virtual accounting firm, you are going to work with accountants that are experienced, qualified, and well-equipped to offer industry-specific solutions to you. They are also well-equipped to handle any irregularities.
- Time and cost-efficient- To hire and staff an in-house accountant is a costly affair and one that can be very tedious. Accountants offer a very important service to a business. Therefore, before hiring them, you need to put them through an interviewing process that can ascertain whether they are well-suited for your business.
Everybody isn’t well suited to make that assessment. Plus, when it comes to small businesses and start-ups, they don’t have the necessary funds to employ a full-time in-house accountant. Virtual accounting firms are cost and time-effective for the same reason. Now businesses only have to pay for the services that they are using.
These are just a few reasons why virtual accounting is the way to go. However, there are a few more. These are- logistical efficiency, quality customer service, and ease of accessibility. More than anything, virtual accounting firms have made accounting services accessible too and affordable for small business owners and start-ups.