Excite Tax's answer for Utah owners: under 16 CFR Part 314 a tax preparer working online must keep a written information security plan; the books run on bank feeds and shared files.
Excite Tax's short version: the same bookkeeping, done from a distance. Transactions arrive through bank and card feeds, receipts and statements arrive as files, and the bookkeeper categorises, reconciles and reports without anyone carrying a shoebox anywhere. The IRS does not care where the work happens; the law asks for any recordkeeping system that clearly shows income and expenses.
A virtual bookkeeper's month: categorise every transaction, match every account to its statement, chase the receipts and questions that cannot be answered from the feed, and produce the month's profit and loss and balance sheet. The full cycle is below.
It can be, and the rules say what safe means. A tax preparer falls under the FTC Safeguards Rule, which requires multi-factor authentication for anyone accessing its systems and encryption in transit and at rest. Excite Tax's advice: ask any provider how it meets both before sending a single statement. The questions are below.
A cloud ledger, bank and card feeds into it, a receipt-capture app, and a secure way to swap files. No product is required by law: any system that clearly shows income and expenses is acceptable, and scanned records count if the storage meets Revenue Procedure 97-22. Excite Tax's category-by-category list is below.
Excite Tax's answer: the location matters less than three things you can check, which are who does the work, how the data is protected, and whether the books reconcile every month. A local office is useful if you want to hand over paper in person; otherwise a virtual bookkeeper in Utah, or anywhere else, does the same work from the same bank data. The comparison is below.
It is usually cheaper below full-time hours. An employee at the Utah median of $23.77 an hour also costs the employer 6.2% social security and 1.45% Medicare on top, and is paid for slow weeks. Excite Tax's worked example is below; an in-house hire wins when the work fills most of a week or needs someone on site.
In practice, none. All three names describe a bookkeeper who works in a cloud ledger from bank feeds and shared files instead of at your desk. Excite Tax's advice is to ignore the label and ask what the price covers, which accounts get reconciled, and how files are exchanged.
Excite Tax's view: it is the natural fit, because an online seller's records are already digital. The work is separating marketplace payouts into gross sales, fees and refunds so the books show gross income, deductions and credits rather than one net deposit. More in online sellers.
None of this needs a meeting in person. It does need you to answer the question list promptly; a month cannot close while a large deposit is still unexplained. The month-end steps are laid out in the month-end close checklist, and what a reconciliation is in what is a bank reconciliation.
What a bookkeeper does not do is sign your tax return. The books feed the return; the return is prepared and signed separately, which is the hand-off at the end of this page. If you are deciding whether you need one at all, see do I need a bookkeeper, and for monthly work as a service, monthly close.
The Federal Trade Commission's Safeguards Rule lists tax preparation firms among the businesses it covers, and each must keep a comprehensive information security program that is written. IRS Publication 4557 puts it plainly: tax return preparers must create and enact security plans to protect client data. Under that rule, the plan has to include, among other things:
A small practice gets some relief, but not on the parts that matter most to you. A practice holding data on fewer than five thousand consumers is excused from the written risk assessment, the testing schedule, the written incident response plan and the annual report. Encryption and multi-factor authentication are not on that list.
The candid answer, then: online bookkeeping is as safe as the provider's controls, and paper in a car or an unlocked filing cabinet is not automatically safer. Excite Tax's advice is to judge a provider on the questions below, not on whether it has an office.
Going paperless is allowed. Under Revenue Procedure 97-22, books kept in an electronic storage system that meets its requirements count as records under section 6001. The system needs controls against unauthorized changes or deletion, an index to find things, and legible reproductions.
Two points owners miss. First, using an outside provider for storage does not relieve you of the responsibility: the records are still yours to produce. Second, paper originals may be destroyed only once the system has been tested and procedures keep it compliant. Keep the digital copies for as long as the return can be examined, generally 3 years, 4 for employment tax records, 7 for a bad-debt or worthless-securities loss. What to keep is covered in what records the IRS requires and do I need to keep receipts.
The law names no product. It requires any recordkeeping system suited to your business that clearly shows your income and expenses, and the Safeguards Rule adds that each vendor holding client data must be capable of safeguarding it. Choosing among products is covered in bookkeeping software for a small business.
The bank-feed access, document portal and software Excite Tax works in are pending confirmation and will appear here, with a reviewed date, once confirmed.
A virtual and a local bookkeeper do the same work from the same bank data; the difference is whether paper changes hands in person. The real choice is between an outside service and an employee, and the employee's cost is easy to underestimate.
An in-house bookkeeper at the Utah median wage, 10 hours a week, before benefits (BLS OEWS, May 2025; IRS Publication 15)
| Cost | Per hour | Per year (520 hours) |
|---|---|---|
| Median wage | $23.77 | $12,360.40 |
| Employer social security and Medicare (6.2% + 1.45% = 7.65%) | $1.82 | $945.57 |
| Total before benefits (the median wage plus the employer's taxes) | $25.59 | $13,305.97 |
Add paid leave, software seats, a computer and your own time supervising, then compare the total with a service's monthly quote for the same work. Full figures for other hours are in how much a bookkeeper costs.
Virtual, local or in-house: what differs
| Question | Virtual or remote | Local office | In-house employee |
|---|---|---|---|
| Where the work happens | In a cloud ledger, from feeds and files | The same, plus in-person drop-off | At your business |
| How you pay | A monthly or per-job fee | A monthly or per-job fee | Wages, employer taxes and benefits |
| Cover for holidays and sick days | The provider's problem | The provider's problem | Yours |
| Paper handling | You scan or photograph | You can hand it over | On site |
| Best when | Records are mostly digital | You prefer paper and meetings | The work fills most of a week |
How to judge any provider, virtual or local, is in how to choose a bookkeeper.
Utah adds its own rule on top of the federal one. Under Utah Code § 13-44-201, anyone doing business in the state who keeps personal information must maintain reasonable procedures to prevent its unlawful use or disclosure, and must destroy records it no longer keeps by shredding, erasing or making the information indecipherable. That applies to your bookkeeper and to you: the paper statements you have scanned are exactly the records it has in mind.
For bookkeeping anywhere in the state, see online bookkeeping across Utah and the bookkeeping service.
An online store is the easiest business to keep books for remotely and the easiest to get wrong. Marketplaces and payment processors deposit a net payout, after fees, refunds and holds, so booking the deposit as sales understates both income and expenses. The books have to show gross income, deductions and credits, which means splitting each payout back into gross sales, fees, refunds and reserves, then reconciling the processor balance like a bank account.
Sales tax for online sellers depends on where buyers are and is covered separately; the bookkeeping side is in e-commerce bookkeeping.
Hand the books over when keeping them costs more hours than the business can spare, or when they stop agreeing with the bank.
Excite Tax keeps these books; the return they feed is reviewed and signed by a licensed CPA at TBD CPA LLC.
Ranked and explained on the sources page.