We once met a new client with a part-time bookkeeper who worked three to four days every week at the head office in Ottawa. The CEO of this not-for-profit organization lived in another part of the country, and would fly into Ottawa once every few weeks to sign the cheques. It wasn’t exactly the most artful and efficient solution, but it’s how they made things work.
When the part-time bookkeeper left for another job, however, we helped create a virtual accounting team to support the operations. Everything is now online and accessible. Once a week, the CEO approves electronic payments from his home, usually while he’s eating his breakfast.
Technology is dramatically changing the way small businesses handle not just payments, but every aspect of their accounting systems.
In the past, a typical start-up would work with an accountant or bookkeeper who popped by every few months. Maybe the owner would hand that person a shoebox with a bunch of receipts and other documents in it.
As the business grew and its requirements increased, a part-time bookkeeper would be hired. Eventually that role might become full-time. A decision would be made about which basic accounting software package to use. Almost everything else would be done manually.
Now, the landscape of options has broadened enormously. The solutions that once were available only to large businesses are now universal. Thanks to a wide range of new software, many small businesses now completely automate and outsource their accounting.
There are a number of advantages to going virtual. First is that you don’t have to hire or manage any staff. Business owners who don’t know a lot about accounting sometimes find it challenging to supervise an accountant. A virtual accounting department is efficient and completely scalable. Our clients rely us to have capacity on our end, rather than build it on theirs. They save the cost of office space, computers, benefits and bonuses. They also have access to us five days a week, 52 weeks a year, rather than just when their part-time employee is in the office. And they can focus on what they do best, rather than manage an employee in an area where they lack expertise.
A virtual accounting solution is scalable not just when the business grows, but during the annual cycle. If you need extra help at a particular time of year, you don’t need to hire an extra body or go to a temp agency. And rather than rely on one employee to meet all your needs, you get the benefit of a wide range of experts to support your business.
Another advantage is continuity. Many small businesses find it frustrating when the bookkeeper they’ve hired and trained leaves for another job, meaning they have to start over with someone else.
Perhaps most importantly, a virtual accounting system allows you to automate your entire accounting process. There are new tools that can help you manage electronic payments, expense reports, cash flow, and more. You can scan invoices and receipts on your phone and have them automatically coded and entered into your system. And there are sophisticated tools that can help you forecast, conduct business cases, and get results more quickly.
Switching to virtual accounting is a leap for some businesses. But most company owners aren’t experts in administration or accounting, or the requirements of compliance. Technology allows you to not only outsource your accounting, but get access to valuable tools and the knowledge of experts. For many businesses, it’s an elegant solution that turns accounting from a compliance obligation into a powerful resource that supports growth.