How to Hire a Virtual Bookkeeper

You’ve found the Rigits guide to how to hire a virtual bookkeeper!

Bookkeeping is something you typically begin doing yourself as a small business owner as you wear the multiple hats needed to get your operation off the ground.

After a while, you find yourself needing to delegate so you can concentrate on what you do best. Enter the virtual bookkeeper, a flexible, cost-effective solution that can take these tasks off your plate.

This guide is also related to our guides on online bookkeeping services for small businesses, how to do bank reconciliations, and 10 best bookkeeping software, apps & tools to use in 2023.

This guide covers:

• Overview
• Identifying Your Needs
• Preparing to Hire
• Tools and Technology
• Managing the Relationship
• Scaling Your Needs

Armed with this guide, you’ll be ready to make an informed decision about bringing a virtual bookkeeper on board. Let’s dive in!

Overview of Virtual Bookkeeping

Unlike traditional bookkeepers who might work from your office, a virtual bookkeeper handles your accounts from a different location, leveraging technology to maintain and update your financial data. 

One of the primary benefits of hiring a virtual bookkeeper is the cost savings. Traditional, in-house bookkeepers require office space, equipment, and potentially full-time salaries and benefits. 

In contrast, virtual bookkeepers work remotely, often on a contractual basis, which can significantly reduce your overhead and employment costs. 

Moreover, virtual bookkeeping offers you access to a wider pool of talent. Geography is no longer a barrier to finding the right fit for your bookkeeping needs. You can hire the best talent suited to your industry and business model, regardless of where they are in the world. 

Identifying Your Bookkeeping Needs

Understanding the scope, required expertise, and frequency of your bookkeeping tasks can help you make informed decisions when hiring a virtual bookkeeper. Let’s break down these aspects to help you assess your business’s specific needs.

Assessing the Scope of Your Bookkeeping Requirements

The scope of your bookkeeping needs depends on several factors, including the size of your business, the complexity of your transactions, and your industry. 

Start by listing all financial transactions that occur within your business, such as sales, purchases, payments, and receipts. Also, consider the need for managing accounts payable and receivable, payroll, and financial reporting.

Determining the Level of Expertise Needed

Not all bookkeeping tasks require the same level of expertise. Simple data entry or invoice management might require basic bookkeeping skills, while financial forecasting and tax preparation demand a higher level of expertise. 

Consider whether you need someone who can simply keep your books in order or if you require someone with the ability to provide financial advice and insights based on your accounting data.

Frequency of Bookkeeping Tasks

The frequency of bookkeeping tasks can vary greatly depending on your business operations. Some tasks may need to be completed daily, such as recording sales transactions in a retail environment. Others, like reconciling bank statements or generating financial reports, might be weekly, monthly, or even quarterly activities.

Understanding the frequency with which various bookkeeping tasks need to be performed is crucial for setting expectations with your virtual bookkeeper. 

Preparing to Hire a Virtual Bookkeeper

Let’s explore how to define your budget, understand the necessary software and tools, and set clear objectives and expectations.

Defining Your Budget for Bookkeeping Services

Your budget for bookkeeping services will depend on the 

• complexity and volume of your financial transactions
• level of expertise required
• the frequency of bookkeeping tasks

It’s important to view these services as an investment in your business’s financial health and efficiency, rather than just an expense.

Some bookkeepers charge an hourly rate, while others may offer monthly packages. Consider which pricing model aligns best with your business needs and budget.

Understanding the Software and Tools Required

Familiarize yourself with the most common accounting software options, such as QuickBooks Online, Xero, or FreshBooks, to understand their features and pricing. 

In addition to accounting software, your virtual bookkeeper may use other tools for document management, communication, and task tracking. Ensure you have a clear understanding of the software subscriptions and tools required for efficient collaboration with your virtual bookkeeper. 

Setting Clear Objectives and Expectations

Before hiring a virtual bookkeeper, clearly define what you hope to achieve with their services. 

• Are you looking to free up time by outsourcing day-to-day bookkeeping tasks? 
• Do you need help with financial reporting and analysis to guide business decisions? 
• Do you need help with moving money around (like paying contractors and employees)? 

Setting clear objectives will help you communicate your needs effectively and find a bookkeeper who can meet those needs.

It’s also essential to set clear expectations regarding the scope of work, deadlines, communication methods, and reporting frequency. 

Finding the Right Virtual Bookkeeper

Finding the right virtual bookkeeper involves knowing where to look for qualified professionals, evaluating their credentials and experience, and conducting due diligence through background checks and references. 

Sources to Find Virtual Bookkeepers

Virtual bookkeepers can be found through a variety of sources, each offering different advantages. 

• Online job platforms such as Upwork, Freelancer, and Indeed are popular places where you can post your bookkeeping job requirements and receive applications from interested professionals. These platforms often provide ratings and reviews from previous clients, which can give you insight into the bookkeeper’s reliability and quality of work.
• Professional networks and forums, such as LinkedIn. They not only allow you to post job listings but also to reach out to professionals with the specific expertise you need. 
• Ask for recommendations from your professional network or from other business owners in similar industries.

Evaluating Credentials and Experience

When you’ve found potential candidates, the next step is to evaluate their credentials and experience. Look for certifications Quickbooks Proadvisor or Certified Bookkeeper (CB) as these indicate a recognized level of expertise and commitment to the profession. 

