According to the IRS, there are four common tax errors that are costly to small businesses. Underpaying taxes, depositing employment taxes, filing late, and not separating business and personal expenses can all affect your bottom line.
To avoid the financial implications of these issues, you need an expert accountant on your side. Virtual accounting and bookkeeping provide businesses access to experienced professionals who perform regular accounting services.
Outsourcing virtual accountants allows for shared access to financial documentation and accounting software. Keep reading to learn more.
Virtual Accounting Services
To understand how virtual accounting can help your business, you need to know about the services offered. A qualified professional makes it easy to partner and achieve financial visibility.
Some of the main tasks that a virtual accountant will handle include:
- Paying bills and invoicing clients
- Recording day-to-day transactions
- Remitting sales tax returns
- Reconciling bank and credit cards
Let’s go into detail about some of the services that virtual accountants offer:
Bookkeeping
Maintaining your books is a key part of the business. Bookkeeping involves managing transactions through modes of payment like bank transfers or credit cards.
All of your data will be accurately entered into your business ledger by a virtual accountant. Most of these accountants use accounting technology to limit manual data entry and reduce human error.
Using cloud accounting software, a virtual accountant will update your books online without requiring paper documents. They manage day-to-day payments and expenses so you’ll always have organized financial records.
Tax Planning and Compliance
One of the most common challenges businesses face with their accounting strategy is complex financial regulations. If you fail to understand tax codes, you will face financial penalties and might get audited by the IRS.
During tax season, you can seek help from a virtual accountant to ensure you file correctly and get your qualifying business tax deductions.
By ensuring your books are up to date, a virtual accountant will easily be able to file your returns and help your business stay compliant.
Financial Analysis
Your business strategy should be based on data-backed information. A virtual accountant will take a look at your complete financial health and provide you with reports.
Financial reports consist of real-time data to make it easier to check your progress over time. With these statements and financial reports, you gain insights for better decision-making:
- Balance sheets
- Cash flow statements
- Income statements
- Expense statements
Financial reporting is essential to understanding how profitable your business is. Without these reports, you won’t have a complete look at your financial health.
If you own more than one business, comparing your financial reports to one another can help you decide where changes must be made.
If one business is outperforming the other, you can utilize some of the practices within that business to improve the other.
Payroll Management
Many HR teams handle payroll management, but they don’t have to. It might be better to outsource your payroll management to a virtual accountant because the process is so complicated.
Not all HR professionals are well-versed in the payroll tax code. This is something that accountants learn during their training and experience.
Virtual accounting solutions can help you stay ahead of payroll management. Untimely wage payments could lead to a lawsuit and other consequences.
If you fail to pay employees on time, you won’t be able to retain them. Unhappy employees are also unproductive ones. Losing employees and seeing a decrease in productivity can negatively impact your bottom line.
Benefits of Virtual Accounting
Virtual accountants are a vital resource for businesses that require better financial visibility. They can help you implement effective accounting practices and avoid common challenges.
These are the benefits you’ll reap with virtual accounting:
Cost Savings
Every business wants to save money where it can, and a virtual accounting service can help you do that. Hiring and training an in-house accountant requires you to spend a lot of money on employees.
Virtual accountants commonly work on an hourly basis, but some charge a flat fee instead. When your business needs to scale up or down, a virtual accountant can help you do that.
If your business has more than one location, you won’t need an accountant for each of them. A virtual accountant can oversee the financial aspects of multiple business branches.
Because they are virtual, they don’t need to travel to every business location. They can process all financial information remotely with secure accounting software programs.
Eliminating the need for a physical bookkeeper at every business location is another way you’ll reduce labor costs.
Access to Skilled Professionals
Virtual accounting businesses provide clients with skilled professionals. They hire skilled teams who have experience in multiple industries, in addition to understanding accounting and bookkeeping best practices.
A skilled virtual accountant will guide your business through financial analysis, tax compliance, and tax preparation.
In contrast, you could hire a skilled in-person accountant, but this is likely to cost you more. Virtual accounting is the ideal solution for businesses that want to save on overhead costs.
Increased Scalability
As you experience business growth, your financial needs will change. You will have to scale up your financial requirements without disrupting business operations.
An accountant like Brendon Pack helps companies with consistent growth and improved efficiencies.
Virtual accountants offer flexibility and scalability that in-house teams can’t compete with. For a lower price, you can work with a virtual accountant during your peak season without having to bring someone on full-time.
Partnering with a virtual accounting company allows you to double your requirements for employees without having to pay for extra fees like employee salaries and benefits.
With an in-house team, you continue to pay for resources you don’t need when peak season slows down. You only pay for what you need with a virtual accountant.
Data Security
Accounting for businesses requires a level of security that virtual accountants can provide. Data security is not only beneficial to your business, but it’s often a requirement in certain industries.
Virtual accountants understand that data will be exchanged through virtual manners, but they know how to avoid compromises and data breaches. Experts leverage cloud accounting software with secure storage options.
When you need to share your files with your virtual accountant, they will ask that you encrypt the data. Attackers won’t be able to manipulate encrypted information.
Modern Technology
Outdated technology can negatively impact your accounting solutions. Virtual accountants utilize modern and up-to-date software programs to benefit your business.
Virtual accountants are well-versed in these programs because they use them daily. You don’t have to worry about training an in-house accountant on the latest accounting technology.
If you have a finance department, hiring a virtual accountant can still be helpful. You’ll free up time your employees would normally spend on tedious bookkeeping and accounting tasks.
Your employees can focus on other essential business operations to help them excel in new areas.
Eliminates Accounting Errors
Recordkeeping mistakes that go unnoticed can cause cash flow problems. A virtual accounting expert eliminates these errors because of their experience and automatic solutions.
Automated accounting programs help ensure your business records are accurate and eliminate the risk of human error. Human error is the cause of many data breaches.
The last thing you’ll want is for your financial information to be leaked to the wrong person. If you hold the financial information of customers, you’ll need to avoid problems that could lead to data breaches at all costs.
You benefit from a professional and their accounting tools without having to buy extra services or resources.
Increased ROI
For your business ROI to continue on an upward trajectory, you need to ensure your finances are in a good place. This starts and ends with a great accounting professional.
A virtual accountant can help your business increase its ROI by maintaining accurate records. An expert will perform business auditing, forecasting, budgeting, and overall financial management tasks.
With the information from past records, a virtual accountant will help you plan out costs for the future. They will look for trends that are likely to reoccur in peak and down seasons for your business.
Saves Time
One of the best business tips you can follow is to seek help with tasks you might not be great at. You started a business because you wanted to be your own boss and share your passion with others, not because you wanted to be an accountant.
Luckily, you don’t have to be. By outsourcing a virtual accountant, you’ll have more time to grow your business.
You’ll have peace of mind knowing your books are being taken care of by a professional, leaving you to handle the things that matter most to you.
Is Virtual Accounting Right for Your Business?
If you want to save money and increase your ROI with accurate bookkeeping and accounting, consider outsourcing a virtual accountant. These professionals have experience in the industry to help your business remain profitable.
Don’t worry about hiring an in-house accountant. There’s no longer a need for traditional accounting and bookkeeping services, especially if you are just starting a business.
Reap these benefits today by hiring a virtual accountant. Don’t forget to keep coming back to our blog for more business articles like this.
