Online accounting services are an excellent choice for certain financial management tasks, but sometimes you need an up-close encounter with a real-life CPA.
More and more small businesses are taking their financial management out of the traditional office and into the Cloud. By taking advantage of the many online accounting services available out there, these businesses have done away with the need for an expensive in-house accountant. Virtual or Cloud-based accounting lets skilled accountants deliver key financial services remotely.
In some ways, this transition is part of a more generalized outsourcing trend. Over the past two decades, businesses in every industry have started to outsource key functions that lay outside of their staff’s collective skill set. While larger companies might still need a full-time accounting staff, small businesses all over the country are enjoying the cost-effective benefits offered by virtual accountants.
If you’re like most small businesses, you probably have questions. In order to answer these questions, we’ll start off with an overview of the mysterious entity known as ‘the cloud.’
The Cloud Unveiled
In reality, the cloud isn’t as mysterious as some people seem to think. Not unlike the internet itself, the cloud is a network of remote servers that function as a unified system. These servers let users perform a variety of important computer functions online, also known as cloud computing.
Virtual accounting firms maintain a dedicated network of cloud servers and give users access to the necessary software. Instead of software that’s installed on your hard drive, online accounting services are accessed through Software-as-Service (SaaS) platforms. These platforms do not require any downloading to your personal computer.
This is an incomplete description of the cloud in its entirety, but it’s more than enough to acquaint you with cloud-based accounting.
Online Accounting Services and Traditional Accounting
Virtual accounting companies adhere to the same standards as conventional accountants, but they deliver their services in very different ways. These standards were established by the Financial Accounting Standards Board, an agency that dictates the ways an organization can file its financial reports.
Generally speaking, virtual accountants offer the same services as traditional ones. Both offer payroll services, tax preparation, and financial analyses. Virtual accountants telecommute and work on an as-needed basis, so their services tend to be cheaper than traditional accountants.
Lastly, it’s important to remember the value of a face-to-face experience with your financial professional. We’ll explore the pros and cons of online accounting services in the next section, but the personalized experience of an in-the-flesh CPA is something you should definitely keep in mind.
The Advantages of Cloud-Based Accounting
It’s with very good reason that online accounting services have become so popular with small business owners over the past few years. Though it’s not without its downside, here are some of the benefits you can expect when using a virtual accountant:
Automation of time-consuming routine accounting tasks
Access to real-time financial data from anywhere in the world
Mutual accessibility between virtual accountants and clients
Lower cost for virtual accounting’s ‘as-needed’ services (though this is a subject of debate)
The ability to scale easily during growth periods
Financial data availability across the full spectrum of mobile devices
Minimal investment in equipment and technology (computer and internet connection)
24-hour access to financial information
These advantages make online accounting services very appealing to many small businesses. As a small business owner, it’s certainly in your best interest to consider using a virtual accountant for a significant portion of your accounting needs.
The Disadvantages of Cloud-Based Accounting
In order to make the best decision, you’ll need to know the downside of cloud-based accounting as well. These disadvantages certainly don’t negate the value of virtual accounting, but they do merit consideration:
Availability of online accounting services is completely dependent on an internet connection.
Some experts have security concerns about sharing financial data with third parties online.
Virtual accountants use varying types of software, some of which may not have the functionality your business needs. This situation is often made worse by the difficulties inherent to changing from one virtual provider to another.
Choosing between online accounting services and a traditional accountant is a tough decision. That’s one of the reasons you deserve to have all of the information at your disposal. However, it’s your responsibility to research this important decision further. Add the knowledge you gain to whatever intuitions you might have, and you’re certain to do what’s best for your business.
About Lena Georgiev Consulting Services
Lena Georgiev provides accounting, bookkeeping and tax solutions that fit the needs of small businesses and individuals. Lena also has project management as well as life coaching skills which help clients with organization and real life advise. Call now for a free estimate on services!
Email: [email protected]
Phone Number: 847-420-8242
License Title: Registered Certified Accountant in the state of Illinois
License ID: 239.002263