The global accounting sector’s value in 2023 is projected at $675.14 billion. Even though remote accounting is a rather new phenomenon, it is now playing a big role in helping accounting firms and CPAs meet client expectations.
Still, some CPAs and accounting firms hesitate before exploring the world of remote bookkeeping. That’s majorly because they are not aware of what to keep in mind while onboarding a service provider. That’s why we decided to talk about remote bookkeeping services.
In this blog, Finsmart Accounting – one of the most trusted outsourced bookkeeping companies for CPA firms – will share everything about remote bookkeeping services in India. Read on!
Remote Bookkeeping Services: Meaning
Remote bookkeeping is the practice of outsourcing bookkeeping tasks to third-party service providers that work remotely. Going for remote accounting talent helps reduce the cost of hiring and training in-house bookkeepers to handle transactions, financial records, and related tasks.
Now that we have a basic understanding of what remote bookkeeping is, let’s learn how it works.
How Remote Bookkeeping Services Work?
With modern collaboration tools, working with a remote bookkeeper is super easy. The first step definitely is choosing which engagement model you want to work with. Here are the 3 popular ones:
- Visit based
- Dedicated resource
The process begins by identifying and partnering with a remote bookkeeping services provider. While there’s no dearth of engagement frameworks, Finsmart has created one that has stood the test of time and delivers maximum:
DPPT framework creates value for all stakeholders but let’s also look at elements that are part of most remote bookkeeping frameworks out there:
Client information: In this step, the bookkeeping service providers assess the client’s accounting and bookkeeping needs. It includes gathering industry insights, understanding transaction volume, and assigning resources as per support required.
Data sharing: The next step is to share financial documents and data securely. Remote bookkeepers use cloud-based accounting software and secure file-sharing platforms to gain access to critical files.
Setup: After gaining access to the financial data of the client, remote bookkeeping service providers set up the accounting system to meet the client’s requirements.
Data entry: The remote bookkeeper keeps a record of financial transactions such as income, expenses, invoices, and bank statements. It is done categorically to ensure proper financial reporting.
Bank reconciliation: Remote bookkeepers regularly perform bank reconciliation to ensure that the client’s financial data matches bank statements. It helps in finding errors and resolving them quickly.
Accounts payable and receivable: This step includes tracking paying bills and invoices by remote bookkeepers. They can also issue invoices, track payments, and manage collections if required.
Financial reporting: The remote bookkeeping service provider generates financial reports, including income statements, balance sheets, and cash flow statements. It provides clients insight into their financial health.
Tax preparation: If requested by the client, remote bookkeepers assist with tax compliance by preparing and filing taxes. They also keep an eye on tax filing deadlines to avoid penalties.
Regular communication: Regular communication between remote bookkeepers and clients is very crucial. It helps to highlight critical financial matters, address questions, and provide financial insights.
Ongoing support: Remote bookkeepers offer ongoing support and adjustments as the client’s financial needs change. It includes adapting to seasonal variations in business activity and addressing unexpected financial challenges.
Recommended reading: Discover everything about outsourced financial controller services
Data safety: Experienced remote bookkeepers always prioritize data security and privacy of the client. The leading names use encryption and secure data sharing channels to protect sensitive financial information.
Billing and payments: The majority of remote bookkeeping service providers use monthly and weekly billing. The payments are made in accordance with the service agreement.
Now that you have an idea of how remote bookkeeping works, let’s look at what to keep in mind while partnering with remote bookkeepers. Read on to discover what to keep in mind while partnering with remote bookkeepers.
Remote Bookkeeping: What to Keep in Mind
When planning to use remote bookkeeping services, there are several things to keep in mind to ensure a secure and successful financial management process. Below are some key points to keep in mind while partnering with a firm for accounts outsourcing services:
Service provider selection: Always choose an experienced remote bookkeeping service provider. Check online reviews, references, and case studies to learn about their track record.
Data safety: Make sure that the service provider has robust security measures to protect your financial data. It includes data encryption, secure access control, and compliance with data protection regulations.
Clear communication: It is best to maintain clear communication with remote bookkeeping service providers. Establish expectations for communication frequency and ensure they are responsive to your inquiries.
Financial data access: Ensure that you have access to your financial data and accounting software at all times. You should be able to review your financial records and reports anytime. This is what a reputed offshore accounting partner will deliver.
Terms and conditions: Clearly define the responsibilities, scope of work, and terms of the service agreement in a written contract. It should include pricing, payment terms, and termination clauses.
Data backup: It is important to regularly back up your financial data to prevent data loss. Discuss data backup and recovery procedures with remote bookkeepers to ensure data continuity in case of technical issues.
Access permissions: Ensure that access permissions are granted after much scrutiny. Only provide access to essential financial data and functions within your accounting software. No need to share Admin access to everything!
Quality assurance: Regularly review the quality of work delivered by the remote bookkeeping team. Share the errors with remote bookkeepers promptly to maintain financial accuracy.
Remote Bookkeeping Services: Final Words
We hope that the above insights helped you learn everything about remote bookkeeping services for businesses and accounting firms. Remote bookkeeping has gained acceptance in finance circles since it helps businesses and CPAs sail through the troubled times of accountant shortage.
Just make sure that you engage a firm that has ample reviews, case studies, and talent to prove their suitability. Have queries to ask? Drop them in the comments to get a quick reply from our team of accounting and bookkeeping experts.
Also, check out our recently published blogs:
Here’s how to hire certified tax preparer in 2023
2023 strategies to expand accounting business
Don’t forget to check our most-loved services:
India entry consulting services
1. Hiring Certified Tax Preparer in 2023: Useful Tips to Consider
2. FaaS Accounting: Meaning, Difference, Benefits, and More
3. Statutory Compliances in Payroll: How Finsmart Can Help
4. 6 Accounting and Tax Software Widely Used By CPAs in the USA
Shalaka Joshi is the founder of Finsmart Accounting and operates in the capacity of Director. A Chartered Accountant passionate about outsourcing and problem-solving, Shalaka has more than 20 years of experience in the field of accounting, payroll and MIS reports.