Virtual Bookkeepers Vs. Outsourced Bookkeepers
At networking events, construction contractors have asked me about the risks of someone working in an undisclosed location on their construction bookkeeping records.
I explain it this way virtual assistants can be a real asset to any contractors owner because they can handle a variety of mundane tasks better, faster than most contractors can and for a lot less money.
The time contractors save can be used to do things only they can do like meeting with clients, scheduling jobs and riding herd over apprentices. In short, doing the $50 to $100 an hour work and outsourcing the $15 to $25 an hour work to a virtual assistant makes sense. In the end everyone makes more money and gets more enjoyment because they are doing what they love to do!
However, contractors should not ever outsource important construction accounting services to a "virtual bookkeeper" because that is in my opinion foolish. The reason is simple; a virtual bookkeeper is usually a Bad Bookkeeper. This is someone with enough skill to bluff their way into a construction accounting job but without the skillsets to keep it.
The standard path of destruction starts when they discover that no legitimate construction company will hire them so they take a few online courses or attend a weekend seminar.
Armed with very little skill and no knowledge they setup a desk in their home and all of a sudden, they are a low overhead, low price, virtual bookkeeper wrecking ball looking for a contractor to test out their new found skills on. Hiring one of these jolly jokers is worse than turning an apprentice loose on a job site with a set of plans and some power tools!
You have all your eggs in one basket and nobody to oversee that one lonely bookkeeper. The things most contractors never even think about is what happens when get sick, take a vacation, get distracted, get overloaded with clients or simply pass away. Because when, not if, those things occur your contractors bookkeeping services needs will be way down the list of what is important to them and their heirs.
In addition, most virtual bookkeepers operate in a vacuum because they don't have anybody to talk too, no support other than help screens and paid phone support, which they rarely spend money on, and no incentive for continuing education because that cost them money.
Some of them will tell you they have ten years of bookkeeping experience, which really means is six months practice repeated twenty times over.
This harsh reality comes from reviewing hundreds of offers from virtual "Virtual Bookkeepers" to subcontract from us. In all the interviews we have conducted somewhere during the conversation we will ask about their experience working with construction company contractors and most of the "Virtual Bookkeepers" relate stories to demonstrate how the "stupid contractors" they worked for went "bankrupt". I suspect part of it was due to the actions to the virtual bookkeeper.
Newbie virtual bookkeepers work from home and happily give out their home address until they get a few angry contractors stopping by to express dissatisfaction about the condition of their QuickBooks Contractors financial reports anytime of the day or night. After a while they get a P.O. Box or a "Virtual Office" or the economy picks up and they get hired by a desperate contractor.
At the extreme end is the super-duper bargain basement, lower than low priced "virtual bookkeepers" working overseas in hot, steamy, loud and unfriendly environment with little or no skill in bookkeeping or accounting let alone construction accounting which is a whole different skill set.
The worst thing a contractor can do is give a virtual bookkeeper remote access to their desktop computers, servers or other web enabled devices to have free unrestricted access to your company software and financial documents. See Bookkeeper Theft And Ways To Avoid It
The virtual bookkeeper can sign onto your company’s secure network from their home computer and accesses any documents just as they would if logged onto an on-site company computer and in many cases introduce viruses and wipe out many years' worth of work in QuickBooks and other sensitive data.
Outsourced Contractor Bookkeeping Services Providers
On the other side are the Outsourced Contractor Bookkeeping Services Providers like us. We work in a real office building with public access and normal business hours. We hire professional construction accountants and bookkeepers and have a comprehensive Construction Accounting System.
Outsourced Contractor Bookkeeping Services like ours do not rely on in-house servers; or your servers, instead we contract with an Intuit Approved Commercial Hosting company. What that means is Intuit the parent company of QuickBooks has set high standards and rigid requirements for any company wanting to host QuickBooks files. This gives contractors a layer of protection not available in privately held servers because everything is backed up and QuickBooks for Contractors software patches are installed automatically.
Very early in our search for a place to host, store, backup and maintain our own QuickBooks client files we "test drove" a lot of QuickBooks hosting providers before Intuit put their commercial Hosting Program in place and found most of them were offended when we asked detailed questions regarding safety, security and QuickBooks for Contractor backup procedures. Many of them would get frustrated with our questions, hang up the phone, and remove our access.
We have since found what we consider to be the best of the best Intuit Commercial Hosting Provider and we have our own private server. It is not cheap; however, quality is like oats...fresh clean oats cost more than oats that have been through the horse and we know What Ten Minutes Waste Costs.
Outsourced Contractor Bookkeeping Services have more than one person in the office so you do not have all your eggs in one basket. There are processes in place for checking and verifying the work. When a construction bookkeeper gets, take a vacation, get distracted, get overloaded with clients or simply passes away there is someone else to fill in because everyone is cross trained on everyone else's job wherever possible.
Work flow processes and job descriptions are documented in operations manuals so that when a new hire joins the firm they learn from videos, manuals and audio recordings. Not the old worn out method of following someone around and learning by watching. This means you get what you expect and read about in our Welcome Manual, very predictable, no surprises.
Qualified Outsourced Contractor Bookkeeping Services have specialists and for internal support for staff to talk with and get questions answered. We also provide continuing education. In most cases our staff ten years of experience really is ten years' experience.
Reduced Employee Costs
Both the virtual bookkeeper and Outsourced Contractor Bookkeeping Services may be appealing to a contractor because of the cost savings and flexibility associated with this arrangement. Neither one require office space, supplies, insurance, benefits or employment taxes which is a huge savings for the contractor. See What It Really Costs To Have A Bookkeeper In Your Office.
Both the virtual bookkeeper and Outsourced Contractor Bookkeeping Services offer flexible availability and can work as much or as little or the contractor needs; this can be especially beneficial for small contractors that do not need a full-time on-site bookkeeper or whose financial services needs fluctuate.
Save Yourself Some Grief
If you think you cannot afford Outsourced Contractor Bookkeeping Services you may be right. The question is can you afford not too? Many contractors have talked to us and felt that hiring a virtual bookkeeper would save money.
In the end they found that between having to explain how construction works, overpaying taxes, fines and penalties and having to pay extremely high interest on loans they contacted us and we welcomed them with open arms and got their situation back on track. Click on the button below to see for yourself
For Construction Company Owners who do not need the full power of QuickBooks for contractors and want 24/7 online access we offer Xero Accounting Online and we have custom setup for construction companies. Click Here For More.
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About The Author:
Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist and Bill.Com Certified Guru. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and Xero accountants to the benefit of all of the construction contractors he serves across the USA. Visit http://www.fasteasyaccounting.com/randal-dehart/ to learn more.
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Check out our Contractor Success Map Podcast on iTunes and Follow Randal on Google+Follow Randal on Google+