Virtual accounting firms are cropping up more and more often, allowing business owners to outsource all of their company’s accounting responsibilities.
Although it’s not an appropriate move for a very large corporation, Tracy Soulsby, CPA, and president of Soulsby Accounting Group in Akron, says outsourcing work to a virtual accounting firm could benefit a small- or mid-sized company.
Companies outsource accounting work for a variety of reasons. Soulsby says some have been doing their own accounting and have grown to where they want to offload those responsibilities. Another company might have an internal accounting professional who is leaving, and the CEO doesn’t want to replace him or her. A third may be trying to streamline office processes and is looking for ways to downsize.
“(Saving money) isn’t the highest priority. They’re more concerned about making their life easier, and if they can save money, of course that’s just an added bonus,” Soulsby says. “I estimate that they can save between 20 (percent) and 30 percent when factoring in direct and indirect costs of having an in-house (accounting department.)”
Direct costs include payroll and benefits; indirect costs include office space, computer equipment and software.
Having a virtual accounting department can also eliminate personnel headaches, doing away with turnover and supervision issues.
Soulsby says many companies have internal bookkeepers who have to play catch-up at tax time. Having a virtual accounting department allows a company to have accurate numbers all year long, as well as a consultant who can explain the “why” behind the numbers.
She says if a business owner is going to take this step, he or she must be comfortable with the virtual accounting firm’s qualifications. What is its experience? How long has it been in business? Does it have the resources to handle the degree of work that the business wants to hand off? What kind of clients has it worked with in the past? And ask for references.
There’s also the question of hiring virtual CPAs versus virtual bookkeepers. Although it’s not required for a virtual accounting department to include CPAs, Soulsby says CPAs have a higher level of knowledge about accounting procedures and the tax implications of transactions.
A CPA can advise on budgets and “specialized financial analysis, like leasing versus buying, moving versus staying put, hiring versus not hiring. A CPA can help with (those issues) more so than someone who’s just doing bookkeeping,” Soulsby says.
Before signing a contract with a virtual accounting firm, a business owner should discuss how the firm handles sensitive client information, how it disposes of personal documents and how information is kept secure when it’s being sent via the Internet.
Finally, should a company owner be concerned about working online with an accountant whom he or she has never met?
Soulsby says that’s not dealing face-to-face is not an issue because the accounting firm is just a phone call or an e-mail away.
HOW TO REACH: Soulsby Accounting Group, (800) 584-2721 or www.soulsbyaccounting.com
