The Rise of Online Accountants for Small Businesses

Online Accountants for Small Businesses

In today’s digital era, more and more services are moving online – including accounting and bookkeeping for small businesses. Powered by cloud-based software and secure file sharing, a growing number of small business owners are opting to hire accountants who operate virtually rather than locally.

Online accountants provide many of the same services as traditional accounting firms, but in a more flexible and often cost-effective way. They cater specifically to the needs of freelancers, startups, ecommerce stores, and other lean operations looking for on-demand financial guidance.

Whether you’re just launching or seeking to outsource accounting for an established small business, here’s an in-depth look at the advantages of working with an online accountant.

Services Offered by Virtual Accountants

While specific capabilities vary by provider, most reputable online accounting firms offer a comprehensive set of services tailored for small businesses, including:

Bookkeeping

Recording income/expenses, managing accounts payable/receivable, reconciling bank statements, and generating financial reports like profit & loss statements, balance sheets, and cash flow projections.

Tax Filing

Preparation and filing of sales tax, income tax, payroll tax, along with representing clients in the event of audits or disputes.

Payroll Processing

Handling payroll calculations, direct deposits or checks, W-2s/1099s, withholding taxes, and unemployment insurance.

Financial Reporting and Insights

Producing monthly reports with financial metrics, ratio analysis, visual dashboards, budgets, forecasts, and insights around the business’ financial position.

CFO Advisory

High-level strategic guidance around cash flow, fundraising, tax planning, financial modeling, and optimizing operations for profitability.

New Business/Entity Setup

Filing paperwork to incorporate LLCs, corporations, DBAs, obtaining tax IDs, and handling other formation tasks.

The majority of online accounting firms utilize cloud accounting software like QuickBooks Online, Xero or FreshBooks to collaboratively maintain and share access to your financial data.

Benefits of Hiring an Online Accountant

While pricing, service packages and specialities vary across different providers, most small businesses look to online accountants to take advantage of key benefits like:

Affordability

Online accountants charge a fraction of what traditional firms bill, with monthly fees ranging from $200-$500/month for most small businesses. This makes accounting services accessible to solopreneurs and startups.

Scalability

As your business and accounting needs grow, you can easily scale up the scope of services from your online accountant. No complex transitions needed.

Specialization

Many online accounting outfits focus solely on working with small businesses and freelancers, understanding your unique challenges and workflows.

Faster Turnaround

In many cases, online accountants utilize process automation and efficiencies to deliver quicker completion of tasks like bookkeeping, tax prep, or financial reporting.

24/7 Collaboration

With cloud infrastructure and digital communication channels, you can securely share documents and data with your accountant any time, day or night.

Flexible Expertise

Online firms can assemble specialized teams for different components like accounting, taxes, payroll and advisory – giving you greater expertise levels.

Premium Technology 

Most online accounting services are powered by best-in-breed cloud software versus older, more limited desktop programs.

No Geographic Limitations

You aren’t constrained to only accounting firms in your local area – you can hire the ideal online accountant based on capabilities vs physical location.

While in-person interaction may be preferred for some small businesses, many are finding that virtual accountants can provide comprehensive services without the premium price tag of a traditional accounting firm.

Popular Online Accounting Services

A number of national providers have emerged to meet this growing demand among small businesses for affordable, online accounting. Here are some of the leading players:

Bench

This is one of the pioneers in the online accounting space, offering premium bookkeeping backed by software like QuickBooks Online and dedicated financial analysts. Plans start at $249/month.

Indinero

Focused on businesses making over $1 million in annual revenue, Indinero provides accounting, tax, and CFO advisory services with teams dedicated to each client.

KPMG Spark 

From one of the big four accounting firms, KPMG Spark gives entrepreneurs access to CPAs and accounting software starting at $395/month with tax services as an add-on.

Pilot

With a focus on technology companies and ecommerce businesses, Pilot’s software connects businesses to a dedicated online booking team starting at $599/month.

Paro

Geared towards freelance and professional service businesses, Paro offers accounting, tax advisory and CFO services with flat monthly fees from $200-$900 per month.

Taxfyle

For basic tax preparation, filing, and IRS communications, Taxfyle provides a remote team of CPAs to handle personal and business tax filings starting at $349/year.

Services like these allow small business owners to work with dedicated accounting teams through simple monthly or annual pricing plans – there’s no need to cover pricey overhead from brick-and-mortar accounting firms.

Evaluating Online vs. In-Person Accountants

Of course, hiring an online accounting service isn’t the right choice for every small business. There are pros and cons to weigh against working with a local accounting firm:

Reasons to Hire an Online Accountant

  • Lower costs and more flexible pricing
  • Access to specialized expertise across accounting, tax, payroll
  • Cloud-based collaboration tools for any time access
  • No geographic restrictions – work with the best provider
  • Ability to scale up or down services as needed

Reasons to Hire a Local Accountant

  • Face-to-face interaction and relationship
  • Advisor who understands local tax and regulatory environment
  • More years of experience working with established businesses
  • Physical presence if audits or IRS communications are needed
  • Can provide a broader range of business advisory services

The decision may come down to factors like the business’s size and complexity, budget, and whether there’s a strong need for frequent in-person meetings. Startups and freelancers just needing basic bookkeeping, tax, and payroll services can save significantly with an online provider.

However, multi-million dollar businesses planning fundraising, M&A activity or other sophisticated moves may still prefer the white-glove service, years of experience, and in-person touchpoints that a premium accounting firm can offer.

The Bottom Line

For countless small businesses and freelancers lacking the resources for full-time accounting staff, working with an online accountant is an excellent solution to get professional-grade financial support and reporting in place.

With advanced cloud platforms and secure data sharing capabilities, online accounting services can comprehensively manage the books, taxes, payroll, and financial analysis for small businesses in virtually any industry or location.

And because overhead costs are much lower than traditional brick-and-mortar firms, online accountants can deliver this expertise with affordable, transparent pricing models that mean small businesses no longer have to go it alone.

While not every small business needs to make the switch to an online accounting service, the growth of capable and specialized providers is making it easier than ever to get the financial management support required to grow and thrive.

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GNS Associates

Online Accountants Serving You Anywhere in the UK Tax Saving. Tax Planning. Cost Minimization. 24*7*365 Support. Anywhere, Anytime

Contact Information

GNS Associates
Boundary House, Cricket Field Road, Uxbridge, UB8 1QG
0208 090 2604

info@gnsassociates.co.uk
www.gnsassociates.co.uk
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