10 years ago, even 5 years ago, remote accounting was not a viable option for businesses because of the perceived belief was that it couldn't be done. That was, until COVID hit and forced businesses to work remotely. Today, remote accounting is taking off because businesses are realizing the benefits of having a remote accounting department.
Back in the day, accountants absolutely needed to be physically located at the business.
Why? Because everything had paper backup and information flowed through paper. As time went on, the introduction to email and file servers, allowed us to push information to each other at light speed. But still, accountants were to be in their cubicle to be able to...that's right, no good answer.
In the accounting profession, we work with information or actions that have already happened. Therefore, our work flow needs to be done on a timely basis, but is outside of the normal business activities which means the work can be managed remotely.
Online technology is the biggest reason that remote accounting works for businesses. There are so many technologies now that make our accounting work very efficient. The key is using the right combination of technology to set up the accounting processes. All of this is done online with the only need being a computer.
Backup to accounting transactions used to be a main reason why people needed to be in the office. Again, this was due to paper changing hands. This obviously went away a long time ago, and slowly but surely, we all started to realize that an email with an attachment could be viewed and saved electronically instead of walking down the hall to find Mary who was supposed to hand over last week's revenue reconciliation. Problem is, she isn't there and I just wasted 5 minutes trying to hunt her down! With electronic communication, we can effectively manage our time because we aren't burning minutes chasing information.
What about meetings? First of all, 50% of meetings are unneeded as they tend to burn time by looking busy with a table full of donuts. But for those meetings that are needed, Zoom, Google Meet, etc., delivers an even better experience as we can share screens and be able to communicate information very effectively using these mediums. Imagine all the money saved by companies because they aren't flying people all over the place to attend physical meetings! Just click a button and we are together.
Point being, the entire job of an accountant can be done electronically and, if the company chooses to employ remote accountants, they will find that their costs go down, and the overall value of the work goes up.
How can remote accounting deliver on cost savings and increase the value of work?
Speaking from several years of experience now, the business no longer needs to have a
physical location for the accounting department, which takes down those overhead costs. Secondly, Fractional Accounting will save money as the business is no longer overpaying accountants to sit around for half the month while they wait for month end close. Therefore, the costs associated with that inefficient labor, goes away.
The value of the accounting work, as long as you have a good remote accountant, tends to go up. A big reason for this is the health of that employee or contractor.
Remote work, as many are finding out in this post-pandemic world, creates a much more balanced work life situation. Especially in accounting where we are taking data that has already happened, and running it through our processes. For example, I can work on a Saturday morning because I am not tied to what is currently happening at the business. This frees up the time of having to wait for information from people (which is another reason why accounting departments are inefficient), and allows me to complete the accounting work way more efficiently because I work as the information comes in. It's like having an "Just In Time" Inventory System, that rids all of the inefficiencies out of the process. I simply waited just long enough for all of the information to be complete before moving on to the next accounting process. The moral of the story is that I can complete all the necessary accounting work in 25% to 50% of the original time. How does that affect the value? Because the employee or contractor is not wasting hours of their life, every month, in inefficient processes. The work gets done minus rework, which raises the value of the work. Not to mention the work life balance that the accountant gets to realize.
So, for all of you out there that have physical accounting departments and want to cut costs, remote accounting could save you a hefty amount of money on a yearly basis. Think about it, if we can bring the efficiency rate to 25-50% of what it was, what kind of dollars would be saved annually?
At Blue Collar CFO, we make a remote accounting department a reality. The first step is to analyze the business to understand the work load. From there, the plan would be developed to "right size" the accounting department with an end result of month end accounting closes and a financial package that gives you the exact information that you need to drive your business further.
Gone are the days of, "Well, we have always done it this way", in other words, a lot of wasted money!
Blue Collar CFO