What is a Virtual Bookkeeper? How Much They Make & Services Offered

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What is a Virtual Bookkeeper? How Much They Make & Services Offered

August 30, 2024

A virtual bookkeeper is a financial professional who offers remote bookkeeping services. They handle various financial tasks like categorizing transactions and preparing financial statements. They also maintain and update records using different accounting software.

Virtual bookkeepers maintain accurate financial records. They reconcile bank statements and process accounts payable/receivable. They prepare financial reports and comply with tax regulations. Bookkeepers assist the management in budgeting and forecasting

Doctors, attorneys, and real estate investors are the top clients of virtual bookkeepers. They are flexible and very cost-effective. Bookkeepers use tools like QuickBooks to properly manage accounts. According to ZipRecruiter, the average hourly pay for a virtual bookkeeper in the US is $24.31. The salary can range from $12.98 to $35.58, depending on expertise.

Bill Von Fumetti is a successful CPA-turned-virtual bookkeeper. He saw high demand for bookkeeping services during tax season. He focused on educating others about the tax benefits of owning a business. Bill also taught students how to form an S corporation and the Augusta Rule. He created retirement accounts to help reduce tax liabilities and save money.

Businesses can streamline their financial tasks by hiring virtual bookkeepers. They can access financial data anytime, from anywhere. This allows faster and better decision-making. This article defines the roles and responsibilities of a virtual bookkeeper. I'll discuss how it works, how to become one, and how much you can make. The top tools used and the top services offered are also shared in this article.

What is the Work of a Virtual Bookkeeper?

A virtual bookkeeper handles a range of financial tasks for small businesses. They use cloud-based tools to perform bookkeeping functions and ensure records are updated. Virtual bookkeeping involves managing financial transactions and categorizing expenses. They also reconcile statements online through cloud-based software.

Virtual bookkeepers record daily transactions. They monitor cash flow and generate financial reports. Bookkeepers organize transactions into appropriate categories. They ensure financial data is accurately logged. This should match with bank statements and all recorded transactions. They verify if the transactions are accurate and create needed financial statements.

Virtual bookkeeping works by using cloud-based tools to manage financial transactions. They also use these to maintain accurate financial records. This service is essential for small businesses, non-profits, and e-commerce companies. Virtual bookkeeping provides efficient and up-to-date financial reporting without on-site presence.

What are the Services that Virtual Bookkeepers Can Offer?

Accounts Receivable Management: It's one of the best services that remote bookkeepers offer. This involves creating and sending invoices to clients. Bookkeepers monitor payments and follow up the overdue invoices. They record deposits and reconcile them.
Accounts Payable Management: Virtual bookkeepers receive, organize, and pay bills on time. They organize business expenses and categorize them appropriately. They also ensure payments are made accurately.
Bank Reconciliation: Bookkeepers match the bank statements with financial records to ensure accuracy. They identify discrepancies between the bank records and the company’s books.
Payroll and Benefits: Virtual bookkeepers calculate and disburse employee salaries and bonuses. They also withhold, file, and report payroll taxes. They manage employee benefits like health insurance and retirement plans.
Financial Reporting: This involves preparing profit-and-loss statements to show business performance. Bookkeepers prepare accurate balance sheets that show the company’s financial position. They create cash flow statements that track the inflow and outflow of cash. This helps assess the business’s liquidity.
Budgeting and Forecasting: Bookkeepers plan financial budgets based on historical data. They estimate future expenses to maintain a healthy cash flow. They also create multiple financial scenarios to prepare for potential changes.
Tax Preparation and Planning: This involves organizing and preparing documents needed for tax filings. Bookkeepers ensure timely and accurate filing of business taxes.
Inventory Management: Bookkeepers may also be asked to monitor and keep inventory records. They calculate the costs associated with the production of goods sold.
Expense Management: Sorting business expenses into the correct categories is also a bookkeeper’s work. This includes organizing and storing receipts for expense verification and audits.
Audit Preparation: Bookkeepers also offer financial records preparation for external audits. They ensure that all records meet legal and regulatory standards.
Consulting Services: Bookkeepers may also offer their professional advice. This includes consultation on financial strategies and big business decisions. They may also offer business analytics and provide insights on potential business growth.
Data Entry and Record-Keeping: This includes the recording of daily financial transactions. Bookkeepers organize and sort financial documents for easy retrieval.

How To Become a Virtual Bookkeeper?

Get a formal education to become a virtual bookkeeper. Take courses in accounting, finance, or business management from local colleges or online.
Practice using accounting software and understand tax laws. Learn how to use QuickBooks and Xero, and familiarize yourself with tax regulations.
Gain practical knowledge by volunteering for family and friends. This will help you understand the business better.
Once you’re confident in your skills, start your own virtual bookkeeping business. This involves creating a business structure and setting up your virtual office.
Start building your client base by marketing your skills. This could include advertising online and building your network.

What Are the Types of Clients Virtual Bookkeepers Work With?

