Why You Shouldn’t Hire a VA to Do Your Bookkeeping

29 April, 2021
Meryl Johnston

Meryl Johnston

4 minutes
computer on desk

Delegating is an essential skill for any eCommerce business owner to master. However, you need to make sure that you are delegating the right tasks to the right people on your team. 

Unless you can find a unicorn, bookkeeping is one task that you should leave to a professional bookkeeper instead of trying to train your general virtual assistant to handle these duties. 

In this article, we will examine the difference between an administrative virtual assistant and a bookkeeper. We’ll also look at what could go wrong when you hire the former over the latter.

What are the key differences between a virtual assistant and a bookkeeper? 

Let’s be clear – VAs and bookkeepers- are not one in the same. 

An administrative virtual assistant, as the title implies, is a contractor who works remotely. They typically complete general office management tasks ranging from appointment setting to making travel arrangements. 

Meanwhile, a bookkeeper tracks and manages the financial transactions of a business. It’s akin to an administrative assistant, but their key focus is managing the financial day-to-day. These duties include keeping accurate records, reconciling bank accounts and running reports. 

Good bookkeepers typically have a degree in finance , accounting or booking and/or several certifications. If they don’t carry the traditional credentials, then they have a lot of real-world experience. Administrative virtual assistants, on the other hand, are not specialized in finance nor do they necessarily have financial experience. 

What can go wrong when your VA does your books 

1. Inaccurate chart of accounts 

This is the kiss of death for an eCommerce company, as it’s a culmination of all of the financial records of all aspects of your operation. You’ll typically also want somebody specialized in both eCommerce and your specific industry, and that’s hard to come by when you’re searching for a VA without specified financial knowledge. 

When books are kept inaccurately, you can never really have an accurate pulse on the financial health of your business. For example, a cash flow forecast stops having any real meaning so you can never really know which levers to pull in terms of marketing, inventory, payroll, and more. 

2. Extra work at tax time

Hiring the wrong person for your bookkeeping is especially expensive and time consuming at tax time. When you’re under the gun trying to prepare financial reports for taxes, you open yourself to more room for error. This can further complicate an already frustrating situation.

For example, those conducting bookkeeping typically have their own system for tracking accounts and transactions. If things go wrong and you need to take over, not only do you need to figure out their own system, you’ll have to untangle reams of financial information in order to prepare the appropriate tax documents. 

3. Fines or late fees at tax time 

If your taxes are done incorrectly or submitted late, you can open yourself to fines and late fees. Staying on top of state, local and federal texas is an especially frustrating task in the ecommerce space, so it’s important to find somebody who really knows what they are doing.

Collecting sales tax, reporting and payroll/contractor expenses are the three main areas that ecommerce companies must master to steer clear of fees and fines. Even if you choose to automate sales tax, for example, you still need to know when your sales tax reporting and payments are due and how to carry out this process properly. 

4. Potential fraud

Not being careful about who you hire to do your books opens you up to nefarious contractors who may take advantage of your financial information and steal from the company. Bank statement reconciliation is one way to protect yourself; having somebody you trust to carry out the bookkeeping is the other. 

When a typical business loses 5% of its revenue to fraud, having this happen to you becomes even less far-fetched. Be sure that any purchases made by your bookkeeper require a second signature and that at least one other person is approving invoices before they are paid. The person reconciling the bank transactions shouldn’t be the same person entering bills and creating invoices. Unexpected spikes in expenses or asset purchases are another red flag that something may be amiss with the bookkeeper. 

5. Potential lawbreaking

Depending on the industry, country and task, certain certifications are required to do business. For example, if your business answers to any regulatory bodies or is storing any sensitive financial or health information, you will want to be extremely careful about who you hire as a bookkeeper and ensure they have the proper credentials if required.

Bookkeepers regardless of credentials are held to a code of ethics and standard reporting procedures. Straying from these puts your business in danger of breaking the law and opens you up to lawsuits from investors, employees and more. It’s extremely important to find somebody who knows what they’re doing, and an administrative VA typically isn’t going to cut it. 

6. Lost time

Hiring and training an administrative VA to keep your books requires a lot more time than if you hired a bookkeeper. Additionally, there will be untold amounts of hours lost to explain and correct things that go wrong. Remember, the idea of outsourcing is to make your life easier, not more difficult.

Outsourcing typically doesn’t happen well unless you’re using a specialist, especially in the financial world. Unless you’re extremely lucky, it’s very rare to come across a ‘jack of all trades’ type who isn’t specialized in bookkeeping but who can just jump on your team and learn as they go. And even then, it still will take longer to onboard this person and they still may get the big stuff wrong. 

From taxes and penalties to opening yourself to lawsuits, so much can go wrong when you hire a VA to do your bookkeeping. While you may be trying to increase efficiencies by having a generalist handle bookkeeping along with other tasks, in the end it usually causes you even more time, frustration and inefficiencies. 

Posted By

Meryl Johnston

Meryl Johnston

Meryl is a Chartered Accountant, entrepreneur, and surfer! The Bean Ninjas mission: Creating freedom for entrepreneurs through stress-free business finances.

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