Difference between Virtual vs Online accounting services

In pursuit of growth and profits, many businesses cut unnecessary costs or resort to more affordable alternatives. One such way is to outsource the accounting and bookkeeping functions to experienced consultants instead of hiring an employee or a group of professionals to work in-house. Hiring a full-time employee comes with challenges and increased costs.

In this era of automation and the services of third-party experts, the question arises whether to go ahead with virtual or online accounting and bookkeeping services.

This article addresses the concern around the basic understanding of concepts of virtual and online accounting and bookkeeping services and the difference therein.

Online vs Virtual accounting and bookkeeping services

For accounting and bookkeeping functions, the terms outsourced, virtual, or online are primarily used interchangeably by the public. However, there is a significant difference between these concepts, which we will discuss in this section.

Parameters	Virtual Bookkeeping & Accounting	Online Bookkeeping & Accounting
Meaning	Virtual accounting and bookkeeping refer to seeking accounting-related assistance from third-party experts over the internet. This team of professionals would not be situated in the same geography as the business. Using the internet, technology, and computers, accounting and bookkeeping are being performed virtually, without physically visiting the business premises.	Online bookkeeping and accounting refer to the concept of using accounting and bookkeeping software and applications that record financial transactions and serve the periodic summary in the form of monthly and annual reports.
Basic Concept	Reliance on third-party consultants for accounting and bookkeeping needs	Reliance on software and applications to carry out accounting and bookkeeping
Team Size	Virtual accountants or bookkeepers are professional firms undertaking the jobs on behalf of other businesses. Accordingly, they are generally a team of professionals with diversified experiences and qualifications.	With everything being possible with just a click of a mouse, there would be lesser dependencies on human resources. Businesses do not require a team to do the accounting or bookkeeping; the same is automatically taken care of through the software or sometimes with just one operator.
Relevance	If your business is complex and your decision-making depends on accurate and real-time financial information, virtual accounting and bookkeeping services would be relevant as its team of professionals offer 24*7 services with intelligent MIS reports while ensuring the comprehensiveness of data, accuracy, and effectiveness of the recording. This option suits data-driven business decisions and calls for a personalized solution. Leveraging the benefit of human intelligence and experience.	Suppose your business operations are simple, and you are a small-sized company. In that case, you may resort to online accounting and bookkeeping using readily available solutions in the market at an affordable cost. With this option comes the limitation on customization and smart reports to make informed business decisions. As the business grows, the solution will demand an additional cost for necessary upgrades. Relying on technology’s coding and configuration.

Having understood the concept of virtual and online accounting and bookkeeping services, let us understand the roles and duties of the accountant and bookkeeper under these options.

Roles of a virtual accounting & bookkeeping service provider

Data entry
Effectively managing the expenses payout and receipt of incomes
Reconciling the trade records – accounts receivable and payables
Managing the payrolls
Budgeting
Customized and intelligent MIS reporting
Cash flow management
Preparation of the financial statements
Offering virtual CFO services
Tax consultancy support
Ensuring deployment of relevant internal controls relevant for documentation and financial transactions

Roles of an online accounting and bookkeeping software

Capable of effectively recording the transactions
Preparation of budget forecasts
Auto generation of financial statements
Effectively handling monthly, quarterly, and annual closings
Reconcile receivables and account payables
Computing the payable tax amounts
Standard MIS reporting

Conclusion

If you are confused about whether you should outsource all your accounting and bookkeeping requirements to virtual accountants or opt for an online accounting solution, then allow CFO UAE to address your concern, who would discuss your business and suggest you the best alternative. CFO UAE is the expert in the industry and knows their job thoroughly.

Difference between Virtual vs Online accounting services