Rise of Virtual Accountants

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Published: May 9, 2022
Last Updated: February 13, 2025

In this fast-paced digital innovation, businesses adopt online or virtual means to resolve their key issues. Online or virtual services allow businesses to focus on their core activities and worry less about other tasks. Online or virtual services have given rise to virtual accountants who look after all the business’s accounting needs. A virtual accountant is a person who performs all the accounting services for a business remotely. The work of a virtual accountant is similar to that of an on-site accountant. However, a virtual accountant work outside the business premises. Virtual or online accountants provide crucial accounting advice that helps businesses make better financial decisions, become law compliant, avoid cash flow problems, and file taxes on time.

Accounting and bookkeeping are the processes where most businesses fall behind. Especially small and growing businesses find difficulty in managing their finances. But hiring an accountant is an absolute must to ensure a strong financial standing in the long run. However, a virtual accountant can save small businesses from major financial blunders. Let us understand the reasons behind the rise of VA for small businesses:

Also Read: Unlocking Business Growth with a Virtual Accountant

Reasons For The Rise Of Virtual Accountants

• Saves time and money- In the initial stages, a small business needs sufficient time and money to focus on building customer relationships, managing sales, and keeping a record of the financials. The right virtual accountant will provide unlimited support to small businesses through expert accounting advice. This allows businesses to invest more time strategizing and analysing the major business matters. A virtual accountant can be temporarily costly, but saves many costs in the long run.

• Expert opinion- The proficiency of virtual accountants enables small businesses to have expert guidance and opinion in every financial decision. Virtual accountants are professionals from accounting and taxation backgrounds who give honest insights and simplified solutions to the business. They have years of practical experience and extensive knowledge in their field, bringing expertise to the business operations.

• Real-time information- All virtual accountants use cloud-based accounting and bookkeeping software to cater to accounting needs. Cloud-based software features allow businesses to view and access all the financial data in real-time. Every financial information is updated and can be accessed easily by the permitted individuals. With a virtual accountant, businesses are less dependent on particular individuals to access their financial data; they can access everything independently.

• Reduce overhead costs- A virtual accountant reduces overhead expenses since he works on a contract basis, which saves the business from employee benefits, payroll taxes, insurance, and other employee-related benefits. Also, they charge an agreed amount as per the contract and not more than that. In this way, small businesses can invest the saved money in core business activities.

Apart from money, a lot of time and effort can be saved with the help of a virtual accountant. An on-site accountant is an old idea; businesses are migrating towards virtual accountants because of the countless benefits provided by virtual accountants. But the important question is, have businesses stopped hiring an on-site accountant? An on-site accountant is good for a business but has limitations that cannot be avoided. On the other hand, a virtual accountant expands and diversifies business opportunities. Let us learn the difference between the two to understand them in a better way:

Traditional vs. Virtual Accountant

Points of distinction	Traditional accountant	Virtual accountant
Location	A traditional accountant works inside the office premises.	A virtual accountant works remotely with the help of an internet connection.
Flexibility	Traditional accountants have to pay as per their salary. They charge a decided amount whether the business is small or big.	Virtual accountants offer different plans or packages as per the business requirements. A business can choose any plan according to its budget. In this way, a business only pays for what it needs.
Cost-effective	A business incurs expenses on payroll taxes, employee insurance, employee benefits, and other expenses like providing office space and supplies. This adds to the overhead expenses of the business.	A virtual accountant needs no office space, supplies, or employee benefits because he works remotely. In this way, it becomes a cost-effective option.
Work as per your time	Generally, traditional accountants are not available after the working hours of the business. They adhere to the office timings and do not entertain queries after that.	A virtual accountant provides 24/7 support to businesses. Business owners can view and access any information via cloud-based technology without depending upon virtual accountants. This allows owners to work as per their timings.
Data security	There is a threat to the confidential financial information of the business. A traditional accountant might lose the company records intentionally or unintentionally. Also, a traditional accountant has complete information about the business, which might be misused or by him.	With virtual accountants comes the benefit of cloud-based technology. The financial data is completely safe because it is stored in the cloud and can be accessed only by permitted individuals. The owners can view and check any discrepancy or misuse of the data.

The differences mentioned above can be considered when choosing between a traditional or virtual accountant. However, a business should hire a virtual accountant per their own business needs, requirements, and budget. But is there a right time to hire a virtual accountant or a traditional accountant? Let us look at when you need to hire a VA for your business.

When Do You Need to Hire a Virtual Accountant?

It is known that virtual accountants offer many business opportunities, but when do businesses need to hire a virtual accountant?

A small business with a tight budget that needs an accountant can go for a virtual or online accountant for a limited period. As mentioned above, online accountants for small businesses are more cost-effective than traditional accountants. A virtual accountant charges on an hourly basis, flat rate per the contract or even on a project basis. Also, it does any require any in-house benefits that are provided to a full-time accountant.

In the case of virtual accountants, a business pays for what it needs and can also take advantage of additional services by specifying certain services. However, a full-time accountant provides all the accounting services and charges the same throughout.

Thus, a business with a tight budget that wants to utilise maximum benefits can go for a virtual accounting option. It is easier to carry out meetings and transactions in a remote world, enhancing collaboration among the company members. Also, the owners need not rely on their accountants for every minute detail; they can easily access all the financial information.

A big and established business has no budget restrictions, so they can incur employee-related expenses and provide employee benefits by hiring a full-time accountant. The hut hiring process itself is not very effective as you will have to incur costs on hiring, training and overhead expenses. Apart from the money, you might also lose out on opportunities and suffer a lack of efficiency when employees take leave or resign, which is quite unpredictable.

A virtual accountant is a qualified accountant, but requires a certain skill set. Apart from the basic accounting skills, a virtual accountant needs to have certain skills. Let us look at the skill set of a virtual or online accountant.

Things to Look For in a Virtual Accountant

• Technology-driven- A virtual accountant should be well-versed in technology because they need to use cloud-based accounting software for all the accounting tasks. Cloud accounting software like Xero, QuickBooks, FreshBooks, etc., is some of the software commonly used by businesses.

• Virtual communication skills- A virtual accountant needs to be good at virtual communication because he contacts the owners online. A virtual accountant is not connected with the business physically; rather, he carries out everything remotely, which requires him to be efficient in virtual communication.

• Flexibility and adaptability- Virtual accountants work for various businesses, so they are expected to be well-versed in different industries and adapt to compliance associated with these industries. A virtual accountant is expected to be flexible in his work and ready to adapt to new processes. He should be willing to offer flexible work timings and support to the business owners. The flexible nature of virtual accountants can be a saver for businesses to improve their accounting processes.

FINAL WORDS

The revolution in the digital world has increased the scope of virtual accountants. Virtual accountants’ cost-effectiveness, flexibility, and tech-savvy nature have attracted businesses. Hiring a virtual accountant can help grow a business by handling all the accounting tasks. Doing so enables businesses to have ample time for strategy formulation of high-level business activities.