When Is The Right Time To Hire A Virtual Bookkeeper?

When you are running a business, you have many things to do, but accounting should not be one of the things that causes you stress. Accounting is important to a company’s overall financial health, but doing it all yourself will take away from your ability to grow your business. Many times, this is when business owners ask themselves, “when should you hire a virtual bookkeeper?”

This article will go over the proper time to hire a virtual bookkeeper, what the typical red flags are, what some of the different levels of growth that a business will experience are, and what some of the advantages of hiring a virtual bookkeeper to help make that determination with clarity and confidence are.

What does a Virtual Bookkeeper do? 

A virtual bookkeeper is a remote accounting professional who uses secure, cloud-based accounting software to complete routine accounting tasks in place of the business owner being able to work on-site. The virtual bookkeeper is there to help you manage your financial information and also to maintain the accuracy, consistency, and compliance that you want to see in your financial data, making them a perfect option for today’s businesses.

The most common virtual bookkeeper services provided are:

• Tracking and classifying income and expenses for the business
• Reconciling bank statements and credit card statements
• Managing accounts payable and accounts receivable
• Providing coordination and management of payroll records
• Monthly and quarterly financial reporting
• Reviewing sales tax liabilities and filing requirements
• Helping to organize your books for accountants and tax preparation purposes

Regardless of whether you are using a virtual bookkeeper for a small business operation or for a growing business, their ultimate goal is to keep your financial information accurate, current, and at the ready for you to use as a tool for making informed decisions.

Why Does Timing Matter When Hiring a Virtual Bookkeeper? 

It’s possible to over-hire a virtual bookkeeper, and it’s equally likely to under-hire one. Either way, poor timing will most likely lead to unorganized books, missed deductions, cash flow surprises, and compliance issues.

There is no specific date when you should hire a virtual bookkeeper. The correct time is when your bookkeeping has become an obstacle to your focus on growth. sales, and other strategic decisions. If you have timely bookkeeping support, then your financial information will continue to be accurate, and therefore you will save money by avoiding expensive cleanup work at a later time.

Key Signs: It’s Time to Hire a Virtual Bookkeeper

Whether or not you should hire a virtual bookkeeper now is dependent upon the presence of certain red flags in your business. Some of those red flags include

• Reconciliations and expense tracking are behind schedule
• Tax season is stressful and rushed
• Your monthly profit/cash flow is uncertain
• Invoices and payments are “slipping through the cracks.”
• You are spending more time on books than you are on customers
• Financial reports do not agree with bank statements

Business Growth Stages for a Virtual Bookkeeper

Each stage of business growth creates unique accounting/financial requirements.

Start-Ups 

A virtual bookkeeper for startups establishes proper accounting systems from the start. By having clean books as soon as possible, a startup avoids long-term problems related to their books and also provides investors and management with the information needed to create budgets and make informed investment decisions.

Small Businesses 

As transaction volumes increase, a remote bookkeeper for small businesses ensures consistent and compliant accounting practices and provides accurate, timely, and affordable monthly accounting reporting without requiring the costs associated with a full-time employee.

Growth Businesses 

As a company scales, a virtual bookkeeper for a growing business handles complex cash flow and multiple account reconciliations and provides financial insights necessary to inform the decision-making process for expanding the business.

When Is DIY Bookkeeping No Longer Sustainable?

DIY bookkeeping will only work well for you when your monthly transaction count is low and your company has little to no financial complexity. However, once you have too many transactions to manage each month or once your bookkeeping task list extends beyond Monday to Friday, then DIY bookkeeping will no longer be sustainable, and you should hire virtual bookkeeping services for small companies.

When To Go Virtual?

As illustrated above, the decision to go with a virtual bookkeeper versus an in-house bookkeeper requires a careful assessment of a few factors, cost, flexibility and your business.

Choose a Virtual Bookkeeper If:

• Your budget does not allow for high overhead costs
• You need flexible and scalable support
• You operate from multiple remote locations or offices.
• You would like to have access to experienced bookkeeping professionals.

As such, many businesses prefer to hire a virtual bookkeeper in the USA or offshore teams to provide them with accurate and compliant bookkeeping services.

How Using a Virtual Bookkeeper Helps to Make Better Business Decisions?

Making excellent business decisions depends on having accurate records. The benefits of hiring a virtual bookkeeper extend well beyond basic data entry tasks.

By having current financial records, you will be able to:

• Real-time monitoring of your cash flow
• Identifying which services produce a profit for your company
• Controlling unnecessary expense for your company
• Having confidence when creating budget forecasts
• Making smart growth decisions backed by financial data

Common Errors Businesses Make When Hiring a Virtual Bookkeeper?

There are many different reasons why businesses wait too long or manage the hiring process poorly. Some common mistakes made by businesses include:

• Hiring a virtual bookkeeper after your books are in complete disarray
• Hiring based on cost alone, not experience
• Not defining clear responsibilities
• Ignoring software compatibility
• Failing to review monthly reports

To help you hire a virtual bookkeeper for small business needs, you should avoid making the following mistakes.

Preparing Your Small Business Prior To Hiring a Virtual Bookkeeper

The better prepared you are before you decide to hire a virtual bookkeeper, the smoother the transition will be and the faster they can start producing results for your company.

• Your business bank accounts are separate
• Accounting software access is ready
• Past financial records are organized
• Clear processes for invoices and expenses exist
• Expectations and reporting frequency are defined

Wondering Whether Your Small Business Is Ready to Bring on a Virtual Bookkeeper? 

When bookkeeping takes too long or distracts you from growing your business, it is time to get professional help. Whether you are a startup, running a small business, or taking your company to the next level, virtual bookkeeping gives you the opportunity to work with professionals who have experience without the cost of hiring a full-time employee.

The decision to hire a virtual bookkeeper is not an expense but rather a smart investment that will provide you with the clarity needed to make informed decisions and keep you compliant with all regulations.

FAQ

1. How to know when it is safe to hire a virtual bookkeeper?

Virtual Bookkeeper When bookkeeping eats up too much of your time, when you start seeing more errors, and when you cannot access the full picture of your company finances, you should hire a virtual bookkeeper.

2. Does a remote bookkeeper make sense for my small business?

Yes. Many businesses employ virtual bookkeepers, and they are employed exactly for your small business. Such an arrangement typically will cost less than employing an employee, and it is flexible and scalable.

3. How do I hire a virtual bookkeeper?

Know that customers have specific needs from a virtual bookkeeper first; only then check whether the needs will be met via the experience; knowing the software piece is the last aspect; first rectify what they need, then analyze how they will connect with you, and provide them some short run for you to decide if you want to engage their offerings further.

5. Is it possible to hire a virtual bookkeeper in the USA?

Yes. As surely some of the companies have realized, you can get a virtual bookkeeper anywhere in the world, even in the USA, depending on your budget and what particular skill you ask for.

Final Thoughts:

Knowing when to hire a virtual bookkeeper will greatly impact how you handle your business’ finances. With an up-to-date set of accurate books, you’ll feel more confident about growing your business.