Small Business Owners: These are often small, family-run businesses. They need help with day-to-day financial management, invoicing, payroll, and tax preparation. Their goal is to ensure accurate financial records and to comply with tax regulations.
Freelancers and Independent Contractors: These are self-employed professionals who offer specialized services. This includes web developers, graphic designers, and copywriters. They work alone or with a small team and manage multiple clients simultaneously. Freelancers need help in tracking income and expenses. They also need assistance in managing invoices in preparing tax reports.
E-Commerce Businesses: These are sellers on Shopify, Amazon, or Etsy. They may deal with a high volume of transactions, including sales, refunds, and international payments. Virtual bookkeepers manage complex inventory systems and reconcile payments from various platforms. They also handle sales tax reports and track the overall financial performance.
Real Estate Agents and Property Managers: They need help in tracking income. Bookkeepers manage client payments, prepare financial reports, and ensure compliance with tax laws specific to real estate.
Non-Profit Organizations: They need detailed financial reporting to satisfy donors and regulatory bodies. Bookkeepers help in managing donations and tracking expenses. They also help the organization prepare for external audits.
Small and Mid-Sized Law Firms: They need meticulous bookkeeping to track billable hours. Bookkeepers also help with preparing financial reports and managing payroll.
Medical and Health Professionals: This includes private practitioners, dentists, and physical therapists. They need assistance with managing billing and payments. Bookkeepers may also be asked to do the payroll.

How Much Do Virtual Bookkeepers Make?

Virtual bookkeepers make from $25 to $30 per hour. This hourly rate is higher than the national average. Those running their own virtual bookkeeping services often make around $60 to $100 per hour. New virtual bookkeepers earn between $12 and $24. The rate depends on initial skills, certifications, and the complexity of tasks.

This commenter said experienced bookkeepers charge $70 to $100 per hour. A bookkeeping assistant is paid around $20 to $25 hourly. Freelancers make around $40.

This virtual bookkeeper says he charges $65 per hour. He claims to have lots of clients who are happy with his service.

This one said he makes $25 to $40 per hour. He only has two clients and is not actively looking for new ones.

Experienced bookkeepers are not afraid to charge higher. According to them, clients will pay more for competence and privacy. His business grew through client referrals.

What are the Top Tools and Software that Virtual Bookkeepers Use?

QuickBooks Online

It is one of the most widely used cloud-based accounting software platforms. QuickBooks has invoicing, expense tracking, payroll management, and financial reporting. It’s the leading accounting service software in the market with over 4.5 million users.

Automates accounting tasks like bank reconciliation, tax calculations, and payroll.
Connects with over 650 third-party apps. This includes CRM systems, payroll services, and inventory management.

Xero

It is popular for its user-friendly interface and robust accounting features. Xero allows bookkeepers to access up-to-date financial information and collaborate with clients in real-time. It is especially popular in New Zealand, Australia, and the UK.

Xero automatically imports and categorizes bank transactions.
Customizable invoicing templates and automated reminders that streamline cash flow management.

Wave Accounting

It is a free accounting software that caters primarily to small businesses and freelancers. It offers basic accounting features, including invoicing, receipt scanning, and expense tracking.

The core accounting features, like invoicing and expense tracking, are free.
Designed for users with little to no accounting experience.

FreshBooks

It is a cloud-based accounting software for service-based businesses like freelancers and consultants.

Integrated time tracking allows bookkeepers to bill clients based on hours worked.
Customizable invoices, automated reminders, and online payment options simplify the billing process.
Automatically imports expenses from bank accounts and categorizes them.

Zoho Books

It is part of the Zoho suite, a comprehensive set of business tools. Zoho Books offers advanced accounting features and is well-suited for small to medium-sized businesses.

It supports different currencies and languages.
Automates invoice creation, payment reminders, and expense approvals.

Can You Start a Virtual Bookkeeping Business Under $5K?

You can start a virtual bookkeeping business under $5K. The initial expenses only include high-quality computers, reliable internet access. You'll also need QuickBooks or Xero subscription. Website, hosting, and domain name are also part of the initial expenses. Other costs include business registration, software, and marketing.

Virtual Bookkeeping Courses

The Booming Bookkeeping Business course by Bill Von Fumetti. It teaches how to become a virtual bookkeeper without experience. The 90-day course covers setting up your bookkeeping business. It also covers accounting fundamentals and client acquisition strategies. Reviews are mixed. Some praise the course for helping them secure high-paying clients. Others find it less effective than advertised. The official site highlights students who make $75,000 and over $100,000 annually.

Why I Became a Digital Landlord Instead of a Virtual Bookkeeper

I became a digital landlord because I believe this business is more scalable. Virtual bookkeeping is a job and not a business. It’s a competitive industry and it might be difficult for new entrants to gain a foothold. You might struggle to get clients at first. It’s a challenge to maintain consistent revenue without a steady flow of clients. As a bookkeeper, you are responsible for your client’s confidential information. Your business should be protected against cyberattacks and data breaches. I think virtual bookkeeping can be a headache if it’s not your niche. Not anyone can start a bookkeeping biz anytime and make money right away.

Building digital assets through local lead generation is the number 1 online business. The goal is to build simple websites for local businesses and generate leads from them. Once the sites are ranked, organic leads flow on autopilot. In virtual bookkeeping, you’re pressured to meet the expectations of your clients. With local lead generation, you have full control of the business. Clients stick with you long-term to keep getting leads. It’s much easier than becoming a virtual accountant. And, I make at least 85% margins for every lead I organically generate.

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Ippei Kanehara

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$52K per month providing lead generation services to small businesses

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His #1 online business recommendation in 2024, is to build your own lead generation business.