Online Bookkeeping - How?

[JRL]

Hello All,

Long story short, my wife goes to school in the Caribbean and I'd like to join her without giving up an income entirely.

I'm an accountant and am interested in setting up an online bookkeeping company. As entrepreneurs, would you at all be hesitant in dealing with an entirely online-based firm? Documents & file transfers would clearly need to be all electronic, as would essentially all communication.

My idea is to be the "finance & accounting guy" for small businesses, operate as a partner and be on call through e-mail at all times. I'd do this while charging a fixed monthly fee - say, $99 - and offer complete bookkeeping services, monthly financial statement preparation & analysis, tax planning, etc. Questions:

A) Thoughts on the idea at-large
B) Feasibility of everything being online & electronic, with the real possibility of never actually meeting the client in person
C) Ideas for resources of online assistants, virtual offices, document transfer, etc.

Really, truly, thanks very much in advance.

Jack

[dhkosta]

Accounting is a very important aspect of a business where things can and do go wrong, and while an online accounting firm has more appeal to those interested in mobility, I think you'll have a difficult time appealing to most businesses, small and large. Also, that sort of thing would require a tremendous amount of initial capital, and if you're not to the point where you can throw half a million dollars on the ground, light it on fire, watch it burn, and say, "That's kind of cool," you should probably stick to safer ideas with less initial capital. And it's just my opinion, but being on call at all times sounds like a headache. Accounting problems that need resolution at odd hours of the night or morning are exceedingly rare. The flat monthly fee will screw you too, come January. Financial statement/tax season is hell, and hell means you need a lot more money to get all the work done, let alone be happy, if money will even do the trick.

Life's too short for what you're doing right now. If you love your wife, put your two or four weeks in tomorrow and book a one-way flight to her location. Open as many high-limit credit cards as you can while you still have provable income, and start up a well-researched business of your choosing once you're there. Even if you amass a monstrous pile of debt and pay it off doing manual labor in Cuba, you'll be happy with your decision. Take what you want now, do your best to responsibly finance it while keeping your family and own business in the highest priority, and don't fear the potential negative consequences. They don't hold a candle to loneliness and celibacy.

By the way, I'm scheduled to graduate with a BBA in accounting in December of this year, and I have no intention of working as an accountant for any extended period of time. Even now, I'm on the verge of canceling my last five classes.

[Sven]

Well, there are two things at play here:

1 storage and applications etc on the internet
2 knowing a paerson needs to be available for advide and knowledge

I did a search for online bookkeeping and only found this one that seems international:
http://www.twinfield.com/ but I think we have at least 4 companies here in holland that offer online bookkeeping.

But the online part is just the software which is very complete, you still need advice right?

That may be a very good niche if you set yourself up as a traveling accountant! But you probably can't do it for all travelers, you'd need to focus on travelers from area's you know. I'd say, go for it!

[JRL]

Also, that sort of thing would require a tremendous amount of initial capital, and if you're not to the point where you can throw half a million dollars on the ground, light it on fire, watch it burn, and say, "That's kind of cool," you should probably stick to safer ideas with less initial capital.

I would hardly need any initial capital at all. All I'd really need is an e-mail address. I have the accounting software that I use personally already. What else would I need in the way of capital? This seems, to me, like one of the lowest-risk, easiest start-ups out there.

And it's just my opinion, but being on call at all times sounds like a headache. Accounting problems that need resolution at odd hours of the night or morning are exceedingly rare. The flat monthly fee will screw you too, come January. Financial statement/tax season is hell, and hell means you need a lot more money to get all the work done, let alone be happy, if money will even do the trick.

Agreed, the potential of the business while I'd be only a single individual is pretty small - but I also don't exactly NEED that much income while living in Grenada. I'd only take on about 5 - 10 clients. Also, I wouldn't be doing their taxes, what I'd be providing is clean financials which makes it easier for their hometown accountant to file for them. This would strictly be bookkeeping.

[Sven]

If it is only about bookkeeping, what is your added value to the customer? Seems like a lot of hassle for your client for a service that is incomplete...

I want my accountant to do the bookkeeping and I can give him the reciepts and invoices and bank statements. No traveler could give em to you. Or am I missing the semantics of "bookkeeping"?

[JRL]

Sven,

Thanks a lot for your responses. I'm not looking to cater to travellers specifically, not at all. What I'm looking at doing is offering bookkeeping services for small businesses, the one difference with me is that it'd be completely online-based. Even that isn't something that I'm claiming to be my "competitive advantage" - it's just a reality of my life's situation should I carry out the move to be with my wife in Grenada.

