Looking to hire a professional bookkeeper for your startup? Most people are familiar with the idea of a traditional on-site bookkeeper; a freelance, part-time, or full-time bookkeeper who is physically present in your workplace to carry out routine finance tasks. But there is an alternative: virtual bookkeeping.

Virtual bookkeeping, also described as remote bookkeeping or online bookkeeping, delivers all the same services. Except without the limitations of hiring within your local area and working around restrictive office hours. If you’ve only worked with on-site bookkeepers in the past, you might be wondering: What is virtual bookkeeping? And what can it offer your business that on-site options can’t?

I’ve spent more than a decade working in finance and accounting in both on-site and virtual roles; I’ve experienced the benefits and challenges of both approaches. To help you decide whether virtual bookkeeping is the right choice for your startup, let’s take a look at how it works and what makes a great virtual bookkeeper.

What Is Virtual Bookkeeping?

Virtual bookkeeping—also known as online bookkeeping—is the remote management of bookkeeping tasks using cloud-based finance software, removing the need for the bookkeeper to be on site. You can choose to work with an independent virtual bookkeeper. Or engage a virtual bookkeeping service and have access to their team of finance professionals.

So, how does online bookkeeping work? A virtual bookkeeper will handle all the same tasks as an on-site bookkeeper, including bill pay services, collections, expense management and month end close reconciliations. Where virtual bookkeeping differs from on-site bookkeeping is in the level of flexibility it offers. Virtual bookkeepers don’t have to schedule their time around office visits. So they can often work on your books throughout the week and at times that suit your company’s needs.

If you need additional bookkeeping support as you scale, you can leverage virtual bookkeepers; you can choose from thousands of bookkeepers working remotely from anywhere in the world, with no need to add extra desks in the office. This flexibility makes it easy for fast-moving startups to adapt their virtual bookkeeping to suit their changing requirements.

5 Things to Look For In a Virtual Bookkeeper

Regardless of whether the option you choose is on-site or virtual, working with a bookkeeping service that doesn’t fit your business’ needs can lead to many of the most common startup bookkeeping mistakes. There are five things to look out for when you hire a virtual bookkeeper to make sure you’re getting the right level of support for your startup.

1. Timeliness

If your bookkeeper only logs in once a week to pay bills and submit the payroll, your books won’t always be up to date. When you’re building financial metrics, you need to ensure you’re getting an accurate picture of your business’s current position. This is particularly important if you’re sharing these financial documents with potential investors. Look for a virtual bookkeeper who will track financial transactions and update your accounting software multiple times throughout the week. This way you can be confident that your books are always accurate and current.

2. Responsiveness

Instead of relying on in-person meetings, business owners communicate with a virtual bookkeeper differently; typically by using online tools like email, instant messaging apps, or video conferencing. As a startup, you might have time-sensitive bookkeeping needs (urgent customer requests or delivering data to investors). So it pays to make sure your virtual team will respond to your queries promptly. Ask the bookkeeper about their contact hours, average response time, and preferred communication channels. This will help you gauge how easy it will be to get a response when you need one.

3. Vertical-Specific Experience

There are many options to choose from if you’re not restricted to local bookkeepers; it’s easier to engage an industry specialist when you’re working with virtual bookkeepers. A bookkeeper or finance firm that has extensive experience working in your vertical and an existing relevant client base will understand the tools you use and the financial reporting and tax requirements for your industry, so they can save you time down the line. For example, if you run a manufacturing business, a bookkeeper with experience calculating the cost of goods sold (COGS) and working with inventory software won’t need a lengthy onboarding period and is less likely to make costly mistakes.

4. Automation

If your virtual bookkeeper uses automation tools including artificial intelligence and machine learning, they’re likely to process your data quicker and with greater accuracy than if they handled it manually. For example, some bookkeeping and accounting services use artificial intelligence for data entry, transaction categorization, and account reconciliation. This automation delivers error-free financial records. Plus, you’ll also get a faster turnaround on your month-end close, thanks to the high-speed processing.

5. Fixed Monthly Fee

Like most traditional on-site bookkeepers, some virtual bookkeepers and bookkeeping firms charge an hourly rate for their services. However, since you won’t have full visibility into how a remote bookkeeper is spending their time, you may be concerned they will bill you for unnecessary hours. You can avoid this by selecting  a virtual bookkeeper who charges a fixed monthly fee, rather than an hourly rate, so there are no surprises in your bill.

With the right virtual bookkeeper, your startup will benefit from a service that is industry-specific and more cost-effective than on-site bookkeeping options. A virtual bookkeeping solution will have the flexibility to continue supporting your startup or small business as it grows—no matter where that ends up taking you!