Accounting outsourcing has been a trending shift toward the new-aged business model. However, old-school business owners working with virtual assistants still need to adapt. The virtual accountants and bookkeepers are wise and trusted recourses to work around while maintaining the overall operational cost. However, a significant concern for most business owners looking to outsource their activities is a central question around the expenditure involved while hiring a virtual accounting assistant.
To know the core and crux of hiring a virtual accountant, Let’s narrow down the factors revolving around the tasks handled by an accountant and compensation for the due service. The cost involved in getting the task done involves two characteristics of the cost; resource cost and software cost required for the job.
What will a Virtual Accountant handle?
Accountants’ key responsibilities differ from bookkeepers” in the finance and accounting unit. For example, while a bookkeeper manages your daily transactions and numbers, an accountant helps you make an informed business decision. Irrespective of the business size, a small business or any certified public accountant firm, an accountant maintains your financial data, prepares all the business-related taxes, and releases financial records.
An outsourced virtual accountant provides services to businesses and companies from an offshore setup as they work remotely. The virtual working model allows them access to the tools and software required to complete the assigned task. Most companies across the globe hire virtual accountants who are either independent contractors, skilled freelancers, or experts from accounting outsourcing companies with hands-on experience.
Factors determining the Cost of a Virtual Accounting
While working on a small scale and with mid-size businesses, keeping the costs down is always paramount. So is for the managers and company owners to independently look at the nitty-gritty of all operational, administrative, and financial work.
This working model may blow back in the case of accounting and bookkeeping tasks. Such jobs require time and attention to person efficiently. So, outsourcing the task to a virtual accountant is always a wise and intelligent decision. Nevertheless, more factors should be considered before accepting an offer in return for the job. To understand better, a virtual accountant’s cost primarily depends on various core factors like:
- The type of work virtual accountants can do
- The expertise and certification of an accountant
- The geographic location of the service provider
- The scope of delegated work and expected duration of the project.
With great work comes reasonable compensation; while hiring a virtual assistant from an outsourcing service provider, scooping through the payment structure is standard with its regulated format.
Depending on the scope of the work and duration of the entitled task, the contract needs to be apparent based on the virtual accountant’s preference to be billed hourly and receive online payments for their services. However, some virtual accountants choose to work on a retainer and accept checks and credit card payments. The working potential of a virtual assistant defines payment structure.
Here’s a quick sneak peek into virtual accounting service providers flexible yet dependable payable structure:
- Hourly payments – With the model of hourly fees, every hour spent working is billable for the virtual accountant. Here, you pay the hired virtual accounting assistant for each billable hour they worked towards the project.
- Project-based – This part of the payment is task-dependent. The charges are settled depending on the scope of work or the project.
- Flat rate – This is more of an FTE concept. This is near the fixed salary settled for the number of hours spent working on the project weekly or monthly.
The next thing is the release of the remuneration against the service availed for the project. The significant benefit of hiring a virtual accountant is the fact they are location dependent. With not being location specific, there will be a larger talent pool to choose from worldwide. The payment should be through trusted and dependable portals like PayPal, Payoneer, or wire transfer.
Benefits of Hiring a Virtual Accountant
An accountant helps you extensively manage your finance and accounting tasks. They will ensure your work depends on maximizing tax deductions and making informed financial decisions.
- Eliminate the cost of staff management: Hiring in-house staff, training, work management, and required resources are added costs to the budget. In such scenarios, staffing costs include salary, health benefits, leaves, and infrastructural setup. The investment is justified by overloaded work. However, these added expenses can be a liability when the workload is not bushing around in the off-season. Thus, virtual accountants are at the rescue. When you hire an external accountant to work for you virtually, they are competent enough to perform cash flow management and inventory check tasks.
- Technology and Infrastructure Support: With technical intervention, the classic paperwork is long gone. The access to information and availability of user-friendly software makes it easy to kick-start your books and records. Investing in systems and software can be expensive, and maintaining records on the accounting software as the business grows. However, with the virtual accountant in the role, you’ll have access to cutting-edge accounting software expertise at no additional cost.
- Avoid costly mistakes: Hiring a virtual accountant means your business is less prone to financial adversities. In addition, these experienced accountants stay updated with financial regulations and taxation rules, so they correctly categorize expenses, handle payroll and track deductible business expenses.
- Data Security: With experienced, teach-savvy accountants on the team, they will have the business up to date and comply with data protection standards while maintaining confidentiality. To begin with, you can either seek a virtual accountant who has mastered the certification of Cybersecurity Maturity Model Certification or partner with an accounting services provider that specializes in adhering to information security. They are well-equipped to implement the right cybersecurity systems and software and ensure your company’s financial records, customer data, legal records, and other sensitive business information stays safe.
Factors contributing to estimating the cost of hiring a virtual accountant and availing the virtual accounting services don’t have to be complicated. The initial step is to identify the scope of work and, once done, look at the service offered and the expertise of the virtual accountant. The next step, after having clarity on the scope of work and the accountant you desire to hire the cost is to estimate. Then, of course, you believe that after reading this, there will be no trouble determining the remuneration paid against their services!
Author Bio: Stacey Howard is a passionate blogger having 6 years of experience in accounting & bookkeeping. She has been working as an accountant in a renowned outsourced accounting firm Cogneesol. Due to her passion, she has contributed significantly through her write-ups by sharing an informative article about multiple accounting industries.