No firm in 2022 can do without accounting, however, the emergence and growth of virtual accounting might just be a game-changer. It helps you achieve much higher efficiency in one of your firm’s main infrastructural aspects, but even this is just the tip of the iceberg.
While the financial processes of a small enterprise may not be particularly difficult to understand, for a layman to handle them properly would be incredibly time-consuming. In the case of an entrepreneur, this would be a thing taking you away from where you’re the most needed. Still, it’s not just about saving time. Here are some of the top advantages and disadvantages of virtual accounting services that you need to focus on.
Advantages of Virtual Accounting
The advantages of hiring virtual accountants are numerous and make for quite persuasive arguments. Here’s why so many people choose to work with virtual accounting services in 2022.
Saving resources
One of the primary functions of having an accountant is to provide you with a chance to handle your assets far more efficiently. An accountant is not just a bookkeeper. They’re also a financial advisor. This means that in a scenario where you have new investment in mind, they might be able to provide you with insight about factors like opportunity loss.
Aside from this, they can help you take better care of your legal obligations. Failing to pay your taxes in time will result in fees and suits. Handling financial processes in time, in general, improves the creditworthiness of your enterprise and helps you avoid unnecessary late fees.
They’re also well connected and well-informed, which means that they might be aware of grants and deductions that would completely slip your radar. This converts into a direct money-saving that you just can’t afford to ignore.
As we’ve already mentioned in the introduction, an accountant saves time, and time is a finite resource, as well as one of your most valuable assets. Any way you look at it, you get a more resource-efficient method of handling these things.
More efficient business practice
The main reason why you need to hire a professional regardless of what you’re doing is that you get greater accuracy and a lower chance of error. Seeing as how accounting accuracy is everything and an error can cost you dearly, these two reasons resonate even more strongly than before.
The next thing you need to understand is that by collaborating with a virtual accounting service, you can achieve a lot simpler internal organization. You get one fewer department to micromanage, which helps you focus on the rest of the company. This way, you get access to the top virtual bookkeepers and accountants available.
In accounting, it’s all about knowledge and experience. This means that even if you could do something, a professional will use more reliable accounting practices. They’ll get things done quicker and always know what they’re doing.
Remember that an accountant may help provide you with a timely warning. This means that there’s a lower chance of getting caught in fraudulent activity. After all, a lot of times, an entrepreneur makes a mistake due to not being aware of it being a mistake. Then again, if there’s someone trying to scam you or give you bad financial advice, a virtual accountant can act as your safety net.
Consistency and scalability
The hiring process can be incredibly difficult, especially when hiring professionals. Chances are that, without a background in accounting, you won’t know exactly what you’re looking for. Then again, what if someone quits (for whatever reason)? How will you make up for this talent loss? The truth is that when outsourcing, this becomes someone else’s problem.
This is actually one of the biggest advantages of outsourcing your accounting – you make a deal and get a flat fee charged for the services. You don’t have to hire or internally organize an accounting department. Second, you don’t get to manage different payrolls of the accounting experts. If someone leaves, they’re often replaced without you even noticing much of a disturbance.
The next major perk of virtual accounting is definitely the scalability of this option. Regardless if you are a small, medium, or large enterprise, hiring virtual accountants is always a viable choice. A lot of accounting platforms and virtual accountant agencies offer various plans (with various pay grades). Your big advantage lies in the fact that you can shift between them as your circumstances change.
Disadvantages
Naturally, outsourcing to virtual accountants comes with its own set of caveats. Here are the top three concerns that the majority of entrepreneurs and managers have before they start working with virtual accountants.
Security concerns
The biggest fear that the majority of enterprises have when working with an outside company are various security concerns. While this is always true (whenever outsourcing is discussed), when it comes to accounting, there’s simply too much accounting material.
Research who you’re working with in order to avoid this. It’s the same as ever – potential partners have their reputations. In order to stay on the safe side, you need to inquire about who you’re actually dealing with. It’s not a simple task, but it’s really the only way to minimize the risk in this regard.
Communication delay
While modern means of communication may help you establish great communication with your virtual staff, the truth is that it still won’t be the same. Now, there’s a bit of prejudice here, as well, seeing as how people often overestimate how well communication works between in-house teams. In other words, your communication is as good as you make it.
Sure, there are additional difficulties with outsourced teams, like the fact that they might be in a different time zone, etc. One thing that all of this has in common is that it’s up to you to make it work. Discuss all of this while hiring, and make sure that you assume a firm stance from day one. While you don’t want to be too unrealistic in your demands, you need to have some requirements.
Specific knowledge
Now, when stressing this one out, it’s important that you understand we’re comparing accounting services to having an exclusive in-house accountant. A virtual accountant is likely to take other clients, and while they aren’t neglecting you, they might lack the specific knowledge that comes from being exclusive to a single client.
However, this situation is not as bad as you think. Sure, specific knowledge helps quite a bit, but your company’s accounting processes may not be as affected by the peculiarities of your industry as you would expect them to be. Therefore, your potential virtual accountant may provide a far superior service than you give them credit for.
In Conclusion
The truth is that working with virtual accountants doesn’t differ that much from any other form of outsourcing. The biggest change is that it all takes place in a digital environment, which makes collaboration and communication somewhat simpler (but at times less reliable).
As you can see, the benefits by far outweigh the downsides in the majority of scenarios. Therefore, if you’re looking for someone to handle your accounting services, hiring virtual accountants or reaching out to a firm that provides virtual accountants is a sound move.