Bookkeeping is an indispensable activity in any business. It involves recording the various financial transactions and preparing the trial balance. This sets the tone for making correct business decisions. Thus, bookkeeping is a must, irrespective of the type and size of the business. The pandemic has changed the ways of the business world. The relevance of virtual bookkeeping services is being recognized more in these changing circumstances.
The question of the hour is: when is the right time for a business to go for virtual bookkeeping? Rather, is there a right time or criteria for that? Though bookkeeping is not rocket science, it is still tricky. Remember the famous rule, credit what comes in, and debit what goes out. It sounds simple, but difficult to practice. The slightest errors can prove costly.
The decision to opt for virtual bookkeeping services lies at the sole discretion of the decision-makers of the business. There is no hard and fast rule on when or whether to opt for virtual bookkeeping services. The secret of success is in recognizing the indicators that a change is imminent and in understanding the advantages of the same. It is sagacious to look into those to help decide whether your business will do good with virtual bookkeeping services.
The 5W analysis is one of the most common ways to understand an issue and devise a business plan. We will apply the same strategy, emphasizing more on why and when, to understand about the virtual bookkeeping services.
1. Economic gains
Every business understands the language of money. Any business aims to increase its profitability. So, it is natural for businesses to look into ways to reduce costs. The cost of employing an in-house bookkeeper is higher when compared to a virtual one. This is mainly because, besides the salary, in-house bookkeepers receive bonuses and other perquisites. This adds to the cost of the company. These additional costs are not applicable to virtual bookkeepers who work remotely. The payment is only for the services rendered.
2. Re-focus on business
It is common for small businesses or startups to work on a shoestring budget. This means that the few key resources must take up the responsibility of doing the multiple, daily time-consuming tasks. These, albeit unavoidable, can shift the focus away from the business. The solution is to outsource them so that the business gets its required attention. An example of one such task is bookkeeping. Virtual bookkeeping will help the business get back on track.
3. Aid business growth
There is a direct relation between sustenance and appetite for growth in business. Scalability in business depends on multiple factors. The business world is dynamic and adaptability is one among them. This becomes easier if the decision-makers can make good financial decisions. The decisions depend on efficient bookkeeping, as they are the stepping stone for correct accounting. When the finances are tightly strapped, the burden of work increases with the few resources, and the efficiency decreases. Virtual bookkeeping is cost-effective and is the perfect solution in such cases.
4. Better problem solving
As explained earlier, bookkeeping is the initial step to proper accounting. Bookkeeping involves tracking and recording the daily account receivables and payables and preparing the trial balance. This helps in preparing and understanding the financials of the business and to take necessary actions when required. Virtual bookkeepers give periodic reports to update about the finances. This gives ample time to identify the issues and solve them.
5. Setting good financial discipline
It is the duty of the bookkeeper to track and record every transaction. So, the bookkeeping will have a snowball effect, if not completed within time. It will become difficult to handle. Virtual bookkeepers can set the right rhythm to the financial culture of the business. It is pertinent to any business to maintain the financial discipline to achieve greater results.
6. Technical support
It is expensive for a startup or small business to implement financial software. Virtual bookkeepers make use of popular financial software to provide error-free service to their clients. The software will ensure the safety of the data as well. In this way, small businesses and startups will also be able to enjoy the advantages of technology at a cheaper rate.
7. Accessibility anytime, anywhere
Every business needs to access its financial data with ease. Virtual bookkeepers make use of cloud computing to provide easy accessibility to their clients. The digital transformation has increased the possibilities of business across industries. Along with it comes the need to access the data anytime and anywhere.
Virtual bookkeepers are well-experienced professionals who know the importance of providing top-notch service to their clients. They understand the importance of providing the correct data on time. Data security is of foremost priority. They will be ready to take in a sudden influx of more work. Professionalism is in demand in today’s business world.
It is equally important for a business to choose the right person or team as their virtual bookkeeper. Diligen has proven its worth as a good team player. They understand the pulse of the business and the need for the financial data to be ready at the beck and call of the business.