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The Virtual Accounting Firm

For most firms in the accounting industry, having brick-and-mortar office space was foundational for legitimate existence. With a physical presence, potential and current customers could feel confident in the reliability of a permanent place. Certainly, physical office space was deemed necessary for any accounting firm with multiple employees. Consequently, paying a lease or loan payment was an acceptable part of doing business.

The satisfaction of writing that monthly check to the landlord or leasing company was ripe when the firm was in its early stages of growth. After time passed, watching money go into someone else’s pocket becomes old. As mindsets changed about physical business locations, technology has been with suggestions for the transition to a virtual presence.

Paperless technologies and cloud computing services are rewriting business rules in the areas of client services. Not surprisingly, the same forces opening new markets for accounting firms are making it possible to close brick-and-mortar doors and stay in business. Accounting firms are accepting new ways to have a virtual practice that does not compromise their legitimacy in delivering quality customer service. Processes are based in the cloud; accounting employees can work from home.

Why Virtual Accounting is Good for Business

For an accounting practice, going virtual is not just about how much can be saved in overhead expenses. Rather, accounting professionals are dedicated to providing accurate bookkeeping services to individual and commercial clients. They assist clients with managing their finances to improve cash flow, profit margins and operate with more stability.

In some businesses, accounting can take a back seat to other major functions – marketing and production. The focus on innovation and creating value for customers drives strategic goals that leave accounting as an afterthought. This is plausible for businesses with an unyielding belief that nothing happens until products are sold.

Once the product or service is sold, it must be produce. However, nothing is marketed or sold without the third part of the cycle – finance. Just because accounting functions are often given less resources does not diminish the importance. Information on transactions is crucial to developing a repeatable process for more profits. Virtual accounting services can provide this function that helps move businesses forward.

Businesses can continue to commit internal resources to marketing and production while the accounting firm focuses on managing cash flow to make it possible. Decision-makers can have access to financial data when needed through online access. Accounting is no longer viewed as a weakness, but rather, as adding value to overall business objectives.

Is Virtual the Right Fit?

While virtual accounting offers many benefits to clients, the reality is that not all firms are suitable for the journey. Typically, virtual is not simply a strategy, but is really a preferred means of service that clients need. If a majority of clients prefer physical contact with their accounting firm, going virtual would be bad for business.

Rushing the process because a firm is tired of making rent payments is not the best way to begin a measured approach. Questions abound for an accounting firm considering the switch. Is this a realistic option? How long does it take to go from physical operations to a virtual environment? Are there any benefits? What are the drawbacks? Asking – and answering – the right questions will help an accounting firm make the right decision.

For the right accounting firm with clients who prefer this type of access, it is a gift to join the virtual world. So, how can an accounting firm know if virtual services are the right fit? Besides client preferences, effective use of cloud-based services and applications is another determining factor. This requires a paperless transition for an industry that functions with printed material. Financial data kept in online applications should be accessible to personnel and clients just as it is with hard copies.

Another aspect to consider is work habits of employees. If employees are rarely in the office and clients seldom schedule in-person appointments, the accounting firm could be a prime candidate for the virtual world. However, if employees are not self-starters and need the occasional water cooler conversation, an accounting firm may need to rethink closing its physical doors too soon.

Making the decision to go virtual does not result in an overnight conversion. In many cases, the transition phase could last from several months to a couple of years. A plethora of processes, cloud services and administrative issues must be addressed before completely closing physical doors.

How a Virtual Accounting Firm Works in the Real World

In general, accounting and bookkeeping services can be outsourced to a virtual accounting firm that uses cloud-based applications. Depending on the nature of business for commercial clients, the firm might need a contact person who can provide data as needed. Online access to pertinent data about accounts may also be necessary.

Typically, a virtual accounting firm provides:

  • 24/7 online access for clients
  • Key Performance Indicator selection, analysis and reporting
  • A paperless environment – no paper checks or paper filing
  • Controls and oversight just as expected from in-house or brick-and-mortar accounting professionals

Gone are the hassles of hiring the right accounting skill set for a particular business. Individual and commercial clients are not left to manage accounting processes. Instead, the virtual accounting firm handles all aspects to product positive financial results.

Advantages to Using a Virtual Accounting Firm

There are several benefits to using a virtual accounting firm. Here are four for accounting professionals to trumpet to clients when considering the transition.

Cost savings – Hiring full-time accounting employees is an expensive labor cost that can be avoided. Health insurance, payroll taxes, physical space and similar costs for full-time employees are eliminated.

Convenience – Online filing and other accounting activities can be handled remotely while contributing to a paperless office environment.</p>

Concerns about staffing – Hiring a qualified accounting professional can prove challenging to some businesses. By outsourcing the function, clients do not need to worry about inefficiencies that may arise through improper filing or failure to maintain ethical standards of accounting.

Peace of mind – Accounting fraud is a major concern for most businesses and something all want to avoid. Fiduciary insurance and background checks on professionals by an outsourced firm can cover clients from potential fraud allegations.

Are There Any Disadvantages to Going Virtual?

While there are advantages to operating a virtual accounting firm, there are also a couple of disadvantages to consider. Some office functions such as answering telephone calls can project an unprofessional image in a virtual environment. Services exist for virtual businesses to have a live operator answer calls.

However, most of these services are shared among different companies. This leaves the operator at a disadvantage to answer specific questions that a potential client might have about the accounting firm’s services. In addition, the less professional perception of telecommuters has not fully changed. Colleagues still working in an office – and some clients – expect to receive more from those working in a physical location.

Decreased productivity is another issue to consider, especially for firms transitioning from brick-and-mortar to the virtual environment. Unless employees are disciplined, outside distractions can interrupt productivity and ultimately results for clients. Supervising employees from a virtual office presents challenges when important documents need signatures or filings are delayed.

Conclusion

Many accounting firms have found that closing brick-and-mortar doors works to their advantage. By starting with a plan that not only considers the impact to the firm, but also to clients, the transition can prove fruitful in many ways. Challenges to shuttering physical operations and building employee camaraderie through remote worksites have not overshadowed the benefits. Many can claim substantial benefits to staffing, operations and other business costs.

New accounting practices might have an easier transition than firms that have been in business for decades. Most already start with partial or completely virtual services. Unless progressive, scalable processes have been the norm, resistance to change could be a hindrance for longstanding accounting firms. Still, this should not be the defining factor in making the decision to have a virtual accounting firm.