Virtual Bookkeeping Services: The Complete Guide to Hiring an Online Bookkeeper for Your Small Business

Hiring a virtual bookkeeper is one of the most practical financial decisions a small business owner can make. Instead of managing a full-time employee or spending evenings reconciling receipts, you get professional bookkeeping expertise delivered remotely — usually at 30–50% less than in-house staff.

But the market for virtual bookkeeping services has become crowded. There are full-service firms, freelance bookkeepers, bookkeeping virtual assistants, QuickBooks specialists, and offshore providers — each with different pricing models, skill levels, and service scopes. Choosing the wrong one wastes money and creates bigger problems than it solves.

This guide breaks down how virtual bookkeeping actually works, what it costs, which model fits which type of business, and how to evaluate providers — so you can make a confident, informed decision.

What Is a Virtual Bookkeeper?

The "virtual" part simply means remote. The bookkeeping itself is identical to what an in-office professional would do. The key enabler is cloud accounting software — platforms like QuickBooks Online, Xero, and FreshBooks allow both you and your bookkeeper to access the same financial data in real time, from anywhere.

Virtual bookkeeping has grown rapidly since 2020, and by 2026 it has become the default arrangement for the majority of small businesses with fewer than 50 employees. The combination of reliable cloud software, widespread video conferencing, and cost savings over in-house hiring makes it the practical choice for most businesses that don't need a bookkeeper on-site.

How Virtual Bookkeeping Services Work

The typical engagement follows a predictable workflow, regardless of whether you hire a firm, a freelancer, or a bookkeeping virtual assistant.

Initial Setup

• You grant secure access to your cloud accounting platform (QuickBooks Online, Xero, FreshBooks, or Wave).
• Your bookkeeper reviews your chart of accounts, existing records, and any backlog.
• You agree on communication frequency, reporting schedule, and scope of services.
• If there's a backlog or messy books, a catch-up project is completed first (usually billed separately).

Ongoing Monthly Process

• You upload or share documents — receipts, invoices, bank statements — via email, cloud storage, or a client portal.
• Your virtual bookkeeper records transactions, categorizes expenses, and reconciles bank and credit card accounts.
• Accounts payable (bills) and accounts receivable (invoices) are processed on your schedule.
• Monthly financial statements — profit and loss, balance sheet, cash flow — are delivered by an agreed date.
• Regular check-in calls (weekly, biweekly, or monthly) address questions and planning.

Year-End and Tax Season

• Your bookkeeper prepares year-end financials and organizes documents for your CPA or tax preparer.
• Some virtual bookkeeping services include tax preparation; others hand off clean records to your accountant.
• 1099 preparation, W-2 coordination, and sales tax filings may be included depending on your plan.

Three Models of Virtual Bookkeeping: Which One Fits Your Business?

Not all virtual bookkeeping is the same. The three main service models differ significantly in cost, quality, and how much management they require from you.

Model 1: Virtual Bookkeeping Companies

Full-service firms that employ teams of bookkeepers and assign one (or a team) to your account. Examples include Bench, Bookkeeper360, Xendoo, and QuickBooks Live.

Best for: Small businesses wanting a hands-off, managed service with predictable monthly pricing and don't mind less personal interaction.

Model 2: Freelance Virtual Bookkeepers

Independent professionals found through platforms like Upwork, LinkedIn, referrals from your CPA, or the QuickBooks ProAdvisor directory.

Best for: Businesses that value a direct relationship and want a dedicated bookkeeper who understands their specific operations.

Model 3: Bookkeeping Virtual Assistants

Professionals who combine basic bookkeeping with general administrative support — scheduling, email management, invoicing, light data entry. Often sourced through VA agencies or offshore staffing firms.

Best for: Solopreneurs and micro-businesses with fewer than 30 transactions per month and simple, straightforward finances.

How Much Do Virtual Bookkeeping Services Cost?

What Drives the Price Up?

• Transaction volume: A business processing 500 transactions per month costs significantly more than one processing 50.
• Complexity: Multi-entity structures, inventory management, job costing, and international transactions add complexity and cost.
• Add-on services: Payroll processing, tax preparation, accounts receivable management, and CFO advisory each increase monthly fees.
• Catch-up bookkeeping: If your books are months or years behind, expect a one-time cleanup fee of $500–$5,000+ depending on the backlog.
• Industry specialization: Bookkeepers with niche expertise (construction, healthcare, e-commerce) typically charge 20–40% more.

