You may hesitate to hire a bookkeeping virtual assistant. You know that bookkeeping is a task that every business needs to perform. But is it worth outsourcing?
Our friends over at EcomBalance can tell you that there are a lot of things to keep track of when it comes to financial management. Some folks like the idea of doing their own bookkeeping. However, the need for a bookkeeping virtual assistant becomes apparent when scaling a business or when tax season rolls around! With a business to run, most people don’t have hours every week to devote to accurate bookkeeping.
In this article, we’re going to dive into some of the essential bookkeeping tasks that you can outsource to a VA.
1. Accounts Payable Management
Accounts payable management involves tracking money that your company owes to other entities, such as suppliers, vendors, employees, landlords, utility companies, etc. This type of account is full of purchases made on credit and that are not paid for immediately. As such, these debts are listed as liabilities that need to be paid based on set payment terms.
A bookkeeping virtual assistant keeps track of all these bills and the due dates of when they need to be paid. They can also handle the task of paying these creditors.
2. Accounts Receivable Management
On the other hand, accounts receivable management is all about collecting money owed to your business by another entity. It entails tracking and collecting payments or purchases made on credit by customers or clients for the use of a good or service. Because this money is something you expect to receive, it is recorded in your asset account.
AR management consists of tasks such as sending payment reminders, recording interest rates, monitoring accounts receivable turnover rates, and tracing any cash owed to you.
3. Bank Reconciliation
Reconciliation is the process of ensuring the revenue and expenses registered on your balance sheet in your general ledger match your bank statements. Your VA will evaluate both records and check to see if there are any inconsistencies or discrepancies. Reconciling frequently is the key to preventing errors that can affect your financials in the long run. These errors include duplicate entries or failure to record a transaction.
4. Expense Tracking
Expense tracking management is essential if you want to keep your spending in check. This process involves keeping a detailed record of all your expenditures. This can include salaries, utilities and rent, product development costs, and equipment costs. This can be done on a daily, weekly, and monthly basis. Expense tracking is important because it tells you what you are spending and shows you if there is any wasteful expense.
More than the aforementioned, tasks that can help with expense management include:
- Opening a separate business account
- Using accounting software
- Connecting your banks to that software
5. Payroll Processing
Virtual assistant bookkeeping also involves ensuring that your workers are paid, and the proper payroll taxes are filed. First, your VA can set up a payroll schedule (weekly, biweekly, monthly, bimonthly, etc.) if you don’t have one already. They can then calculate net and gross wages, process deductions, and report, file, and pay payroll taxes. Most accounting software offers payroll services to make this process easier.
Note: Make sure your workers fill out the appropriate forms (W-4 or W-9) before conducting payroll. Your bookkeeper can work with your hiring team on this as well.
6. Financial Reporting
Bookkeeping is not complete without financial reporting. These reports contain essential financial data that is crucial to making future business decisions. Important metrics to track include your profit margins, working capital, ratios, turnovers, and returns. There are excellent financial reporting tools built into bookkeeping software. These allow you to view metrics in real-time and easily convert them into report formats whenever you need them.
7. Tax Preparation
Tax season is that time of the year that not everyone looks forward to, to put it lightly. While there are several benefits to DIY bookkeeping, hiring a professional for their working knowledge of tax law and regulation might be worth it. They can prepare all the requirements for tax time. Your VA can help ensure that the whole bookkeeping process is done “by the book” so you or your accountant won’t run into any issues when filing.
8. Budgeting and Forecasting
Budgeting is all about knowing how much capital you have on hand to spend on maintaining business operations and reaching business goals. Naturally, budgeting is a practice that pairs handsomely with expense tracking.
The value of hiring a bookkeeping virtual assistant is that they can watch your numbers more closely. They can provide valuable insight into spending behaviors and tell you if there are areas where you can make wiser budgeting decisions. Not only that, but they can also use previous budgets, spending data, and revenue data to help you make future budgeting and business decisions towards future business growth.
9. General Ledger Maintenance
Maintaining a general ledger is the primary task of any virtual bookkeeping assistant. A general ledger contains all the accounting records and transactions of a company. The accounts you would typically find are expense, revenue, assets, liability, and equity.
Tasks associated with ledger maintenance include creating and adjusting journal entries, arranging trial balances, account summations, and preparing financial statements.
10. Financial Analysis
If bookkeeping is incomplete without financial reporting, financial reporting is incomplete without in-depth financial analysis. Numbers are just numbers if you don’t have an interpreter. Your virtual bookkeeping assistant can examine your monthly financial statements and provide actionable insights based on the data gathered.
- Assess the current financial health of your company
- Spot patterns in your spending habits
- Identify opportunities to save money or make a profit
- Use their knowledge of economic trends to help you make better business moves.
11. Data Entry
This is a basic task that is almost a given for bookkeeping virtual assistants. They, of course, input all the data into your general ledger and the accounts therein. However, they also can do other tasks like:
- Digitizing financial statements, transactions, or receipts.
- Creating spreadsheets
- Transferring information between applications
- Updating business information
- Transferring metrics and data into reporting applications
12. Inventory Management
Inventory management involves determining the cost and value of your inventory. This applies to businesses that deal with physical goods and stock. It’s important to know what stock sells well, what doesn’t, and when you need to restock. See, inventory has intrinsic value but loses that value over time if it expires, prices go down, or storage fees rise. You don’t want dead stock draining resources.
A bookkeeping virtual assistant can help you track inventory stock levels and make sure real stock levels match your sales. They can monitor what is popular and use inventory management software to create purchase orders quickly and easily.
13. Cash Flow Management
Cash flow management involves the tracking of all funds moving on or going out of a business. A cash flow manager tracks expenses and profits, creates budgets, forecasts, and generally ensures that the value of your funds is maximized. This means keeping detailed records of inventory, cash, debts, and profit.
14. Audit Support
Companies conduct internal audits to gauge how well their financial management is shaping up. An auditor can check if your books meet the GAAP, or generally accepted accounting principles. It’s also a way to check the performance of your current bookkeeper and ensure there is no funny business going on.
15. Software Assistance
Accounting and bookkeeping software like QuickBooks and FreshBooks has made financial management so much more optimized and streamlined. At this point,any bookkeeper that doesn’t use this type of software is giving themselves an unnecessarily difficult time.
You can hire a QuickBooks VA who specializes in the QuickBooks software. They can help you get your account set up, migrate your financial data, and conduct account management directly from the software dashboard.
16. Organization and Documentation
The necessary traits one must possess to be a bookkeeping virtual assistant are to be detail-oriented and organized. Your VA will make sure that all your receipts and transactions are where they need to be and are properly categorized. Not only that, but they can also keep records of previous financial reports, analyses, budgets, and other historic data. Feel secure knowing that the data and documents you need are always at your fingertips. Tax preparation doesn’t begin at tax season, it begins with well-kept records that are easily accessible.
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Proper bookkeeping practices are no joke. While this list may cover the essential bookkeeping duties, there are even more tasks out there depending on the specific needs of your business. This is why we recommend hiring a bookkeeping virtual assistant to handle that branch of your business.
Professional bookkeepers are proficient with numbers and have processes in place to help them detect errors quickly and correct them. They combine this with their technical knowledge of useful financial management tools.
Evaluate what’s best for your financial health. Consider hiring a VA so you can direct your attention toward business areas that require your time, effort, focus, and expertise.