Running a business is exciting but many things come with that like managing the books, that’s where many business owners start to feel stressed. Balancing invoices, tracking expenses, reconciling bank accounts, and preparing reports eat up valuable time of business owners if it is done by own.
That’s why many small businesses today rely on virtual bookkeepers which are professionals who manage your finances remotely using secure, cloud-based software like QuickBooks, Xero, or Zoho Books.
You might be curious about what a virtual bookkeeper really does with your accounts. So, let’s go through the work process of a virtual bookkeeper step by step, in plain and simple terms.
Step 1: - Understanding The Business (Onboarding Stage)
Everything starts with understanding the business.
The first step is understanding about business and their need, A virtual bookkeeper doesn’t just jump into your books right away. They first spend time learning how your business works like what you sell, how you received payment, and where your expenses go, what assets you have, what is your inventory etc.
During this stage, the virtual bookkeeper:
- Talk to you about your business goals, work flow of business and main pain points of your business.
- The bookkeeper Ask you for access to your accounting software, bank accounts (read-only), and payment platforms like PayPal or Stripe.
- The bookkeeper Collect necessary documents like past records, invoices, bills, and receipts.
- The bookkeeper review or create your Chart of Accounts which is like the backbone of the bookkeeping system.
The goal of understanding the business is to set up a clean and organized system that fits your business perfectly.
Step 2: Setting Up the Accounting System
Once the virtual bookkeeper understands your business, they set up or organizes your accounting software.
This includes:
- Connecting your bank feeds and credit cards to your software so that all your transactions through bank account and credit card automatically appear in your bookkeeping system.
- Adding your clients, vendors, and products to in your system.
- Setting up automation rules to save time (for example, every Amazon charge automatically goes to “Office Supplies”).
- Uploading old data, if needed, so your books start fresh and complete.
The goal of setting up the accounting system is to Build a reliable foundation where every financial detail flows automatically.
Step 3: Recording Daily Transactions
Recording transaction is the heart of bookkeeping, It keeps track of every money movement in the business.
The virtual bookkeeper does this daily, weekly or Monthly depending on your business volume.
The Virtual bookkeeper record:
- Sales – every sales transaction which is happened during the specific period.
- Expenses – every bill, subscription, or supplier payment which is make by you.
- Bank transactions – deposits, withdrawals, and transfers every entry of bank transactions.
- Payroll entries – salaries, bonuses, and reimbursements depending upon your requirements.
The virtual bookkeeper ensure that every transaction is entered in the right category in charts of accounts so your reports later make perfect sense.
The goal of recording daily transactions is to Keep your books up to date, accurate, and ready for review anytime.
Step 4: Bank & Credit Card Reconciliation
Virtual bookkeeper makes sure that your recorded transactions match with your real bank and credit card accounts.
Reconciliation means are as:
- Comparing bookkeeping records with actual bank statement transactions.
- Checking that every income, every expense, and every transfer appears correctly.
- Identifying that there are not any missing or duplicate entries in accounts.
For example: if your bank statement shows a $500 payment to a vendor, the bookkeeper makes sure that the same transaction is recorded in your books with the correct date, vendor, and category with descriptions.
The goal of reconciliation is to be Ensure that your books and your bank are always in sync and there are no surprises later.
Step 5: Monthly Review of accounts and Closing
At the Month end, the virtual bookkeeper performs a month-end review.
This is where the bookkeeper double-checks everything:
- The virtual bookkeeper reconciles all bank and credit card accounts.
- They ensure that all invoices and bills are properly recorded and categorized as per rules.
- The bookkeeper review your income, profit & expense trends.
- They Prepare adjusting entries for prepaid expenses, depreciation, or other necessary updates.
Then they mark the month as “closed,” which means the data for that month is final and ready for reporting.
The goal of monthly review is to Keep each month accurate and complete you can see your business performance clearly.
Step 6: Financial Reports and Insights
Once the month is closed, your virtual bookkeeper prepares and shares key financial reports with you.
These reports include:
- Profit & Loss Statement – shows how much you earned and spent and also what is your profit for the specific period.
- Balance Sheet – shows what your business owns and owes as assets and liabilities.
- Cash Flow Report – shows how money moved in and out in the selected period.
A good virtual bookkeeper doesn’t just send numbers.
They also explain what’s behind them like why your profits went down, why expenses increased, or where you can save money.
Goal: Help you understand your business numbers and make smarter decisions.
Step 7: Accounts Payable & Receivable Management (AR and AP Management)
Accounts Payable (The amount you need to pay to the supplier)
- The bookkeeper track supplier bills which is due to payment and due dates.
- The bookkeeper also Make sure that the bills are approved and paid on time according to due dates.
- The bookkeeper gives age wise details to Avoid late fees and maintain vendor relationships.
Accounts Receivable:
- The bookkeeper Send invoices to clients.
- The bookkeeper also can Follow up on overdue payments from clients.
- The bookkeeper can also make sure that your cash flow healthy.
Step8: Regular Communication & Support
Even though your bookkeeper works virtually, communication stays constant.
They will:
- The virtual bookkeeper Send weekly or monthly updates.
- They discuss pending items or unusual transactions time to time.
- They Answer questions about reports, cash flow, expenses or any related query of business.
- They also Suggest ways to simplify your bookkeeping further like need any improvement in any work flow.
In current scenario virtual bookkeepers use tools like Slack, Zoom or Google Meet for quick chats and updates to business owner.
The main goal of regular communication is to Build trust and keep informed so the business owner never left wondering about accounts.
Step 9: Security and Confidentiality
Since everything is handled online, virtual bookkeepers take data security very seriously.
They use:
- Encrypted software and secure portals for data transfer and working.
- Two-factor authentication for logins.
- Restricted user access of software’s (view-only or accountant access).
- The virtual bookkeeper also signed confidentiality agreements (NDAs) to protect business data.
The goal of security is to Keep your business information 100% safe and private.
Step 10: Year-End Preparation and Tax Support
When the financial year ends, your bookkeeper helps prepare everything for your accountant or tax consultant so your final accounts and tax related working are smooth.
They will:
- The virtual bookkeeper Make sure that all accounts are reconciled.
- The bookkeeper also Prepares year-end reports like P&L, Balance Sheet, Trial Balance etc.
- They also Provide clean financial statements to business CPA or tax advisor for tax filings and final reports.
- They also answer any questions from the owner, tax advisor or CPA team of business.
This all process makes tax season smooth, stressless and with no missing receipts.
Step 11: Continuous Improvement
A professional virtual bookkeeper not only “maintain” your books but also, they help you improve over time.
They might:
- Identify areas to save costs in business.
- Suggest better tools or automation apps for efficiency and smoothness in business.
- Help you forecast cash flow and plan budgets accordingly.
- Track growth trends to support your decision-making.
A virtual bookkeeper not only a remote worker but they’re also your financial partner who helps your business stay organized and fully compliant.
When they handle your accounts properly, you get:
Accurate financial data
Timely reports
Stress-free tax seasons
More time to focus on growing your business
At XpertKeeping, we follow this complete workflow to ensure our clients from the USA, UK, and Australia enjoy hassle-free bookkeeping with total accuracy and transparency.
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