The Real Cost of "Cheap" Bookkeeping

Businesses that choose the cheapest option frequently end up spending more. Errors in transaction categorization lead to incorrect tax filings. Missed deadlines result in penalties. Incomplete records create expensive cleanup projects when you eventually hire a qualified professional. A reliable virtual bookkeeper at $400–$800 per month almost always costs less over a 12-month period than a $200 per month service that requires corrections.

QuickBooks Virtual Assistant: When You Need Platform-Specific Expertise

QuickBooks Online dominates US small business accounting, used by roughly 70% of small businesses and preferred by the majority of CPAs. If your business runs on QuickBooks, hiring a bookkeeper who specializes in the platform delivers specific advantages that a general bookkeeper may not.

What a QuickBooks Virtual Assistant Handles

• Initial QuickBooks setup and chart of accounts customization
• Bank feeds configuration and automated transaction rules
• Daily or weekly transaction categorization and reconciliation
• Invoice creation and accounts receivable tracking
• Bill entry and accounts payable management
• Custom report building (P&L by class, project profitability, etc.)
• Integration setup with payment processors, e-commerce platforms, and payroll
• QuickBooks Online migration from Desktop or other platforms

QuickBooks Live vs. Independent QuickBooks Virtual Assistants

When to Choose a QuickBooks Specialist vs. a General Bookkeeper

Choose a QuickBooks virtual assistant if: You're committed to QuickBooks, want to optimize features you're underutilizing, need help migrating from another platform, or want someone who can set up advanced automations and integrations.

Choose a general bookkeeper if: You might switch platforms in the future, need broader financial management, want advisory input on financial strategy, or prefer a bookkeeper who focuses on your business outcomes rather than software features.

Best Virtual Bookkeeping for Small Business: Choosing by Stage and Size

The right virtual bookkeeping service depends primarily on where your business is in its growth trajectory. Here's a practical framework.

Solopreneurs and Freelancers (Under $100K Revenue)

At this stage, your finances are likely simple: a business bank account, a handful of expense categories, and straightforward invoicing. A bookkeeping virtual assistant at $200–$400 per month or a basic virtual bookkeeping company plan handles this comfortably. Alternatively, many solopreneurs handle their own bookkeeping using Wave (free) or QuickBooks Simple Start ($30/month) and hire a bookkeeper only for quarterly cleanup and year-end preparation.

Worth considering: QuickBooks Live at its basic tier, or a part-time freelance bookkeeper for 2–4 hours per month.

Small Businesses ($100K–$500K Revenue)

Transaction volume increases, expense categories multiply, and you may have contractors or employees to manage. This is where virtual bookkeeping services provide the most dramatic value — the work is too much to handle yourself efficiently, but not enough to justify a full-time hire. A dedicated freelance bookkeeper ($500–$900/month) or a mid-tier virtual bookkeeping company ($400–$700/month) fits well.

Worth considering: Bookkeeper360, Xendoo, or a certified QuickBooks ProAdvisor found through Intuit's directory.

Growing Businesses ($500K–$2M Revenue)

Complexity increases substantially. You may have inventory, multiple revenue streams, employees on payroll, and need regular financial reporting for decision-making or investors. A full-service virtual bookkeeping company ($800–$1,500/month) or a senior freelance bookkeeper with advisory capabilities provides the depth you need. Some businesses at this stage benefit from a fractional CFO in addition to bookkeeping.

Worth considering: Xendoo's Growth or Scale plans, Bookkeeper360's full-service packages, or a full-charge freelance bookkeeper with industry specialization.

Established Businesses ($2M+ Revenue)

At this level, consider whether an in-house bookkeeper or controller makes more sense. The ongoing complexity and volume of daily financial management often justifies a salaried employee ($45,000–$65,000/year) who is fully embedded in your operations. Virtual bookkeeping still works, but typically through a higher-end firm that provides controller-level support ($1,500–$3,000/month).

How to Evaluate a Virtual Bookkeeping Provider

The most expensive mistake in virtual bookkeeping isn't overpaying — it's hiring a provider who produces inaccurate books that require expensive corrections later. Here's what to assess before committing.

Must-Have Qualifications

• Certification: QuickBooks ProAdvisor, Xero Certified Advisor, or Certified Bookkeeper (CB) from AIPB at minimum.
• US tax knowledge: If you're a US business, your bookkeeper must understand US GAAP, sales tax requirements, 1099 reporting, and payroll tax basics — even if they're not doing your taxes.
• References: Ask for 2–3 client references you can actually contact. Legitimate providers are happy to share them.
• Insurance: Professional liability (E&O) insurance protects you if errors cause financial damage.

