Financial services, particularly bookkeeping, are essential for any business, and when done properly, can establish the foundation for sustainable business growth and high performance.  In general, business owners have three options: they can do their bookkeeping themselves, hire a full-time bookkeeper, or outsource their bookkeeping to either local or remote bookkeeping firms. While business owners can keep costs low by doing the books themselves, particularly in the early stages, they can also end up making costly mistakes if they are not experienced or get too busy to give the responsibility enough time. Hiring a full-time bookkeeper may not always be a viable choice either, especially when a business is growing and transaction volume is low. In such cases, the most cost-effective avenue may be hiring a remote bookkeeping service.

 

 

What is remote bookkeeping?

If business owners are busy with the operational side of their businesses, and/or do not have enough work to keep a full-time bookkeeper occupied, outsourcing to a professional bookkeeping service can be an effective solution.

Traditionally, bookkeeping services were firms operating locally; however, a growing number of bookkeeping businesses are now making their services available online. This is called remote bookkeeping.

Remote bookkeeping is becoming increasingly popular, as more bookkeepers realize that they can expand their reach and target a wider market by offering online services. In addition, businesses have also begun to realize the benefits of investing in online bookkeeping solutions.

 

Things you need to know before hiring a remote bookkeeping service:

Hiring a remote bookkeeper may seem like a risk at first. It requires business owners to hand their private data over to people they have never met before and may never see in person. However, while there is no way to fully ensure that data will be protected and handled responsibly, this should not deter business owners from exploring the possibility of hiring a remote bookkeeper.

 

 

There are plenty reputable bookkeeping firms operating in the market, and in order to weed out the good from the bad, business owners can begin by asking the following five questions before they make a decision:

 

How much experience does the firm have?

This is an important question to consider when you are hiring any bookkeeping service, whether it be local or remote. Bookkeeping errors such as tax miscalculations or missing an expenses can be costly, so business owners need to ensure the bookkeepers they hire are professional and seasoned, with experience in industries relevant to their business.

 

 

What kind of accessibility and availability are they offering?

Remote bookkeeping services can be cheap, but not always reliable. Business owners need to understand the kind of availability they are offered to avoid any last-minute complications and delays. For example, if an owner finds lost receipts that should be logged, will the bookkeeper be readily available to make an adjustment or will someone be free to talk over the phone about any questions or concerns that come up? Most reputable remote bookkeeping services are flexible and accommodating, but sometimes they end up charging for extra time and unexpected workloads.

 

 

What do their existing customers say about them?

With remote bookkeeping services, it is not always possible to arrange a face-to-face meeting, so business owners may need to resort to other channels to assess a firm’s reputation. One of the best ways to conduct due diligence is by seeking out genuine reviews from businesses who have used or are using the service.

 

 

Which accounting systems are they familiar with?

A lot of remote bookkeeping can be outsourced to foreign countries such as the Philippines. While the General Accounting Principles (GAP) are recognized worldwide, there are multiple kinds of accounting systems operating in different countries in the world. For this reason, it is important for business owners to gauge the skillset of the firm they are considering, as well as the system and guidelines under which they operate. In addition, the bookkeeping firm also needs to be familiar with the accounting regulations that apply to the geographical area in which their client’s business is based.

 

 

Do they have a cyber insurance policy?

Given the fact that their data will be stored online, business owners need to ensure that a remote bookkeeping firm has taken measures to protect clients’ information from cyber-crime. Having a cyber insurance policy in place means that a remote bookkeeper has good security infrastructure (which is a prerequisite for the issuance of a cyber insurance policy), and business owners can be assured of some compensation in the event that their data is breached.

 

 

Benefits of using a remote bookkeeping service

The potential risk attached to using remote bookkeeping services is obvious; however, after taking the five precautionary points mentioned above into account, business owners should not have much cause for concern. Remote bookkeeping can be a convenient and cost-effective solution for a business, and there are a number of benefits that come with using a remote bookkeeping service:

 

Affordable Fees

Many remote bookkeeping services outsource their operations to countries where the cost of labor is relatively low. This means that they can keep their costs low, and transfer these savings to clients in the form of lower prices, without compromising the quality of the services offered. In fact, business owners may find that remote bookkeeping services might even come with a few extra benefits.

 

Faster Invoicing

Online bookkeeping platforms usually aid the process of invoicing, and since virtually all remote bookkeeping services operate on the web, that means your invoices can get processed faster with fewer paper records to manage.

 

 

User Friendly

Remote bookkeeping services make it easier for business owners to monitor and understand the work that is being done for them. They will not need to enter any data by themselves, or perform any complicated, time-consuming accounting activities. A majority of what they need to do is scan and send the relevant paperwork to their remote bookkeeper, who will ensure that everything is properly recorded and reported. Business owners can easily log on periodically to view their transactions, or read reports as well.

 

 

Preparation for audits

The IRS conducts random assessments of businesses, and if business owners have been doing their own bookkeeping, they may have made a couple of errors which might prove problematic. Remote bookkeeping firms are typically very professional and employ stringent recruitment processes. According to Capterra, of the people who switched their bookkeeping systems to cloud-based systems, 52% reported more accurate accounting records with less errors. This ensures that businesses are fully prepared to undergo any IRS audits.

 

 

Data Security

Business owners who care about the safety and security of their data will welcome the option of moving from the model of physical record keeping to digital/cloud based record keeping. A reputable, professional remote bookkeeping firm will ensure that clients’ data is processed and stored securely, safe from unpredictable events (such as fires and floods) which can destroy physical records.

 

 

While many business owners can be wary of hiring a remote bookkeeping service, it can be quite convenient and cost-effective, as long as you follow some of the tips in this article and conduct research to ensure the service meets the requirements of your business. Once a good fit is found, the benefits of a remote service become more apparent.