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virtual bookkeeping

An Introduction to Virtual Bookkeeping in the UK


As a small business proprietor seeking efficiencies in both time and expenditure within your accounting operations, the adoption of virtual bookkeeping presents a compelling solution. This progressive approach to managing financial data not only upholds the precision associated with conventional bookkeeping methods but also liberates valuable hours in your busy schedule. In the subsequent discourse, we delve into the intricacies of virtual bookkeeping, elucidating its advantages for small enterprises. Additionally, we will examine the inherent limitations and furnish practical insights for initiating virtual bookkeeping seamlessly. For those contemplating the establishment of their own bookkeeping venture, we will offer constructive ideas. Whether you are in the early stages of exploring solutions or are adept at navigating financial intricacies, this article aims to furnish invaluable guidance on optimising the utility of virtual accounting services for your small business.

What are the responsibilities of a bookkeeper?

The role of a bookkeeper encompasses the meticulous maintenance of precise financial records within a company. This duty extends to tracking and documenting all financial transactions, encompassing purchases, sales, receipts, and payments. The organised compilation of this data into essential financial statements, including income statements and balance sheets, falls under the purview of a bookkeeper. Furthermore, they undertake the crucial task of reconciling bank accounts, ensuring the accuracy and currency of all financial reports.

It is essential to dispel the common misconception that bookkeepers and accountants are interchangeable roles. Although both professions revolve around managing a company’s finances, noteworthy distinctions exist. Bookkeepers are primarily engaged in day-to-day responsibilities, focusing on the recording of transactions. In contrast, accountants assume a more analytical role, deciphering financial information to facilitate informed decision-making for the business.

Why Virtual Bookkeepers and How Do They Work?

Virtual bookkeeping is a contemporary approach where a bookkeeper conducts their tasks exclusively online. In essence, they carry out the same responsibilities as a traditional bookkeeper, managing accounts payable and receivable, recording transactions, generating financial reports, and reconciling bank statements. The distinctive aspect lies in the remote execution of these duties, presenting a valuable opportunity for small businesses to economise both time and resources.

Engaging with a virtual bookkeeping service mirrors the interaction with an in-house bookkeeper, albeit with all communication and file-sharing activities transpiring online. This implies that a business can enlist the services of a bookkeeper from any location worldwide, provided they have access to a computer and an internet connection. This virtual arrangement not only offers flexibility but also facilitates efficient collaboration, underscoring the convenience and practicality of remote bookkeeping solutions.

Virtual Bookkeepers are responsible for? – Roles

The roles and responsibilities of virtual bookkeeping are contingent upon the specific requirements of individual businesses. Nevertheless, there are standard tasks that virtual bookkeepers typically undertake, including:

  • Overseeing accounts payable and accounts receivable
  • Data entry of financial transactions using dedicated software
  • Drafting and dispatching invoices
  • Reconciling bank and credit card statements
  • Generating comprehensive financial reports for specified accounting periods, encompassing profit and loss statements and balance sheets
  • Year-end reconciliation of accounts
  • Administering payroll and managing employee expenses
  • Monitoring inventory levels and tracking orders
  • Collaborating with an accountant for services beyond the scope of bookkeeping

In addition to these fundamental tasks, virtual bookkeepers may also assume additional responsibilities such as preparing tax returns, efficiently managing cash flow, and offering valuable financial insights and recommendations. This multifaceted approach underscores the versatility and comprehensive support that virtual bookkeeping can provide to businesses.

Advantages of Virtual Bookkeeping

Collaborating with a virtual bookkeeping practice offers several advantages, including:

  • Cost savings: Opting for a virtual bookkeeper tends to be more economical than hiring an in-house counterpart. This eliminates the need for providing office space, equipment, and benefits.
  • Flexibility: Virtual bookkeepers operate from any location, enabling them to be available to a business beyond standard office hours. This flexibility enhances accessibility and responsiveness.
  • Expertise: Many virtual bookkeepers are highly skilled and seasoned professionals. Leveraging their expertise, they can furnish valuable financial insights and recommendations, contributing to the overall growth of a business.
  • Accuracy: Virtual bookkeepers utilise advanced bookkeeping software, significantly contributing to precision and minimising the risk of errors. The integration of technology ensures a reliable and meticulous approach to financial management.

