The Covid pandemic has inadvertently resulted in numerous improvements in business operations, including virtual accounting. It didn’t initially appear to be this way, and many accounting companies had doubts about their capacity to shift from the office-based setting with its substantial paper load to the virtual structure. There was a level of comfort with being able to walk across the office to get a signature or confirmation on a question, and the transition was especially hard on those accounting firms that relied on manual processes almost exclusively. The link to the customer involved face-to-face meetings onsite or the client just being able to pop in with a query. Additionally, it was hard to perceive how employees’ performance would be managed without walkabouts and keeping an overall eye on the workforce.
However, once accountants had been exposed to a real-time, almost paperless environment, Zoom meetings, and eSignatures, they found themselves able to play a more strategic role for their clients. Employees were able to move from dealing with stacks of papers to where they could analyze a client’s financial direction and provide timely input. The benefits of virtual accounting were embraced, and other firms followed suit.
What Is Virtual Accounting?
Virtual accounting has moved accounting firms away from the traditional brick-and-mortar daily grind to remote work. This means that employees are home-based rather than working from a centralized office. Virtual accounting is achieved when your accounting and finance teams have cloud accounting software and other technology necessary to carry out all their activities and tasks remotely without being physically present in the office. This more contemporary method of working is more adaptable, effective, and economical.
Contrary to the conventional, manual processes that have long presented difficulties to accounting teams and constrained them to work five days a week in a corporate office, it is also scalable and sustainable. With fewer interruptions, virtual accounting can increase productivity while lowering travel costs and commute times.
The Pros and Cons of Virtual Accounting for Accounting Firms
The new setting was not without its downside in terms of initial costs. These companies have had to upgrade their equipment and software to make this change possible. But there were immediate positive aspects as well. For example, virtual accounting businesses are economical since, in many situations, there are no overhead costs such as office rent or utilities. As these companies switched to providing remote gear, such as laptops, tablets, or monitors for their staff, they incurred some initial fees. Nevertheless, the money that they saved more than offset those expenses.
There are also advantages to businesses that hire virtual accounting firms.
Business Agility and Virtual Accounting
It is essential for a company to know when they need to change strategies quickly to offset poor performance. When it takes weeks, or even months, to close out the month, quarter, or financial year-end, the information that management is dealing with is outdated. With virtual accounting, managers can view their performance in real-time. They can drill down to know which teams have not been meeting targets, and they can redirect work to bring the performance up to the required outputs. It will be clear what the bottom line looks at and management can come up with marketing campaigns and other strategies to quickly boost their sales and income.
Benefits to Employees
In 2021, the U.S. Census Bureau estimated that the average employee spends roughly 240 hours annually commuting to work. This is doubled if you consider that they have to return home after the day’s work is done. Areas with denser populations waste even more time commuting, with the mean time being multiplied by two or three.
Employees have noted that not having to commute has enabled them to devote this extra time saved to their loved ones, including family pets. This led to healthier, happier staff with a better work-life balance. There were significantly fewer sick days that companies had to pay for and when employees took time off work it was so that they could enjoy a vacation with their families.
Setting Up a Virtual Accounting Business
If you are ready to go into business as an accounting firm, one of your first considerations has to be whether you will set up your practice in a physical location or opt for a virtual scenario. You will also have to determine what your focus will be, for example, will you deal with taxation items for companies, or will you concentrate on analytics to help your clients improve performance and growth in size and financially?
You will also have to consider your preferred client base. Some accounting firms only want to work for corporations, while others opt for small businesses. The latter can be as successful as the former for your accounting firm. Accounting firms, like 1-800 started by Michael Savage New Canaan show that it is possible to manage 200,000 small business accounts with virtual accounting.
Another aspect to take into account is the degree of personal interaction you want your firm to have with its client companies. In the past, many clients had a preference for dealing with one person face-to-face for all of their needs. But as their businesses have also transformed to more virtual ways of working, this is no longer as prevalent as it once was. Ask yourself, if you are still insistent on dealing directly with clients, if this is what makes you comfortable or if it is what your clients truly want.
Vision Statement, Company Culture, and Core Values
With staff working apart from each other and management, is there any point in fostering a positive and unified work culture for the whole company? Yes, with a virtual setup this is even more important to instill as it will dictate how your employees interact with your clients, how well they manage their time and deadlines, and even company turnover. Staff members want to feel that they are a part of something bigger. It is important to make some time to hold meetings where core values, the company’s vision statement, and the organizational culture are discussed and shared. This will also help you be clear on what your clients value and the niche in the marketplace that you have chosen to fill.
Setting Up Remote Offices
Even if you are moving to a virtual form from a traditional one, rather than starting a brand-new firm, employees should be given guidance on how to establish space at home for a virtual office. You will need to provide them with the computer hardware and accounting software that they need to perform their jobs. It may also be necessary to provide office desks and chairs to employees. These should be ergonomically designed to provide back support and prevent muscle strain.
Staff may not all have a spare room that can be dedicated as a work office but need to find a space large enough for their furniture and equipment. They should be coached on how to deal with potential disturbances such as family members not respecting their working hours. Adequate lighting, low sound, and fresh air are important to be able to work at their peak. They should be reminded to keep themselves hydrated and to take a five-minute break every hour to stretch their muscles if they have been sitting at their desks.
It might seem strange at first to adopt a virtual working style. But as you experience the numerous benefits and find yourself freed up to concentrate on more complex and interesting aspects of work, you will soon feel as if you have always been working this way.