What is Online Bookkeeping and how can it benefit your Business?
Online bookkeeping is the action of using an online bookkeeper and online bookkeeping systems to manage the day-to-day financial tasks of your business.
- What is Online Bookkeeping?
- Is Online Bookkeeping right for your business?
- What are the Benefits of Online Bookkeeping?
- Potential downfalls of Online Bookkeeping
1. What is Online Bookkeeping?
Online Bookkeeping simply put, is the action of using an online bookkeeper using online bookkeeping systems to manage the day-to-day financial tasks of your business. Certain tasks such as recording transactions, completing payroll or processing invoices to partners can all be completed using online bookkeeping services.
Considering the ever increasing influence of the internet matched with the forced education in online services many have had through the recent pandemic, services such as online bookkeeping are not only becoming more prevalent but easier to access for many who would not have thought to use such a service in the past.
2. Is Online Bookkeeping right for your business?
The use of online bookkeeping will of course need you to take the first step of deciding whether you want to outsource a part of your business which, especially in terms of your finances can be a daunting proposition. If outsourcing is something you haven’t done before then there are certain elements to think about first - trust, quality and cost are among the most important. Hopefully, the information presented in this article will help you to make the right decision for you and your business.
When it comes to bookkeeping in general, many small or young business owners tend to take on the responsibilities themselves. This mainly stems from the fact that initially, the task might not seem large enough to justify the cost. But with many things in business, not only will the task eventually become greater than your own skills, but also keep you from putting effort in areas where you are more effective.
This is why it is advisable to look at a different avenue for your bookkeeping as your business begins to grow. Taking the route of online bookkeeping can be a cost-effective and time-saving way to help you and your business stay financially organised.
3. What are the Benefits of Online Bookkeeping?
Here we will highlight more specifically the benefits your business can receive from online bookkeeping.
How much does online bookkeeping cost?
The use of online bookkeeping can allow you to streamline your bookkeeping whilst also taking on someone with a much higher level of knowledge than if you were to hire someone directly into your company. Not only do you save on all the costs of having another full time salary on your books, but with the vast range of options available these days, you can find an expert in your field that maybe you would not be able to find locally.
As mentioned, the world of online bookkeeping holds many options for you, not only in knowledge but in price as well. You also have a wide variety of options when it comes to the services on offer. Some firms or individuals offer hourly or monthly price points in an attempt to adhere to all types of business. Considering the huge amount of information available online, you will be able to find a package that will suit your business.
There will always be cases where ‘you get what you pay for’ will apply, but online bookkeeping is a competitive market where hourly rates can vary between €15 - €50 an hour or €190 - €300 per month depending on where you look. Consider also that many firms can offer bespoke packages which may incur a small extra cost but takes into account everything you need.
Skill and Quality
Regardless of how confident you may be with numbers, bookkeeping itself is a skill, one in which practitioners are educated separately to normal business education. As such it is always better to look towards an experienced professional to take control in important areas of your business. But this also carries issues such as cost and quality available. One of the main advantages of online bookkeeping is the access to a much larger pool of professionals. Whether you are having trouble finding the right person locally or maybe they are just too expensive, the internet and choices presented with online bookkeeping allows you to truly find the expert knowledge that will benefit your business.
These days the advancements in online bookkeeping are not just in outreach, but also in the technology available. As a business owner, you can’t be expected to be up to date on every bit of tech or software but an expert in the field will be. It would be crucial, mandatory even, for any online bookkeeper to be updated and to use an online bookkeeping system that could massively help your business to streamline its processes and financial recording. Many of these services will be included in the price of an online bookkeeper. Just so you have an idea, have a look at our article on Accounting Software.
As already mentioned above, taking on bookkeeping tasks as a business owner can not only lead to overworking on tasks that are not your expertise, taking you away from aspects of your business where you are stronger but also can lead to you affecting the efficiency of your processes through not having the required knowledge or time to complete the tasks in a timely manner. Engaging in online bookkeeping can allow your business to run at a better pace with your finances being properly cared for. Along with the basic recording of expenditure, the use of bookkeeping software and an expert can allow for important matters such as invoices being paid in a consistent and timely manner. This not only saves you time and possibly incurring late fees, but will maintain your credibility and reputation with partners and suppliers.
Another key point of efficiency is the manner in which the service is provided. With competition available in the online bookkeeping marketplace, firms or individuals are working to keep you as a partner. This can lead to greater focus on the service provided and ensure on time and accurate reporting to you in order to keep you as a happy client. This is their prerogative much as your clients are yours.
Planning and Forecasting
Whilst a major function of bookkeeping is to record your financial transactions, another huge benefit of online bookkeeping is the data available to you from the online systems. This data can easily be analysed by yourself or with the assistance of the bookkeeper you work with to plan for the future with more information available.
Focusing on what matters most
Among all the benefits of using online bookkeeping, one which is arguably the most beneficial is how it frees you up to concentrate on what matters most, which in most cases for small business owners is their customers. Most business owners did not start their business with aspirations of taking care of the company's books. Most business owners spotted an opportunity and if successful have managed to provide a good product or service, which is where their strengths usually lie. In the end, without customers, you have any need for bookkeeping as there will be nothing to fill the books with!
4. Potential downfalls of Online Bookkeeping
Although this article has so far focused on the positives of online bookkeeping, the potential negatives must always be assessed to make an informed decision regarding your business.
Probably one of the most concerning of all the potential downfalls. Your financial recording and documents are in some ways the most important to your business. Depending on your business the information contained on your financial documents can be wide-ranging and obviously confidential. Taking the step to trust an outsourced company can bring on elements of fear and you must ensure that you conduct proper research. Have a read of our article on Outsourced Bookkeeping which can fully explain how you can benefit from this development.
Especially if you are a very hands-on business owner, the lack of having the person in the same building can lead to a slow down in some instances of communication. But in most cases, especially with more and more people working from home during and after COVID times, many employers and employees are getting used to not being in the same building and becoming more communicative by email and phone.
Although this may seem like a minimal concern, it is the reason many businesses keep paper or downloaded records even if using online bookkeeping services. Who knows what kind of emergency or opportunity will arise where your financials are needed and if you or your provider happen to have the simple issue of connection issues then this could lead to a frustrating scenario.
All business owners want the best for their businesses and to improve wherever they can. The use of online bookkeeping, whilst having potential downfalls is an area where any small or growing business owner should look into. As with any service, once you have made the decision to actually use said service. The next step is usually the most important and the most difficult - How do I make the right choice? Where do I find them?
Luckily for today’s business owners, as the market for online bookkeeping has grown, so have the tools to find the right one for your business. The platform Welink Accountants will help you to easily find the right fit for you by filtering out what you don't need in just a few simple clicks. The service is free and will put you in direct contact with an expert who will be able to help you.