Online vs. Virtual Bookkeeping and Accounting Services (What Are the Major Differences?)

Regardless of the size of their business, owners are always thinking of ways to keep costs down without sacrificing the quality of their services or products.

An effective way to achieve this is by hiring professionals to handle tasks that may fall outside your in-house staff’s capacity, instead of hiring full-time employees.

For instance, in terms of a marketing agency, they may handle their own sales but outsource graphic design needs to freelancers or an outside design firm.

With the ever-evolving digital world we live in coupled with the increasing demands for business services, there are many options for hiring bookkeepers and accountants virtually.

But how can you determine who will be the right fit for your company? And is there a difference between online and virtual bookkeeping and accounting service providers?

Keep reading to discover these differences to make the best financial decision for your business.

Let’s get started.

The Differences Between Virtual and Online Bookkeeping and Accounting Services

While they seem similar, online and virtual bookkeeping and accounting services do differ.

Virtual Bookkeeping and Accounting Services

In many instances, people use the term ‘virtual’ to signify that the service is available and can be obtained through the internet. This can mean that you can work with someone online, but they don’t need to be available locally. The primary device used to communicate with them is through computers and the internet.

However, ‘virtual’ can also refer to an individual working from home. In such instances, bookkeepers and accountants may lack the necessary training and access to robust technology to perform their job. They might also not have access to associates for advice. And, if they fall sick or go on vacation, they might not be able to arrange for a back-up. This makes them unsuitable for handling management accounting. It can also lead to inaccurate finances and mistakes, along with unintentional regulatory non-compliance, messy accounting or bookkeeping systems and risk of fraud. Over time, such neglected financial warning signs can lead to the failure of your business.

In a nutshell, hiring a virtual accounting and bookkeeping service provider is similar to hiring a part-time employee to help with your accounts receivable, accounts payable, payroll management and other related tasks.

1. Online Bookkeeping and Accounting Service

Online bookkeeping and accounting services typically refer to more robust services available through the internet compared to virtual bookkeeping. The organizations that provide these services offer packages that come with a monthly and annual reporting structure. It is a suitable model for smaller businesses that do not have major financial requirements. These services can go a long way in streamlining your in-house bookkeeping and accounting tasks.

Online service providers handle all the functions of a part-time bookkeeper, and you don’t have to worry about outdated practices or inconsistencies with their work. They may handle the financial maintenance of your organization including record-keeping, payroll, reporting, and taxes.

By outsourcing the work to a third party, you save money by reducing the costs associated with hiring full-time employees. Additionally, your in-house staff will be free to focus on what they do best, instead of focusing on tasks that might be out of their area of expertise.

2. What are the benefits of outsourcing bookkeeping and accounting services?

By outsourcing your bookkeeping and accounting services, you have the power to transform your business for the better. With the right outsourcing partner, you have access to a fully-functioning accounting and bookkeeping department that has all the capabilities of in-house staff. And they are available without the same price tag.

With an outsourced bookkeeping and accounting service provider, you can avoid the hassle that often comes with having in-house staff such as training, staff scheduling, and turnover. Additionally, you will continue to receive the financial insights and data similar to what you would with a back office.

Whether you decide that an online or virtual bookkeeping and accounting service is a better option for your business, be sure to check references. This will go a long way towards helping you figure out if the company is the right fit for your business. As with choosing any product or service, it’s best to do your due diligence to make sure you make the best decision.