Virtual Accounting Services For Automotive Industry In 2024: An Overview

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10 min read
The automotive retail industry is riddled with a myriad of challenges like rising operating costs, squeezed margins, scalability issues, and limited technology innovation. If you are running a business and wish to join the league of frontrunners in the automotive industry , maintaining impeccable finances will serve the best of your interests. It is crucial to your business’s success. A well-oiled Chart of Accounts (COA) is probably the key to exemplary bookkeeping and tracking finances to make sound business strategies. All of these, while you stay compliant with government regulations. To achieve this, a virtual accounting service provider (automotive accounting specialists, bookkeepers, etc) can play a major role. It can invest countless hours in decrypting tax laws, and financial analyses, grasping the nuances of changing regulations, and economic trends while you breathe a sigh of relief!  This article takes a lengthy swipe at the automotive industry and its gradual and beneficial integration with virtual accounting services, among other things. The current global market for Automotive Manufacturing was valued at $2.9 trillion in 2022, and it is currently growing at a CAGR of 3.1% following several years of decline where the market dropped by 0.6% between 2017 and 2022. This represented a decline that was faster than the decline of the overall economy, which was hit by the Covid-19 pandemic. The industry is predicted to continue growing at a CAGR of 3.71% between 2020 to 2030 and will consist of 122.83 million units by the end of the decade, representing a significant leap from 2020’s 85.32 million units. Currently, the automotive manufacturing industry is ranked 1st out of all global manufacturing industries in terms of market size. For starters, the automotive manufacturing industry is the largest of all manufacturing industries by market size. In 2022, the global market for Automotive Manufacturing had a value of $2.9 trillion . After several years of bear-trap, where the automotive market shrank by 0.6% between 2017-2022, the market is now expanding at a 3.1% CAGR. The shrinkage was faster than the global economic downturn induced by the Covid pandemic. Now, the industry is expected to keep growing at a 3.71% CAGR in the 3rd decade of the 21st century. The production should hit 122.83 million units by the end of the decade, a stark increase from 85.32 million units (2020). The production process of automotive firms has always involved subcontractors. Outsourcing has been a prevalent strategy to reduce costs in the U.S. auto sector, just like in other industries. However, the extent and nature of outsourcing in the auto industry have evolved over the years, along with the employment relations and the interactions between suppliers and lead firms in the sector. If you consider The Big Three in the U.S. auto segment — General Motors (GM) , Fiat/Chrysler , and Ford, they used to directly employ thousands of unionized workers who were well-paid (in places like Flint, Michigan, and Detroit), have stopped doing so. They now employ much fewer workers and sustain large supplier networks in widely dispersed locations. These supplier networkers are an amalgamation of small firms (in comparison to large firms) that generate low-paying jobs, and are far less innovative. The goal of all outsourced finance and accounting services that cover the automotive industry is to enhance financial insights and catalyze back-office operations and platforms to enable faster and more flexible decision-making. A virtual accountant (or a team of virtual accountants) ensures the timely delivery of precise financial statements, streamlines the bookkeeping processes, and enforces compliance with GAAP accounting standards. By leveraging virtual accountants, a  business can better manage cash flow, bolster efficiencies in the overall process, help your team minimize costs, efficiently manage supply chains, and develop stronger relationships with vendors. An end-to-end solution by a virtual counting firm can provide a holistic view of the order-to-cash process, and enhance the overall performance of the reporting as well as collections. A financial model tool analyzes performance and project outcomes, ensuring precise financial projections that reflect a reliable trajectory of a company’s future finances and relevant operations. A virtual CFO can enable any business to comply with industry best practices while catalyzing strategic planning to optimize revenue and value creation. Also Read: The Virtual CFO Services & CFO Trends Shaping Up Finance A virtual accounting evaluation team focuses on the deployment of an effective, reliable model that boosts the efficiency for both your business and your team, along with all the stakeholders involved. Here are some primary responsibilities of an automotive accountant:
  • Regularly log daily financial transactions and accounts receivable data to conclude the posting process.
  • Handle bookkeeping tasks such as analyzing and maintaining data on financial statements, checking bank reconciliations, and much more.
  • Ensure that books match with bank statements and prepare all dealership accounting reports to be delivered at the end of the month.
  • Process accounts receivable/ accounts payable quickly and correctly.
