Did you know that the majority of small business owners spend more than 41 hours on tax preparation a year? If you are an entrepreneur or small business owner, you can likely relate to this statistic. It’s quite possibly your spending more time on tax preparation and bookkeeping than you should be.
If you are not fond of bookkeeping, you are not alone. Forty percent of small business owners say that bookkeeping and tax preparation is the worst part of owning a business. The financial cost and time it takes to manage administrative duties are two of the dreaded tasks about being a small business owner.
Are you having your bookkeeping done by an expensive firm, or are you doing it yourself only to find the process confusing and time-consuming? If you are in this situation, you will be happy to know there is an affordable option for your bookkeeping. Outsourcing allows you the ability to have a professional virtual accountant from Latin America provide affordable help for a wide range of administrative duties. Hiring a virtual accountant is an affordable and potentially attractive option for your company.
Save on Employee Costs
Since a virtual accountant would be working remotely, you will not have to pay for office space or benefits. What is the real cost saving over employing a full or part-time employee?
Save on Time
As you likely know, solid accounting practices can take a significant amount of time away from other tasks. Maintaining the books, tracking expenses, preparing for taxes, and making sure vendors are paid can quickly become daunting. It may feel better doing it yourself, but you should be working on higher complexity things. Hiring a virtual accountant ensures that you have the time you need to work on your most crucial tasks. This also allows you to maintain a healthy work and life balance.
Get a Handle on Your Income Sources
If you are working with a variety of clients or have multiple sources of income, tracking them all can become difficult. A virtual accountant can help you organize these accounts and create detailed reports of all your income and expenses. These reports can give you insight into which clients and partners are bringing buy pocket protectors in the most revenue. As a result, you can make decisions about how you need to move forward with specific clients or partners. This will allow you the ability to re-evaluate your profit-making strategy and see if anything needs some tweaking. This is where a virtual accountant can be a very helpful addition to your business.
Ensure You are Getting Paid
Are your invoices up-to-date? Have your clients paid you, or are they in danger of facing penalties for not submitting payments to you in a timely fashion? Your virtual accountant can take up the task of sending invoices, reaching out to clients that have not yet paid, and informing them of the penalties for late payments. You may not have the time to track who has paid you. Therefore, a virtual accountant can take the stress of this away by taking over this part of the administrative duties. You can then feel secure in knowing that you will have someone monitoring the entire invoice process. So all your bills are paid on time and thus avoiding any late fees.
Understand your Financial Standing
A virtual accountant can also manage the financial records that inform you of how your company is performing. Virtual Accountant’s with bookkeeping experience can create balance sheets, reconcile bank and credit card statements. As well as your accounts payables and accounts receivables, along with the knowledge to even do payroll. All of these tasks help you understand your income and expenses incurred by the business. While these activities may seem tedious and boring, they are essential in examining how your company is handling the revenue. These tasks also allow a virtual accountant to see if you have healthy cash flows as well as any funds for reserves. Knowing this information can help you create better strategies for how you manage your funds if problems arise.
Prepare for the Future
While it is typically not in the virtual accountant’s scope to handle financial projections, they can provide still provide them. More advanced accounting will require professional firms that are better suited for this type of work. Three of the most critical key performance indicators (KPIs) are your cash flow statement, income statement, and cash disbursement schedule. If a virtual accountant has been monitoring these numbers for the month (and ultimately for the entire year), you can then begin to use that information to make some basic projections about the upcoming quarter.
Also, if you are seeing a slump in these numbers during specific times during the year, then you can better prepare for these periods during the same time next year. Having an accurate look at these factors gives you valuable information that allows you to make better financial decisions and projections regarding your business.
Allow for a More Streamlined Meeting with Your Virtual Accountant
Meeting with an accountant to prepare for tax season can be overwhelming. Most of this anxiety can stem from preparation for the session. Do you have all your statements? Have you sent all your 1099s to subcontractors? Where do you stand overall? Instead of feeling as if you are two steps behind, hiring a virtual accountant can help you prepare for a stress-free meeting with your accountant.
They can arrange all the reports your accountant needs to see, manage the 1099 tax document process, ask questions about any complex transactions, handle duplicate charges on your accounts, and ensure you have all the information you need to meet with your CPA. Having the correct information on the first go-around can also save you from having to locate other information and pay additional fees to meet again. So, work with a virtual accountant to ensure everything is ready the first time.
Tips for Ensuring you get the Best Out of Your Virtual Accountant
Make Sure They are Familiar with Your Accounting System – Try to find someone that has experience with the accounting system you choose to use. If they do not, make sure you have tutorials and other training tools in place to help them become familiar with the features…
Set Up Times for Check-Ins – Your virtual accountant is going to have questions. These inquiries could relate to the accounting system, a recent transaction, your expenses, or a more advanced accounting issue. Therefore, it is crucial that you set times throughout the week to meet with your virtual accountant and provide them with the information they need.
Be Clear about Deadlines – Tax time goes a lot smoother if you have all the documentation you need right at the end of the year. So, make sure to communicate with your virtual accountant about the forms, reports, and information you need for this time. You should also provide them with deadlines for monthly reports and snapshots of your current financial status.
Provide Training – While accounting is relatively straightforward in practice, it never hurts to provide your virtual accountant with some additional training. They could pick up more efficient ways to organize documents, track spending, or even become well-versed in some financial analysis practices. So, talk with your virtual accountant to see where they would like to improve and provide training when possible.
The very thought of a virtual accountant can cause feelings of anxiety and dread. Each time you invoice a client, pay for an item, or compensate a vendor or contractor, money is changing hands. As a result, these interactions have to be tracked. You likely do not have the time to manage these events properly. A virtual accountant with the skill of bookkeeping can help you gain better control of your business finances. Instead of worrying about the payment status of invoices, payroll, or if you are bringing in enough to cover expenses, hire a virtual accountant to handle this for you. Forty percent of business owners spend over 80 hours a year on tax preparation, with the majority spending more than 41 hours.