By "bookkeeping", I basically mean maintaining a balance sheet, income statement, and cash flow statement. Let them know how their business is doing. The biggest concern that I have is getting over the reality that I'd probably need to rely on the CLIENT to get me the papers (invoices, etc.), and it wouldn't be fun to have to chase them down all the time. Maybe they would also find that to be too much work. I don't know.

[sadu]

I use Xero.com for my accounting / bookkeeping and pay an advisor to answer my questions. This works well.

I don't think I could ever be bothered with scanning and emailing paper receipts to someone - sounds like hard work.

I would suggest playing down the fact you are in another country - if you must accept receipts from clients so you can enter / handle them, get a local PO Box and have the mail redirected to your remote location. Working remotely is fine, but clients hate the idea of it so let them think they are dealing with someone locally and life will be easier.

[Sven]

For me it would be a very big breach of trust if I found out my accountant is not where I expect him to be.

[boxmanboxman]

You are obviously unhappy being an accountant and would much rather live with your wife in paradise. However there is an important piece of advice you must constantly remind yourself of, just because you started something does not mean you should finish it.

My advice to you is to drop the accounting business altogether because it is the primary source of your unhappiness and pursue a different field of interest in paradise.

[Merlin]

Hi Jack,
What you're talking about sounds fantastic to me. I'm really surprised by what dhkosta and boxmanboxman wrote - because I didn't read anything like that in your post.

Questions:
Do you enjoy what you do?
Would you be able to focus, even living in paradise, even if the beach is right out your window? Do you love what you do that much?

If yes, then you are offering a service I've been looking for. I don't care where my accountant is, but here's what I DO care about:
1. Trust - I would be giving access to very sensitive websites, financial information, bank accounts, etc. At a minimum, I would need to call verifiable references to be able to trust you with this information. At best, I would want to meet you in person and get a feel for your operation. Not great for someone who wants to escape to the Caribbean.
2. Your experience and knowledge. I own a Wyoming corporation, with a Washington State mailing address and official personal residency in WA, yet I live in California. Do you have the experience to help me avoid paying income taxes in California LEGALLY, and fulfilling the intricacies of state-state taxes/requirements?

If you can satisfactorily answer the above, I would gladly pay for your service. I am already completely paperless, so email/internet is not a problem.

Tools:
- I strongly recommend (and personally use) the Scansnap S1500M + Adobe Acrobat + Electronic filing system/software of your choice. In my opinion, this is the ONLY viable personal paperless solution. See great blog here: http://www.documentsnap.com/
- Quickbooks web or QB remote access
- I strongly DON'T recommend trying to build your site into an accounting software. Way too much work. Try out a multitude of systems, adopt the best one, and offer that as value added to your package. I have never seen xero.com, but after seeing it I'm impressed. Maybe worth looking into.

Hope this helps, and if you come up with some 'yes's' from what I ask above, I may be interested in hiring you. Cheers

[sadu]

Xero is great. It's made by New Zealanders but as I understand it's designed to work for international businesses as well.

The beauty of online bookkeeping is that they handle all the backups and updates for you, and your accountant can login whenever they want - none of this nonsense with emailing them a backup or report printouts like with the offline systems.

Xero has really done their homework in regards to putting the thing together - very easy to get started with. I definitely recommend having a look if you are looking at online bookkeeping.

I'm not affiliated with Xero in any way - just a customer.

[JRL]

Hi Jack,
What you're talking about sounds fantastic to me. I'm really surprised by what dhkosta and boxmanboxman wrote - because I didn't read anything like that in your post.

Yes!

Very refreshing to hear. Love your enthusiasm and I also agree that I'm not really sure where either of those two were going (especially boxman).

Questions:
Do you enjoy what you do?
Would you be able to focus, even living in paradise, even if the beach is right out your window? Do you love what you do that much?

I do enjoy what I do. I'm currently working for a major railroad in the Corporate Reporting department, and our job is essentially to put together the financials, the notes to the financials, and the annual reports to shareholders. What I'd love even more is helping small businesses succeed. I truly believe that an engaged accountant, like me, is very important in a business' success. I would love to be thought-of as a go-to guy for small business, someone on call for investment decisions, analysis, whatever.

And my wife's a medical student, so her face is in a textbook for about 20 hours/day. I would definitely have plenty of time down there and wouldn't lose focus.

1. Trust - I would be giving access to very sensitive websites, financial information, bank accounts, etc. At a minimum, I would need to call verifiable references to be able to trust you with this information. At best, I would want to meet you in person and get a feel for your operation. Not great for someone who wants to escape to the Caribbean.