  • Manage automotive group payrolls, so employees get paid on time.
  • Record auto dealership transactions accurately across all general ledgers.
You need to make sure that your candidate has all the qualities of a great virtual accountant if you want to hire one for your automotive firm. Besides having an academic degree in accounting, business management, and other affiliated fields, a virtual accountant should also possess a few essential traits. A virtual accountant must be tech-savvy. He/she should be adept at handling diverse accounting tools (QuickBooks, Tally ERP, Zoho Books, Marg ERP, etc.) and have the know-how to implement multiple accounting operations utilizing technology.   Apart from the essential accounting tools, the accountant should leverage other software to communicate, manage remote workflow, and share work. An accountant must be flexible to adapt to transformations in technology. Today's rapidly changing tech landscape can make today's tech look archaic tomorrow, and a virtual accountant must be ready to re-learn. An outstanding virtual accountant possesses a passion for embracing new technological advancements. A virtual accountant who is a team player coordinates with various departments, takes follow-ups, and shares the necessary course of action. If an accountant fails to share his progress promptly or harmonize with different financial branches, it can negatively influence the quality of work. Additionally, the communication gap leads to countless misinterpretations and slows the workflow somewhat.  During intense situations, a virtual accountant must think quickly and out of the box to pull the company together. Also, accountants have to achieve this feat very quickly to reduce damage. Thus, a competent virtual accountant who is a quick thinker adds immense value to any organization. A virtual accountant should be open to constructive feedback. He or she should not be rude or disrespectful to clients if they question their work. They should explain their point to the clients calmly, and virtual accountants should admit their mistakes gracefully if they are wrong anywhere. In short, a great virtual accountant never rejects fair criticism and even sees it as an opportunity to improve themselves.  Successful automotive corporations have an efficient financial and accounting process in place. When you are outsourcing automotive virtual accounting services, goals are achievable through innovative accounting collaborations and solutions. Here are some of the benefits: According to a study by the ITRC (Identity Theft Resource Center), there were 1,291 data breaches reported by September 2021. This was a mind-boggling 17% growth from the 1,108 data breaches that happened in 2020. Virtual accounting offers more data security as your accounting records and reports are backed up and protected by the virtual service agencies (and they are answerable to you). More often than not, they use cloud storage and cloud storage is secured, cheap, incurs less storage cost, and is easier to maintain. The financial data is securely stored in the data centers, which are immune to fire, flood, and other damages. All of the data is encrypted for protection, backed up hourly, and supervised by cybersecurity experts. Your company may need a scalable workforce as it grows. Whether you are expanding locally, regionally, or globally, your in-house employees may be unable to keep up with your growth goals. Also, during a recession, you might trim your accounting team. You can get access to dedicated staff and reliable backup resources at minimal cost by using virtual accounting and bookkeeping services. They can help you start quickly without having to worry about employment contracts or new infrastructure for new employees. You can get the service at your fingertips. You can hire talent from anywhere when you collaborate with a virtual accounting firm. You can find an accountant who knows the automotive industry segment you are in and the accounting practices that are applicable to your business. Also, virtual accounting service providers usually deploy a team of accounting experts, so in case you need more resources, they ensure that your needs are met. Virtual accountants have intricate ways of providing clients with regular and detailed reports based on financial datasets. They are also likely to inform you of any issues that need your attention without any delay. Moreover, virtual CPA firms can help you keep up with any changes in the rules and regulations that affect your business. You don't have to pay for digital accounting tools when you hire virtual assistants . They take care of the arrangements, and you can enjoy the benefits of modern accounting software. Another added advantage of using a reliable virtual assistant service is access to cloud storage ((as mentioned before). You can access your information anytime you need it, irrespective of where you are. It is quite common for an automotive business to deal with large sums of money. Thus, having all records in order is necessary. However, you do not have to be an accounting expert for that. Anyone not interested in dedicating much time to writing invoices or monitoring funds on lengthy spreadsheets can always opt for virtual accounting services. For instance, you can save time and money by working with virtual accounting professionals at Office Beacon. If you hire a virtual assistant with Office Beacon, be assured that they are adept at keeping records of your company’s expenditures and generating meticulous reports. Are you ready to kickstart the virtual hiring process? SPEAK WITH US with us today!