Virtual Bookkeeping vs Traditional Bookkeeping
As a small business owner, there are so many benefits to bookkeeping. Bookkeepers can help you be audit-ready for any time of year, you’ll have a trustworthy advisor that is up-to-date with tax rules and changes, and most importantly you can focus on your small business without being bogged down by bookkeeping.
Now that you’ve decided to outsource your bookkeeping, it’s time to decide if you want to go with virtual or traditional bookkeeping. Both virtual and traditional methods involve accounts receivable, accounts payable, payroll, inventory, and account management. They will track cash flow and income, and the expenses for salaries, inventory, marketing, etc., then using that, can help you make a forecast and business plan, as well as file your taxes.
Differences Between Virtual and Traditional Bookkeeping
Traditional bookkeeping has the bookkeeper in-house. This involves the process of seeking out potential hires, interviewing people, hiring someone, then training them as your bookkeeper. After hiring them, they become an employee just like any other, requiring you to manage and pay them a salary. They have a physical office in your business where all your records and books are kept.
Virtual bookkeeping is entirely different. How it works is you choose an online provider who then takes over your bookkeeping. Rather than overseeing the entire process of hiring someone then training them, you can be sure that a virtual bookkeeper knows what they’re doing. You are responsible for scanning and sending all of your records and documents they may need. You only pay for the required services, rather than a full-time employee salary and benefits.
Which is better: Virtual or Traditional Bookkeeping?
For a better comparison of the two, bookkeeping can be broken down in terms of cost and time.
As a small business owner, cost is always on your mind. Your ultimate goal is always to increase profit and reduce costs. This can be done by increasing sales, but also by cutting operational costs. The traditional bookkeeping route adds the expense of a full-time salary, employee benefits, payroll and employment taxes, and the cost of furniture, supplies, and office space. You would also have to pay for access to bookkeeping software.
Virtual bookkeeping cuts costs because you don’t have to use up physical space in your business for a bookkeeper, nor do you have to pay for office supplies, furniture, software, etc. On top of that, you are only paying for the services you need, saving you money on employee benefits, taxes, and a full-time salary.
Time is one of your most valuable assets. Wasting time means wasting money, so you have to make sure you’re using it wisely. A traditional bookkeeper involves a lengthy process of hiring, training, and managing them. Overseeing their work is just another responsibility you take on when using traditional bookkeeping.
Virtual bookkeeping saves you plenty of time, both up front and in the long run. There is no need to hire or train someone, and you don’t have to keep on top of them to make sure they’re doing it correctly. Virtual bookkeepers also use more efficient software than you could acquire in-house. This speeds up the process, and lets you use your time on more pressing matters.
The choice is ultimately up to each individual business what method of bookkeeping is best for them. However, the benefits of virtual bookkeeping are apparent, particularly for small businesses.
Thankfully, GritForce Bookkeeping is here to help companies do what they do best! They provide a virtual bookkeeping service, personalized for small businesses and non-profit organizations. GritForce works with you to get your books in order so you can focus on your main priorities. Their goal is to assist you to understand your financial position, enabling you to make smarter, informed decisions.