Business

What is Virtual Bookkeeping?

If your business involves a lot of digital transactions, virtual bookkeeping can be very helpful. Virtual bookkeeping can help you manage all cash transactions faster and easier by placing them in categories such as Shopify, credit card and debit, and PayPal.

Virtual bookkeeping is more appropriate for certain businesses, such as:

  1. Software engineers and software designers who are freelance
  2. App developers
  3. Ecommerce stores
  4. Online bookings and payments for health and wellness professionals
  5. Freelance illustrators, writers, and videographers

These are the top benefits of hiring a bookkeeper:-

  • Need help with bookkeeping?
  • Track your expenses to determine which ones are tax-deductible.
  • You can’t do virtual bookkeeping alone. It takes too much time and energy.
  • It is not easy to know how much cash your business has or what your monthly profits are.
  • Last year’s tax season was difficult for you. This led to stress.
  • Your accountant has been working hard to resolve your bookkeeping problems by the end.

What’s the difference between an accountant and a bookkeeper?

We must start by giving an explanation before we can discuss. First, let me explain the differences between an accountant and a bookkeeper. Before cloud accounting, a bookkeeper would collect receipts, bills, and statements from credit cards. These documents are called source documents and can be entered into the desktop accounting program. They might have assisted with GST/HST remittances and payroll. The accountant would then take the information and adjust it using year-end journal entries. This will correct any errors or missing information. The adjusted data is used to prepare the year-end financial statements and file the corporate tax returns. It depends on how long it took to exchange the final numbers, it could take 3-6 months or more after the year ended. The Accountant and the business owner would then meet to sign off on the final numbers, and have a general discussion about the business and tax planning.

The above scenario shows that the accountant and bookkeeper do not have a relationship. Any bookkeeping problems that are noted at year-end and corrected may be carried over into the following year. Only the accountant has access to the books at year end. To be able complete the bookkeeping, you need to have some accounting knowledge. It was more difficult to find the right information and training for desktop software.

Read More: Payment Gateway for Website of Your eCommerce Business

Cloud Accounting: The Difference

Cloud accounting allows for the automation and use of apps to enter the source documents. A business owner might take a photo of their receipt with an app on their phone and then upload it to the accounting program. If it is possible, the program will suggest an entry based upon previous transactions or match transactions already entered. Cloud accounting software offers invoice and quoting capabilities so that business owners can use them (there are also phone apps) as well as the ability to integrate “Point of Sale” systems. The accounting software can download bank statements and credit card transactions. These transactions can then be easily assigned to the income or expense account by the bookkeeper. This technology reduces the amount of data entry required for bookkeeping. It also makes it more convenient to work from anywhere, anytime.

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