A- What is a ‘Virtual’ Bookkeeper?
In literal terms, a bookkeeper is a person who is employed by a business to take care and maintain records of all the financial matters and affairs that take place in an organization internally and externally. When you add the word Virtual to bookkeeping, it gives the bookkeeper the ability to telecommunicate instead of working physically at a business or a client’s office.
Apart from the difference in work location, there isn’t much that differs in bookkeeping and virtual bookkeeping.
A virtual bookkeeper simply uses online software to store, review, post, and update financial statements and bookkeeping records of the business.
B- How does it work?
Virtual bookkeeping is not rocket science. For enabling, the business simply grants remote access to the server, financial documents, and the software to the bookkeeper.
The bookkeeper is required to sign on the secure network of the company at home, similarly to an employee who would be working in the company. The bookkeeper then installs the company’s bookkeeping software on his computer, where he will be handling all the financial matters of the company.
One thing that companies have to be careful about is that they and the bookkeeper are dealing while using the same software so that all the bookkeeping and financial records are communicated and transferred correctly without the chance of a mistake. Either the business itself or the bookkeeper has to purchase the software so that they can legally get registered.
Once a business hires a virtual bookkeeper, he/she is paid according to the payroll policies of the company that applies to the employees working within the office premises. In case a bookkeeper works as a private contractor, he/she will charge the business and receive the payment according to the payment policy of the contractor.
The following is a step-by-step walkthrough of how virtual bookkeeper works to give you a clearer idea.
1- First Consultation: A video conference meeting is held online with the sole purpose of discussing the bookkeeping assignment of the client thoroughly and in-depth to make sure that no confusion or mistakes are given a chance.
2- Legalities: Known as the ‘engagement letter’ by some experts, a confidentiality report has to be established between the client and the business.
3- Bookkeeping software: The business and the bookkeeper have to ensure that they use the same software to ensure the correct transfer and communication of the bookkeeping and financial records. A variety of software can be chosen according to the needs of the business.
4- Clients source document sending procedure: First of all, the clients are sent a checklist that helps them prepare source documents. The required data and guidelines for the organization of the data is sent to the bookkeeper. Various methods are used to maintain bookkeeping online.
5- Bookkeeping Stage: Once the bookkeeper receives the documents of the client, they process the data into the accounting software chosen by the business.
6- Reporting Stage: After the bookkeeping is completed, the financial documents required by the business are processed and sent to the client electronically.
7- Monthly Meetings: As communication is the key to successful virtual bookkeeping, the bookkeeper and the business communicate via online meetings at least once a month.
8- Returning data: The data is stored/posted back to the client or accessed in shared folders or an online storage facility until the bookkeeping record agreement ends.
C- Can anything go wrong?
When done well, the relationship between virtual bookkeeper and the business is very beneficial. In case of the opposite, the relationship falls over, leaving things a bit messed up. Unfortunately, there are some pitfalls associated with virtual bookkeeping, but they mostly occur in limited cases. The most common are:
1- The failure of communication between the client and the overall business means of communication i.e., email, phone, etc
2- The bookkeeper or business fails to deliver the source documents by any due dates
3- The wrong information is transferred between the business and the bookkeeper
4- Misinterpretation of information and instructions between the bookkeeper and the business leading to incorrect outcomes
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