Red Flags to Watch For

• No willingness to offer a trial period or sample engagement
• Pricing that seems too good to be true (under $200/month for full-service bookkeeping)
• Poor English communication during initial conversations (if US-based service)
• No documented data security policies — your financial data must be protected
• Reluctance to share credentials or certification details
• Locked into proprietary software that prevents you from accessing your own data

Questions to Ask Before Hiring

• What accounting software do you work with? Do I own my data if we part ways?
• What happens when my primary bookkeeper is unavailable?
• How do you handle month-end close? What's the turnaround time for financial statements?
• Do you communicate with my CPA directly, or do I relay information?
• What's your process for handling errors or discrepancies?
• Can you show me a sample monthly report?

How Virtual Bookkeeping Needs Differ by Region

While virtual bookkeeping is inherently location-independent, tax rules and business norms vary significantly by region. Here's how geography affects your virtual bookkeeping decision.

• United States: Sales tax complexity varies dramatically by state — some states have no sales tax, while others (like California and New York) have layered state, county, and city rates. Your virtual bookkeeper needs to handle multi-state nexus if you sell across state lines. QuickBooks Online is the dominant platform, and most US CPAs prefer receiving books maintained in QBO.
• United Kingdom: VAT (Value Added Tax) compliance is a core bookkeeping requirement. Making Tax Digital (MTD) mandates quarterly digital submissions to HMRC. Xero has strong market share alongside QuickBooks and Sage. UK bookkeepers often hold AAT certification.
• Australia: BAS (Business Activity Statement) lodgment is required quarterly. Your bookkeeper needs to be a registered BAS Agent to legally lodge these with the ATO. Xero originated in the Australia/New Zealand market and has particularly strong adoption.
• India (offshore providers): Indian bookkeeping firms serve US, UK, and Australian businesses at significantly lower rates ($400–$800/month for full-time dedicated staff). The time zone difference enables overnight processing. The key risk is ensuring your offshore bookkeeper understands your country's specific tax requirements and accounting standards.
• Canada: GST/HST compliance, provincial sales tax variations, and T4/T5 reporting requirements mean your bookkeeper needs Canadian-specific expertise. Both QuickBooks Online and Xero have strong Canadian localization.

CRM for Bookkeeping Firms: Managing Clients at Scale

This section is relevant if you're a bookkeeping professional managing multiple clients rather than a business owner hiring a bookkeeper. As your client base grows beyond 10–15 accounts, spreadsheets and email become unmanageable. A dedicated CRM or practice management platform prevents missed deadlines, lost documents, and communication gaps.

Top CRM Platforms for Bookkeeping Firms

When You Need a CRM vs. When You Don't

You need a CRM if: You manage more than 10 recurring clients, miss deadlines or forget follow-ups, spend excessive time on document collection and client communication, want to standardize your onboarding and workflow, or plan to grow your practice.

You can skip a CRM if: You serve fewer than 10 clients, your workflow is simple and manageable with basic tools (Asana, Trello, Google Sheets), or you're a solo practitioner not planning to scale.

Choosing Between Accounting-Specific CRMs and General CRMs

General CRMs like HubSpot (free tier), Salesforce, or Monday.com can be adapted for bookkeeping firms, but they lack accounting-specific features: deadline tracking tied to tax calendars, document request automation, secure client portals, e-signature workflows, and direct integration with accounting platforms. For most bookkeeping firms, the time saved by an accounting-specific CRM justifies the higher per-user cost.

Common Mistakes When Hiring Virtual Bookkeeping Services

After years of businesses switching providers, cleaning up messy books, and dealing with the consequences of poor hiring decisions, these are the mistakes that cause the most damage.

• Choosing on price alone. The difference between a $250/month and a $500/month bookkeeper is rarely just "markup." Lower prices often mean less experienced staff, fewer quality checks, and higher error rates. Clean, accurate books at $500/month save you thousands in tax corrections and penalties.
• Not verifying data ownership. Some virtual bookkeeping companies maintain your books in proprietary systems. If you leave, you may not have easy access to your own financial data. Always confirm that your books are maintained in standard software (QuickBooks, Xero) that you own and control.
• Skipping the trial period. Reputable providers offer a 1–2 month trial or a catch-up project as a test engagement. If a provider insists on a 12-month contract with no trial, consider it a red flag.
• Assuming bookkeeping includes tax filing. Most virtual bookkeeping services prepare your books for tax time but don't file your taxes. You still need a CPA or tax preparer. Clarify what's included before signing.
• Not reviewing the work. Even with a great bookkeeper, you should review monthly financial statements. Understanding your P&L and cash flow isn't optional as a business owner — it's essential. A bookkeeper produces the reports; you need to read them.
• Hiring offshore without understanding the trade-offs. Offshore bookkeepers at $8–$15/hour are appealing, but communication barriers, limited understanding of US tax requirements, and time zone gaps can create more problems than they solve for complex businesses. Offshore works well for high-volume, routine transactions with clear processes. It's risky for complex, judgment-heavy bookkeeping.