Reasonable. I'll only actually be in Grenada until May of 2010, where we'll then be moving to New York. My concern, as a Canadian citizen, is the ability to find work down there, hence my idea to be an online bookkeeper.

2. Your experience and knowledge. I own a Wyoming corporation, with a Washington State mailing address and official personal residency in WA, yet I live in California. Do you have the experience to help me avoid paying income taxes in California LEGALLY, and fulfilling the intricacies of state-state taxes/requirements?

It's all based on one concept; residency. Not too difficult. Would need to know more in-depth of where you spent your time for the fiscal year, but it's all based on residency. For your corporation, it's where the "mind and management" (ie, you) reside. A thorough discussion is all we'd need.

Tools:
- I strongly recommend (and personally use) the Scansnap S1500M + Adobe Acrobat + Electronic filing system/software of your choice. In my opinion, this is the ONLY viable personal paperless solution. See great blog here: http://www.documentsnap.com/

THANK YOU! Exactly the type of recommendation that I was looking for.

Really appreciate the response, Merlin. Thank you.

[Chris H.]

Hi Jack,

I have been using a virtual bookkeeping company for the past 4 months, before this my virtual assistant did my bookkeeping for 3 months. I use this service- www.virtualbookkeeping.ca

Monica is based in Canada and has a team of employees helping people around the world. It's a fantastic service.

They pretty much do everything for me--pay bills, reconcile accounts, sales tax, etc. I have a cpa who handles my tax stuff and I do my own billing right now.

They charge $35 per hour which I think is reasonable for the specialized service.

Most receipts and invoices are emailed to them. I also use EarthClassMail.com which turns my postal mail into pdf's I forward to my bookkeeper. Every couple of weeks I also mail them some invoices I have. It's a very simple process.

I'm sure you could do something similar.

Hope that helps.

Chris H.

[JRL]

Hi Chris,

That helped tremendously. Thanks very much.

J

[Dantplayer]

Hey,

Good luck with that. Even if you only served businesses in one country (and expanded from there) you could stay busy for quite a while.

I love how everyone shot down your idea initially. Clearly they think it's a good idea, but don't have the guts to admit it.

If I was in your shoes I'd whip up a website that *looks* complete and see you could get some hypothetical customers to buy your services off of forums.

Post the "fake" site on the Warrior forums and see if anything comes of it. If you can get a few fake sales (reread 4HWW if you're not following), then you'll have a green light to keep doing more research into the topic.

Just don't make the mistake that 99% of everyone makes.... take forever to roll our your site. Do it fast.

[brucefenton]

simplest path is to run it the same way as you would in the States -- people become clients all the time of accountants online who are local and never even meet them - you can do 99% of what you would locally if designed right

[padma]

http://outright.com

[Merlin]

Just checked out Outright.com. Blech. Signed up, entered some data, it's far, far from being a finished product. Doesn't even have a help page.

Xero.com: Awesome, really nice design, well though through.

QB Online: Another blech ...basically a online copy of the mind-numbingly confusing and life-sucking quickbooks application.

After looking through these options, I decided to go with Chris's bookkeeper. I am just starting out with her, but she is a godsend - why pay $20-$50/month for an online solution, when that can go towards someone who does all this:
- Goes to my shopping cart, credit card, paypal, google checkout, merchant account, and bank accounts, downloads all the data, and inputs it into excel.
- Takes scanned receipts for expenses and inputs them.
- Sends me reports on a monthly basis (will get more frequent as business picks up)
- Gives me the freedom to NEVER open quickbooks, enter data, or have to learn a new system... instead any reports, etc. that I need are a quick email/phone call away.

NOW - I am PM'ing Jack (JRL) because I want a virtual CPA...

[Every Day Is Saturday]

Hi Jack,
My company has a virtual accounting firm that handles all of our bookkeeping. On a busy month we have 2500+ transactions run through our online merchant account - Powerpay via Infusionsoft.

My accounting firm logs into our Infusionsoft account, retrieves the information, reconciles with Powerpay & my bank, then sends me the financials at the end of each month.

What your describing sounds not only possible but probable if you have the passion for virtual accounting/bookkeeping.

Take Care,

Sam

[mtnchang]

I'm looking for someone to do exactly what you're offering, but full-suite (taking care of taxes as well). I don't mind scanning, because I hate paper filing and would be doing it anyways. I notice this thread is a bit old so I hope you're well on your way and happy with it!