What Is a Virtual Bookkeeper? Everything Small Businesses Need to Know  

Last month, our neighbor hired someone to train her dog over Zoom. The process goes like this: She props her laptop on the floor, and the trainer gives commands through the screen while the dog listens.   

This is not an SNL act; it’s a real thing happening, folks.   

Now close your eyes and think, if you can train your dogs, can you manage your business books by hiring someone remotely?   

That’s what virtual bookkeeping is all about.   

In this guide, we’ll break down what a virtual bookkeeper is, how it works, and why it might be your best business decision this year.  

What is a Virtual Bookkeeper?  

Think of virtual bookkeeping as having someone handle your books from a distance. Instead of being in your office, they work online, keeping your financial records organized and up to date.   

Their tasks include tracking income and expenses and preparing financial reports like profit and loss statements, balance sheets, and cash flow summaries.  

You can either hire someone in-house to do this remotely or outsource it to a freelance bookkeeper or a bookkeeping firm. In both cases, they’re not physically present, but they still get the job done using cloud-based tools like QuickBooks.  

For example, let’s say you run a small construction business. You don’t have time to sit down and filter through receipts or track invoices.   

So, you hire a virtual bookkeeper who logs into your accounting software a few times a week, categorizes your expenses, tracks who owes you money, and sends over simple reports.   

How Does Virtual Bookkeeping Work?   

Back in the day, small business owners would gather all their receipts and invoices into a shoebox and hand-deliver them to their bookkeeper once a month. That bookkeeper would then spend hours manually entering everything into spreadsheets.   

Thankfully, we’ve moved on from that.  

With virtual bookkeeping, everything happens online. A virtual bookkeeper log in remotely organizes your transactions and keeps your books in order.   

You upload receipts and connect your bank accounts; they take care of the rest without stepping into your office.   

What Services Does a Virtual Bookkeeper Offer?  

As we mentioned above, a virtual bookkeeper keeps your business finances organized and running smoothly. Let’s see in detail what services they offer:   

1. Financial Reporting  

This is one of the main reasons people hire a bookkeeper. They’ll prepare your income statement, balance sheet, and cash flow reports so you always know how your business is doing financially.   

2. Cleanup  

If you are falling behind on your books, that’s not a problem, as virtual bookkeepers can go back, review past months, reconcile transactions, and clean up any mess so your records are accurate and up to date. They’ll also take care of any unpaid bills still sitting in your inbox.  

3. Managing Financial Records  

On a day-to-day basis, virtual bookkeepers track and record your business income and expenses. They also monitor accounts payable (what you owe) and accounts receivable (what you owe). It’s the bread and butter of basic bookkeeping.  

4. Payroll Processing  

Payroll can be time-consuming and stressful. A virtual bookkeeper can handle it for you. They can calculate employee wages and deductions to make payments, manage direct deposits, and file payroll taxes.  

5. Tax Preparation and Compliance  

When tax season hits, you’ll be glad you have help. A virtual bookkeeper gets your records organized, preps your sales tax returns, and works with your tax accountant to make sure everything is compliant for filing.  

6. Budgeting and Financial Planning  

As virtual Bookkeepers already have a handle on your financial data, they are in a great position to help with budgeting and planning. They can identify trends, forecast future cash flow, and even suggest ways to cut costs and save more.  

7. Software Setup and Integration  

If you’re not using tools like QuickBooks or Xero, your virtual bookkeeper can help set everything up. They’ll also connect tools like payment processors and bank feeds to automate your financial systems.   

8. Advisory and Support  

Beyond the numbers, virtual bookkeepers can offer insights to help you grow. Whether through a quick virtual meeting or ongoing advice, they’ll guide you on best practices and support you in making smarter financial decisions.  

Benefits of Virtual Bookkeeping  

Now that you know what virtual bookkeepers do let’s see what benefits they bring to small businesses.   

1. Lower Overhead Costs  

With a virtual bookkeeper, there’s no need to pay for extra office space, furniture, or supplies. Since everything is done online, you cut overhead and can redirect those savings to more important parts of your business, such as marketing, hiring, or growth.  

2. Flexible Hiring  

You don’t have to commit to a full-time employee if you don’t need one. Virtual bookkeepers can work part-time, seasonally, or during busy periods like tax season or year-end. This lets you get expert help only when needed, saving time and money.  

3. Scalable Support  

As your business grows, your bookkeeping needs might change. Virtual bookkeeping services are easy to scale. You can add more hours or services without going through lengthy hiring processes.  

4. Access to Specialized Skills  

Many virtual bookkeepers have experience across industries and tools. That means you get someone who already knows your type of business, the right software, and how to spot red flags in your finances.  

5. More Time Back  

When you’re not drowning in receipts or spreadsheets, you have more time to focus on running your business. Virtual bookkeepers take these tasks off your plate so you can stay focused on what matters most: growth, clients, and strategy.   

What to Look for in a Virtual Bookkeeper?  

All these virtual bookkeeping benefits have pumped you up, and now you want to hire them. However, hiring a virtual bookkeeper isn’t just about finding someone who can crunch numbers. You want someone reliable, experienced, and a good fit for your business. Here’s what to keep in mind:  

1. Online Presence and Professionalism  

• Start by checking how they show up online.   
• Do they have a website, LinkedIn profile, or business page?   
• Are they active on professional platforms?   

A strong online presence often signals that they take their work seriously and allows you to review their background and credibility.  

2. Industry Experience  

It’s a big plus if the bookkeeper has worked with businesses like yours. Every industry has specific expenses, tax rules, and financial patterns.

A bookkeeper already familiar with your world will be quicker to get started and less likely to make mistakes. They’ll also know where to spot savings, which can benefit your bottom line.  

3. Software Skills  

Make sure they’re comfortable with the accounting tools you use—or plan to use. Whether it’s QuickBooks, Xero, or something industry-specific, having a bookkeeper who already knows the software will save you training time and reduce the chance of errors.  

4. Flexibility and Communication  

Since you won’t be working side by side, clear communication is key. Look for someone who responds promptly, explains things in simple terms, and is open to adjusting their hours or workflow to match your needs.  

5. Reviews and Reputation  

Don’t skip the reviews. While they’re not the whole picture, they can give you valuable insight. Pay attention to patterns. Take note if several clients praise their reliability or flag the same red flags. A few old negative reviews aren’t a big deal, but recent or repeated complaints might be.    

Final Thoughts  

Now that you have a clear idea of a virtual bookkeeper, here’s the biggest takeaway: you’re no longer limited by location. You can find the right person for the job, someone who truly understands your business and fits your budget. That kind of flexibility means better service, less stress, and more confidence in your finances.  

Speaking of finances, for over a decade, we’ve been helping small business owners like you ditch the overwhelmed and take control of their finances.     

Let’s get your bookkeeping system working for you!     

P.S. If you are reading this, it means you can have access to our free consultation for your business. Avail this for free today before we change our mind 😉

FAQs  

What’s the difference between virtual and fractional bookkeeping?  

Virtual bookkeeping is done remotely, while fractional bookkeeping refers to hiring someone part-time or as needed.   

Should a small business use a virtual bookkeeper all year round?  

Yes, if you want consistent, up-to-date financials and fewer headaches at tax time. But you can scale services based on your needs.  

What are virtual bookkeeping hourly rates?  

Virtual bookkeeping rates typically range from $25 to $75 per hour, depending on experience, location, and services offered.