Experience is equally important. A bookkeeper with experience in your specific industry will be familiar with the common financial practices and regulations affecting your business. 

Ask about the types of businesses they’ve worked with, the size of these businesses, and the bookkeeping tasks they managed. This will help you gauge whether their experience aligns with your needs.

Asking for References

References from previous clients can provide valuable insights into the bookkeeper’s work ethic, reliability, and the quality of their work. Reach out to these references with specific questions about their experience working with the bookkeeper, how the bookkeeper handled challenges, and whether they met deadlines and communicated effectively.

You can also look for online reviews of the bookkeeper or the firm. Many have Google, Yelp or BBB reviews that help you get a sense of their quality of work and client satisfaction.

Qualities to Look for in a Virtual Bookkeeper

In addition to the technical skills required for bookkeeping, certain qualities make a virtual bookkeeper stand out. These include:

Reliability and self-motivation are top of the list, as remote work demands a high degree of independence. 

Communication skills are also critical, given the need to discuss financial matters clearly and effectively without face-to-face interaction.

Adaptability is another essential quality, as financial processes and software evolve. A candidate who shows a willingness to learn and adapt to new tools or regulations can be a valuable asset to your business.

Cultural fit. While a virtual bookkeeper isn’t going to be interacting with you in person, you should consider if their communication style and approach to business compliments how you like to do business.

By focusing on these areas during the hiring process, you can find a virtual bookkeeper who not only meets your technical requirements but also fits well with the remote nature of the job.

Managing the Relationship

So you’ve found and hired your first virtual bookkeeper, hooray!

Managing your ongoing relationship is your next assignment. A well-managed relationship enhances communication, sets clear expectations, and facilitates the adaptation to changing business needs. 

Establishing Regular Check-ins and Updates

Regular communication is key to a successful partnership with your virtual bookkeeper. Establish a routine for regular check-ins and updates. This could be a weekly, bi-weekly, or monthly scheduled meeting, depending on your business needs and the volume of financial transactions. 

These check-ins provide an opportunity to review financial reports, discuss any discrepancies or concerns, and plan for upcoming financial activities.

Alternatively, a structured email update might suffice for less complex issues. The goal is to maintain open lines of communication, making sure both parties are aligned and informed.

Setting Benchmarks and Reviewing Performance

To gauge the effectiveness of your virtual bookkeeper’s services, set clear benchmarks and performance indicators. 

These could include 

• Accuracy of financial reports
• Timeliness of bookkeeping tasks
• Responsiveness to communication

Periodically review your virtual bookkeeper’s performance against these benchmarks. This could be done quarterly or semi-annually. If the bookkeeper is meeting or exceeding expectations, acknowledge their good work. If there are areas of concern, discuss these constructively and look for solutions. 

Adjusting Scope and Responsibilities as Needed

It’s important to revisit and, if necessary, adjust the scope of work and responsibilities of your virtual bookkeeper. 

Ask yourself or your team if you could use more support that your virtual bookkeeper might be able to provide. Alternatively, make sure you’re not paying for services that you no longer use. 

Scaling Your Bookkeeping Needs

Scaling your bookkeeping needs is a critical step for small business owners as your enterprise grows. This involves 

• recognizing when it’s time to expand your bookkeeping support
• upgrading systems and processes
• possibly transitioning from virtual bookkeeping to an in-house team or an accounting firm 

What do each of these scenarios look like?

When to Expand Your Bookkeeping Support

The first sign that it’s time to expand your bookkeeping support often comes from the feeling of being overwhelmed with financial tasks or realizing that financial insights aren’t as clear or detailed as they should be. 

Additionally, as your business grows to include more complex transactions, such as taking on debt, managing payroll for an increasing number of employees, or navigating new tax obligations, the need for more sophisticated bookkeeping becomes evident.

Upgrading Systems and Processes

Upgrading your bookkeeping systems and processes involves moving beyond basic spreadsheets or entry-level accounting software to more robust systems that can handle increased volume and complexity. 

Look for software that offers integration with your other business systems, such as inventory management and payroll, to streamline operations. Automated features for recurring invoices, expense tracking, and financial reporting can save time and reduce errors. 

Virtual Bookkeeping or In-House Team?

For many small businesses, starting with a virtual bookkeeper is a cost-effective way to manage finances without the overhead of a full-time employee. However, as your business expands, you might run into limitations with this setup. 

You might need an in-house team if your financial processes require deeper knowledge of business operations (such as complicated invoicing procedures). Or you might need daily reports that a fulltime employee is more equipped to handle.

In transitioning, carefully consider the specific needs of your business, the level of support required, and the long-term financial management strategy. 

Conclusion

To recap, hiring a virtual bookkeeper initially offers a cost-effective, flexible solution to manage your finances. 

Setting and regularly reviewing performance metrics with your bookkeeper can help steer your business towards its objectives, making adjustments as necessary based on the financial insights gleaned. 

Moreover, finding a bookkeeper whose skills and work ethos align with your business culture and needs can significantly impact the effectiveness of your small business.

Next, check out our articles on 10 best peo companies in 2024, 13 reasons why accounting is important, and understanding and calculating ebitda.

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