Virtual bookkeeping companies combine the best of both worlds—the automation of accounting software with the knowledge and expertise of a professional bookkeeper. You should choose an online bookkeeper that’s going to save you time by taking over cumbersome tasks that don’t require your unique knowledge or expertise. At the very least, this can include managing your bank feed and reconciling your bank accounts, but depending on your business, it might also include back-office activities like invoicing customers and paying bills. Follow the steps below to choose a virtual bookkeeper for your business.
Step 1: Decide Which Services You Currently Need
Each online bookkeeping service offers a slightly different selection of services. To determine the best bookkeeping service for you, it’s best to think about how much work you want to do yourself and what things can be outsourced easily. Some business owners prefer to maintain control over their books while others feel more comfortable letting their online bookkeeper handle everything. If you’re a freelancer or sole proprietor, you may not require payroll services, whereas larger companies might benefit greatly from outsourcing payroll. If you’re a service business that sends out a large number of invoices, maybe that’s the area where outsourcing can save you the most time. Above all, you must decide where your time is better spent doing something other than bookkeeping. Once you identify those areas, you must find an online bookkeeper that matches those needs.
Step 2: Decide Which Services You Might Need in the Future
As your business grows, so will its needs, and you don’t want to have to change to scale up. That’s why it’s important to identify a company that can grow with you. What may initially have been a good fit could change if you anticipate rapid growth. Services that you may find yourself needing in the future include payroll and human resources (HR) management, tax filing and advisory services, and chief financial officer (CFO) advisory services.
Step 3: Narrow Your Choices of Virtual Bookkeeping Companies
With all of the virtual bookkeeping companies that exist, we thought it would be useful to provide a guide to the best online bookkeeping services. As it provides suggestions for different types of businesses and software users, we recommend reviewing this article and evaluating which companies best match your requirements.
Perhaps you’re trying to save money, and you’d prefer a flat monthly fee for basic bookkeeping rather than paying for services that you don’t need. You might consider Merritt Bookkeeping, which we selected as the best for small businesses on a budget. Start-up companies seeking the services of a CFO should look into Pilot, which also offers tax, accounts payable (A/P) and accounts receivable (A/R), and controller services for an additional fee. Businesses that are behind on their bookkeeping may want to check out Bench, which is our pick for catch-up bookkeeping services.
Step 4: Consider Other Factors
There are other factors to consider when selecting a virtual bookkeeping company, which include the following:
- Meetings: Some online bookkeeping companies allow you to schedule meetings on a monthly basis, while others allow you to schedule them as often as necessary. Communication can be as simple as a phone call or as elaborate as a one-way video conference with the ability to screen-share your documents.
- Dedicated bookkeeper: Decide whether it’s important to have a dedicated bookkeeper―so that you can always talk to the same person―or if you anticipate that your bookkeeping questions will be minimal. If having a dedicated bookkeeper is at the top of your list, then you should evaluate whether the bookkeeper is an employee of the company or an independent contractor. Because companies may have more control of the quality of processes of employees versus independent contractors, it’s important to find out who, if anyone, is providing quality control in those situations.
- Software: Which software do they use? While QuickBooks Online was selected as our best small business accounting software and is supported by many virtual bookkeeping companies, users of other software may find that they are limited to one or two services. In this case, it might be worth changing from your current software to find the online bookkeeping service that best suits your business. However, if the company uses proprietary software, it might be difficult to change bookkeepers later.
- Number of users: If you have a larger business and require access for multiple users, then you should factor this in when evaluating online bookkeeping services.
- Online portal: An online portal can be a valuable way to communicate with your dedicated bookkeeper, stay apprised of their ongoing task list, and also schedule future appointments. Many services also allow you to upload and share financial documents, making it easier to stay organized.
- Mobile app: Some virtual bookkeeping services, such as Bench, have their own mobile apps that allow you to perform such activities as monitoring accounts and real-time reports while you’re on the go.
- Price: Online bookkeeping companies price their services in many ways, from an annual contract to a monthly fee for services. Some also offer the option of paying for services on an as-needed basis, while others let you customize your services by paying an additional hourly rate. Another factor to consider is whether you must pay an additional fee for your software subscription, such as with QuickBooks Live.
Step 5: Preview Your Top Choice, Then Buy
Once you have selected your top choice for virtual bookkeeping services, then you should preview the fit for your business with either a free trial or demonstration. Also, some services provide a short-term contract, which allows you to change your mind without losing a large financial investment. Once you sign up, you’ll begin the onboarding process. You may be required to provide your bank account statements or software file to set up your account, but if you have elected to have a dedicated bookkeeper, then they should be able to assist with that.
Typical Services Provided by Virtual Bookkeeping Companies
Some virtual bookkeeping services, such as QuickBooks Live, only offer basic services such as monthly account reconciliation and analysis of financial reports. Others, such as Bookkeeper.com, offer a whole host of services that include invoicing your customers, paying bills, payroll, and tax preparation. Bookkeeper360 provides a customized set of services for each client, allowing you to choose the frequency of service, whether that’s weekly, monthly, or on an as-needed basis.
The most common services provided are:
- Account reconciliation: One of the most common services that virtual bookkeeping companies provide is account reconciliation and the performance of a month-end close, ensuring that your books are accurate.
- Invoicing customers: Often available as an add-on service, many companies will take on the task of billing your customers for you.
- Paying bills: Bill pay services are also provided by online bookkeeping services for an additional fee, with the ability to process payments via automated clearing house (ACH) or check.
- Reports: The complexity of financial reports provided varies, from a basic profit and loss (P&L) statement to reports that are customized for your industry.
- Tax management: Many online bookkeeping firms also provide tax services, including tax preparation, filing, and advice.
- CFO advisory services: Growing startups and other venture-backed companies may be interested in solutions such as CFO advisory or controller services.
You need to evaluate exactly what bookkeeping assistance you need, now and in the future, before shopping for an online bookkeeping service. Once you’ve compiled a list of bookkeepers that meet your needs, you should consider other factors such as the price and type of communication available. You can narrow your choices by reviewing our selections for the best online bookkeeping services, and then preview your top choice if a free trial is available. Follow our steps to selecting a virtual bookkeeping company, and you’ll be well on the path to finding the right online bookkeeper for you.