Going from traditional to online bookkeeping has recently become an easy process for small businesses since online bookkeeping services have emerged. They are a virtual team of both bookkeepers and accountants that allow you to send your books to them so they provide monthly, quarterly or annual bookkeeping, accounting and payroll services remotely rather than on-site.
How Does It Work?
Usually you will be given simple to use online accounting software for you to record transactions. Many online bookkeeping services are using Xero accounting software for its simple language accounting knowledge to use it. Along with this, you have an option of bookkeeping services. When you send invoices, bank and credit card statements electronically or via post, a bookkeeper will enter your purchase invoices into the system, track and analyse aged creditors and aged debtors from the invoices you may have raised. Your bank and credit card statements will be reconciled.
The Benefits to The Small Business Owner
Business owners need real-time accurate accounting information to manage their business. Below are the benefits to businesses that have their bookkeeping outsourced:
* Online accounting software saves storage costs and space that desktop software would use for backups. All your data is backed up offsite.
* You need less office space to store your paper documents for the next six years. HMRC accept electronic files. So you can upload pdf invoices to a dropbox account. Also, you can keep original files, if you want to, and just scan them and send them to the bookkeeping team.
* It cuts the cost on employment benefits to in-house bookkeeping staff.
* It reduces, or completely frees up your own time if you were previously working on the accounts.
This will depend on the size of your business and needs. Particularly consider whether you currently do the bookkeeping or if you have staff to do it. Services offered start from providing only the bookkeeping software so you, or your staff members, can do the bookkeeping. Support is giving by the provider where they can rectify any outstanding issues. Another service is where you get the online bookkeeping service team to do your all of your bookkeeping for you. And you only use the software for raising invoices and accessing the information they update for you. Or you can combine their services with your own bookkeeping efforts by agreeing, beforehand, to what tasks you or your staff will do and what tasks the virtual team will do.
Pricing varies from company to company but, in general, the more complex your business is the more bookkeeping and accounting tasks you will need and so expect to pay more. For example a sole trader with no employees will only need invoices and bank reconciliation every quarter whereas a business with employees may need prepayments and accruals, depreciation and payroll done on a monthly basis.
Outsourcing business bookkeeping can be indispensable since online bookkeeping services can either replace your bookkeepers and accountants or supplement your in-house staff members. Online bookkeeping services offer you a trial. Use this to assess what works best for you before you buy.