1.1 A New Approach to Financial Recordkeeping
Startups are all about innovation, adaptability, and making the most of resources. While product development and marketing may get the headlines, and investor relations are undoubtedly crucial, smart fiscal management is just as important if not more. In the past, many startup founders performed functions related to managing finances or hired an internal bookkeeper, but many startups today are utilizing virtual bookkeepers to scale more efficiently. This is not only about reducing costs; creating a flexible, modern financial backbone to support growth was worth looking into as well.
2.1 The New Normal for Bookkeeping
Remote bookkeeping Service is the process of outsourcing the financial recordkeeping function of a startup to professional(s), who work remotely from a physical location. The virtual bookkeeper can be located next door or on another continent. The recordkeeping function involves bookkeeping tasks such as creating reports, ensuring compliance, and keeping records while performing an agreed-upon number of bookkeeping hours, which do not need to be performed at a physical location. A virtual bookkeeper can use technology to collaborate with founders, finance teams, and investors, while providing decision-making information needed to support real-time business.
3.1 Cost Efficient & Flexible
Startups are all about utilizing every dollar they can find. Hiring a full-time internal bookkeeper or accountant requires paying salaries and benefits in addition to costs related to office space, supplies, and equipment. Contracting a virtual bookkeeper, working with an agreed number of hours on a flexible, contract, or hourly basis, saves money. Startups only have to pay-as-you-par. Every dollar saved on bookkeeping can be spent on growth related activities- product development, marketing, and sales!
Finding skilled virtual bookkeepers has never been easier. Online marketplaces like Upwork and Fiverr are platforms that have birthed a new marketplace economy. Connections to Global Accounting Talent
These platforms provide direct connections to startups and have labor-from anywhere professionals who reside all over the globe. Take professionals in countries like Pakistan and the Philippines. Both countries have a reputable education system for accounting and can usually provide hourly rates that are below what you would get domestically. Typically, one would find personnel that have internationally credible designations such as ACCA (UK) or Chartered Accountant representatives who always make them highly regarded members of your startup accounting team.
4.1 Access to Global Accounting Talent
One of the biggest advantages of remote bookkeeping is that it gives any company access to worldwide labor. Accountants who sit in countries such as Pakistan or the Philippines, while they may only work in similar time zone business hours as Canada or the USA, typically have abundant experience collaborating with international clientele and understanding a multitude of different business models. The accountants will complete the day-to-day bookkeeping, prepare financial statements, deal with tax compliance, and are even skilled enough to assist in the more complex tasks such as consolidating financial statements and creating financial models. Utilizing overseas talent is inevitable and being able to access that skill and experience without the required annual salaries is an advantage that can allow a startup to focus its funding on longer terms objectives instead of its monthly long-term prospects with their finances.
5.1 From Desktop to the Cloud – A New Accounting Environment
With the accounting profession changing quickly because of technological advancement it really has changed over the years. One of the major changes being that bookkeeping and accounting heavily relied on traditional desktop software that required the pressure of not only backing up every receipt or document but backing up every day through their own computer systems as they could only account or access the systems at the office. Obviously, today’s modern technologyallowed a startup to utilize the many cloud-based accounting platforms to account for revenues and expenses to run a company’s business and life, including QuickBooks Online, Xero, and Wave. The advantage with cloud accounting is that it is secure and accessible anywhere globally,so it is now so much easier to collaborate and communicate with your virtual bookkeepers, and at the same time be able to pull your financials to host meetings with team members virtually. Real-time financial visibility
Cloud based bookkeeping services give Startup founders access to their financial information in real-time, allowing them to make timely decisions based on fact. No longer are startups waiting until month-end reports tell them what their cash balances are, what invoices they have paid, or their profitability. Now it can all be obtained at anytime from anywhere. Your virtual bookkeeper of choice, as an example, could provide you with custom dashboards and your agreed management reports showing you the lessons learned to recognize trends that you can follow up on.
6.1 Accuracy and compliance
If a startup is generating investment or is planning to take on additional headwinds they most certainly have a business imperative to ensure cause and compliance accuracy. The tools and professional expertise utilized by virtual bookkeepers can provide reliability and compliance to demystifying human error and ensuring you comply with tax law and GAAP. Many virtual accountants will have complete experience in the multi-currency business transactions, implications for international tax issues, etc., even if your startup was only conceived in a specific market, it will have global implications. Having a dedication to your financial partner reduces the risks of incurring errors and allows you to build investor trust and confidence.
7.1 Establishing a strong financial foundation
In summary, the cloud-based bookkeeping applications are not about accurately transacting money, they establish a solid financial foundation towards a sustainable growth model for the business. The timely feedback and updates provide satisfactory evidence for start-up Founders to strategically plan for both expansion and funding activity. A good virtual accountant is more than a bookkeeper, they collaborate with you, and for you, as you navigate through the startup process providing you with historical data to recognize trends – and to supportive you along the way.
8.1 Final Thoughts
The reason start-ups are using virtual accountants is because it is a smarter method of scaling the startup. Virtual bookkeeping routes offer scalability according to the talent pool globally, as an example landlord from Pakistan or the Philippines; being able to cash in on cloud-based solutions like QuickBooks Online, Xero, Wave, etc.; and lastly collaborating with freelancers through Upwork, Fiverr, etc.. Implement a financial backbone that will be able to scale. With our digital networks it is not only an alternative option, but it can be your smart, fast access to scale your business with reassurance.