Virtual Accountant for a Small Business: Benefits, Costs, and Services They Provide

Online accounting services for small businesses are accessible and prevalent in today’s economy. As companies have navigated remote landscapes, they’ve realized accounting too can be virtual. Capterra reports 71% of businesses use virtual or outsourced accounting services in some capacity. This new method of accounting is here to stay.  

What Should an Accountant Do for a Small Business?

The accounting function in business covers many different skill levels. We group these functions into 3 main categories: Bookkeeping, Controllership, and CFO. The bookkeeping role is the most necessary, but as a small business grows, all 3 roles should be filled. 

Bookkeeping

The bookkeeping role is what most people think of when they hear the term “accounting.” Bookkeepers maintain the general ledger by managing AP/AR, credit card transactions, bank/credit card reconciliations, payroll services, merchant account reconciliations, financial reports, and deposit postings. 

Controllership

The controller’s role is to produce meaningful financial statements, formalize month-end close processes, reconcile balance sheets, maintain forecasts, and provide insights on KPIs. Often in small businesses, the controllership tasks are skipped. However, the controllership role brings meaning to your financials. It drives informed decision-making to grow your company, not just numbers to reflect growth. 

CFO

The CFO role is the strategic head of the finance function. They handle operational efficiencies, fundraising, management, board meetings, and oversight. CFOs also build financial models, pro forma cap tables, and forecasts. In small businesses, this role is often filled by outsourced CFO services or taken on by a CEO during the early stages. 

What Is a Virtual Accountant?

A virtual accountant is an accountant who does work 100% remotely. Typically, virtual accountants are outsourced companies or freelance workers. The outsourced companies create secure access lines to your accounting platforms, bank reports, credit card reports, and any monthly expenses management or bill pay software. Cloud-based accounting is safer than desktop or other traditional accounting methods because it’s safe from physical damage or wear. 

Why Hire a Virtual Accountant?

There are 2 main reasons to hire a virtual accountant for small businesses: cost and expertise. Businesses, notably small businesses, are realizing they need expertise earlier in the business lifecycle to get a competitive advantage. However, the funds do not match the need. 

The most cost-effective way to bring expertise into the accounting function of your business is by hiring a virtual accountant. 

How Much Does It Cost to Hire an Accountant for a Small Business?

Small business owners who need tax filing services, payroll services, etc. will likely want to work with an accountant. But how much does it cost to hire an accountant for a small company? 

How Much Does A Full-Time Accountant Cost?

According to Indeed, the average salary for an accountant in 2023 is $61,830. Companies also have to pay for benefits and retention. According to the United States Bureau of Labor Statistics, total benefit compensation averages 29.5% of the total cost of compensation for an employee in the private industry. In the case of the accountant, that’s an additional $25,872. In total, an accountant would average $87,702 annually. A controller averages $152,864 annually ($107,769 in salary, according to Indeed). Full-time accountants are pivotal to a growing business; however, many companies hire full-time too early, creating tight budgets. 

How Much Does Outsourced Accounting Cost?

The wide scope of potential services for fractional accounting firms makes price ranges difficult to nail down. Outsourced firms bill on a monthly or hourly basis for virtual bookkeeping services. The wide ranges below are reflective of both pricing and service differences. 

Monthly services range from $200/month-$800/month for bookkeeping services, $900/month-$1500/month for lighter controllership plus bookkeeping, and $2000/month-$3000/month for advanced controllership and bookkeeping services. 

Hourly services range from $40/hr to $90/hr for bookkeeping, $120/hr-$175/hr for controllership, and $200/hr-$400/hr for outsourced CFOs. This is more expensive than a freelance accountant, but typically outsourced firms offer more services, security, and experience. 

How Much Does Freelance Accounting Cost?

Freelanced accountants are the cheapest of the bunch. Typically, they primarily do bookkeeping work. They range as low as $25/hr up to $60/hr. Freelance accountants can charge less money because they have minimal costs to operate. Freelance accountants are great for very early-stage companies with few transactions or the need for a robust financial function. 

What Should a Small Business Expect from Online Accounting Services?

Beyond the tangibles and deliverables mentioned in the first section, such as tax services, small businesses should expect communication, timeliness, and advice from their accountants. Communication is essential to understanding the “why” behind numbers. Unanswered questions or unclear metrics lead to uninformed decisions. 

Timeliness is important for posting journal entries and updating financial reporting. Businesses need real-time financials to make decisions based on cash flow, revenue, and other key performance indicators. 

Higher-level accountants are best utilized when they have a voice in the room. Their familiarity with the numbers can drive strong recommendations that are information-based. Even if they are not in leadership meetings for decisions such as hiring periods or service changes, their perspective and information should be considered part of good meeting preparation. 

Get The Best Online Bookkeeping Services For Your Small Business 

Milestone is an outsourced, virtual accounting company built to help small businesses take the next step in their accounting function. We specialize in bringing tech-driven processes and higher-level accounting expertise to small businesses while maintaining that fractional price tag. Contact us today for more information about how Milestone’s online bookkeeping service can help your business grow.