Drawbacks of Virtual Bookkeeping

While a virtual bookkeeper can offer significant advantages to many business owners, it is essential to acknowledge certain limitations:

  • Lack of in-person interaction: The remote nature of virtual bookkeeping translates to a lack of face-to-face communication. Building a robust relationship and effective communication may be challenging, particularly when confronted with language or cultural barriers.
  • Dependence on technology: Virtual bookkeepers heavily rely on technology for their operations. Technical glitches in software, connectivity issues, or other technological hiccups can disrupt their workflow and lead to delays in tasks.
  • Security concerns: Virtual bookkeepers handle sensitive financial data, necessitating meticulous management of security risks. Ensuring the secure storage and transmission of data becomes crucial to prevent breaches and safeguard the privacy of sensitive information.
  • Limited on-site support: As virtual bookkeepers operate remotely, they may not be physically present in the office. This absence could pose challenges in providing on-site support for issues that require in-person assistance.

Despite these limitations, many businesses find that the benefits of engaging a virtual bookkeeper outweigh the potential drawbacks. By thoroughly assessing your business’s needs and the services a virtual bookkeeper can offer, you can make an informed decision regarding whether it aligns with the requirements of your company.

Virtual Bookkeeping for Small Businesses

Virtual bookkeepers prove to be a fitting choice for businesses across various scales, with a particular emphasis on their benefits for small businesses. The suitability arises from the inherent challenges faced by small enterprises, often constrained by limited resources and budgetary constraints. In such scenarios, where a full-time, in-house bookkeeper may strain the financial limits, the option of collaborating with a virtual bookkeeper becomes highly advantageous. This approach empowers small businesses to receive the necessary financial support without exceeding their budgetary constraints. The flexibility and cost-effectiveness of virtual bookkeeping services make them an ideal solution for businesses seeking efficient financial management within their means.

How to start Virtual Bookkeeping?

Embarking on virtual bookkeeping for your business? Consider these tips to ensure a smooth start:

  1. Define your bookkeeping needs: Clearly outline the areas where you require assistance, be it managing accounts payable and receivable, reconciling bank statements, or preparing financial reports. This clarity will guide your search for a virtual bookkeeper with the appropriate skills and experience.
  2. Research potential bookkeepers: Explore virtual bookkeepers with a track record of working with businesses similar to yours. Scrutinise their credentials and seek references from their clientele. Opting for a bookkeeping service with multiple professionals can offer increased support and flexibility.
  3. Set clear expectations: Once you’ve selected a bookkeeper, engage in detailed discussions about your expectations, including communication preferences, project timelines, and assigned tasks. Establishing clear expectations ensures alignment and mitigates the risk of misunderstandings.
  4. Use cloud-based accounting software: As your virtual bookkeeper will require access to your financial data, leverage online accounting software that facilitates remote accessibility. This ensures seamless collaboration and enables your bookkeeper to operate with the latest information.
  5. Establish communication protocols: Given the remote nature of the arrangement, define clear communication protocols. This may involve scheduled check-ins via phone or video conferencing, regular email updates, or instant messaging. Robust communication frameworks contribute to effective collaboration with your virtual bookkeeper.

By adhering to these tips, you can initiate virtual bookkeeping with confidence, maximising the value derived from your chosen bookkeeping professional.

What Are the Substitutes of Virtual Bookkeeping?

For those who may not find virtual bookkeeping suitable, alternative options exist. One approach is to hire a local bookkeeper or accountant to oversee your financial matters. This offers the convenience and assurance of having a professional on-site to review and manage your books.

Alternatively, you can opt to handle your bookkeeping manually or utilise accounting software like QuickBooks. Doing it independently can result in cost savings, but it demands patience and meticulous attention to detail to ensure accuracy.

Whichever route you decide to take, it is imperative to thoroughly comprehend the implications involved before making a choice on how to best manage your financial records. Evaluating the pros and cons of each alternative ensures that you make an informed decision aligned with your business’s specific needs and preferences.


In summary, virtual bookkeeping emerges as a valuable asset for small businesses aiming to effectively manage their finances without incurring excessive costs. Collaborating with a virtual bookkeeper enables businesses to achieve cost savings, access specialised expertise, and leverage flexible remote support. The key lies in utilising appropriate tools, establishing clear expectations, and adeptly managing security risks. By implementing these measures, businesses can optimise the advantages offered by an online bookkeeper while mitigating potential drawbacks.

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