Accounting Software Your Virtual Bookkeeper Should Know

The software your bookkeeper uses directly affects the quality of your financial data and how easily it integrates with tax preparation, payroll, and business intelligence tools.

Practical advice: Ask your CPA which platform they prefer before choosing your accounting software. Using the platform your CPA already works with reduces tax preparation fees and communication friction. For the vast majority of US small businesses, that means QuickBooks Online.

Frequently Asked Questions

What is a virtual bookkeeper?

A virtual bookkeeper is a professional who manages your business's financial records remotely using cloud-based accounting software. They perform the same functions as an in-house bookkeeper — recording transactions, reconciling accounts, managing payables and receivables, and generating financial reports — but work from their own location and communicate via video calls, email, and shared platforms.

How much do virtual bookkeeping services cost?

Virtual bookkeeping services typically cost \$200–\$800 per month for small businesses. Virtual bookkeeping companies charge $300–$1,500 per month depending on transaction volume and service scope. US freelance bookkeepers charge $25–$75 per hour. Bookkeeping virtual assistants range from $15–$40 per hour domestically, or $8–$20 per hour from offshore providers.

What is the best virtual bookkeeping service for small business?

It depends on your stage and needs. For hands-off managed service, Bookkeeper360 and Xendoo are strong options. For QuickBooks users wanting integrated support, QuickBooks Live is worth considering. For a personal, dedicated relationship, a certified freelance bookkeeper found through the QuickBooks ProAdvisor directory often delivers the best combination of quality and value.

What is a QuickBooks virtual assistant?

A QuickBooks virtual assistant is a remote bookkeeping professional who specializes in the QuickBooks platform. They handle setup, customization, transaction recording, reconciliation, report generation, and troubleshooting within QuickBooks Online or Desktop. Many hold the QuickBooks ProAdvisor certification, which is free through Intuit's training program.

Is a bookkeeping virtual assistant the same as a virtual bookkeeper?

Not exactly. A virtual bookkeeper is a dedicated bookkeeping professional focused entirely on financial recordkeeping. A bookkeeping virtual assistant combines basic bookkeeping tasks with general administrative support — email management, scheduling, data entry, and invoicing. VAs are typically less expensive but have shallower bookkeeping expertise. For businesses with complex finances, a dedicated bookkeeper is the safer choice.

How much does an online bookkeeper cost per hour?

In the US, online bookkeepers charge $25–$75 per hour depending on experience and specialization. Entry-level bookkeepers start around $25–$40/hour, mid-level professionals charge $40–$60/hour, and senior or specialized bookkeepers command $60–$100/hour. Monthly retainers ($300–$1,500) are more common than hourly billing for ongoing engagements.

What CRM do bookkeeping firms use?

The most popular CRM and practice management platforms for bookkeeping firms are TaxDome, Karbon, Financial Cents, and Canopy. These are purpose-built for accounting practices with features like deadline tracking, client portals, document requests, e-signatures, and workflow automation. For QuickBooks-centric practices, Method CRM offers the tightest QuickBooks integration.

Can I hire a virtual bookkeeper from another country?

Yes. Many US businesses hire virtual bookkeepers from India, the Philippines, and other countries at lower rates ($8–$20/hour). The key requirement is ensuring your offshore bookkeeper understands your country's tax rules, accounting standards, and reporting requirements. This model works well for high-volume routine transactions but carries more risk for complex, judgment-heavy bookkeeping that requires deep knowledge of local regulations.

Virtual Bookkeeping Recommendation Summary

Virtual bookkeeping works for the vast majority of small businesses. The key is matching the service model to your actual complexity level, verifying qualifications before hiring, and maintaining enough financial literacy to review the reports your bookkeeper produces. The right virtual bookkeeper doesn't just record your transactions — they give you the clarity to make better business decisions.