For a growth-focused startup business, management is often stretched to cover a variety of strategic and tactical tasks, to fill several key roles, and to create the foundation for your corporate vision. But the looming question is always, “What can we afford?” The answer often doesn’t include a finance team.
The truth is, most startups don’t need a full finance team – hiring a CFO, Controller, and Accountants too early can be a catastrophic burden to payroll. On top of that, the ad hoc needs of a startup are often sporadic and require a variety of financial specialties. Whether you’re shouldering the bookkeeping tasks yourself or utilizing a basic bookkeeping firm, you’re still working through complex financial decisions without experienced help.
Enter the Fractional Accounting Consulting Team. The concept of fractional accounting isn’t new. It’s mostly a customizable menu of outsourced accounting services offered by experienced finance & accounting professionals with flexible hours to match the needs and budget of your company. In his Built In Blog, “Why You Should Consider Hiring a Fractional CFO,” Paul Bianco, Founder & CEO at Graphite, makes a solid case for the cost-effectiveness and ROI of a fractional accounting team:
- Fractional CFOs fill critical needs during the early phases of startups after initial funding rounds
- It allows startups to get the high-quality financial insight, support, and direction they need for an optimistic future
- It requires startups to only pay for the exact services they need when they need it, allowing them to invest more in growth and strategy.
Still, his overview only scratches the surface of the potential rewards of developing a relationship with a fractional accounting provider.
Fractional Accounting Is More Robust Than 1 CFO
An experienced CFO lies at the head of your fractional accounting team—to help evaluate where your company stands financially while working with you, as leadership, to make sure that your company has the financial foundation to support the strategic goals and next steps for growth. But a significant reward comes in the arsenal of additional resources to which they have access. With Kranz’s Emerging Growth Services, your Consulting CFO can bring in:
- A Controller, Accounting Manager or Senior Technical Consultant to oversee your accounting functions, assist with audits, document procedural improvements, and advise on special GAAP topics (like revenue recognition)
- An FP&A Analyst who will work with you and your team to create more accurate forecasts and budgets, to create investor materials for presentation, or to help with specific project projections
- Systems Specialists who will create customized implementation plans for software integration and transition
- Recruiting specialists who can help source and fill strategic Finance & Accounting positions as you grow and scale
- Connections with our network of clients and trusted service providers that allow us to make valuable recommendations for services that we don’t provide ourselves
CEO of Kranz Consulting, Daryl Dobrenz, was recently featured in a Wall Street Journal article centered on the topic of fractional accounting. Over the past year, the article explains, many of Kranz’s clients were seeking out a part-time finance executive to assist with assessing potential exit alternatives such as with a special-purpose acquisition (SPAC) company, an IPO listing, or an acquisition.
By going fractional, you’re giving your startup the advantage of an insightful finance team with individual strengths that allow for your accounting needs to be met with speed and accuracy and with flexibility as you grow. A fractional team doesn’t just take the accounting work off your plate; they become a dedicated part of your company’s mission and work to add strategic value to revenue generation, investor relationships, and administrative processes. This tactic lets the finance and accounting professionals do what they do best, while you focus on your main goal – growing your new business.
Kranz Can Help
Kranz Consulting delivers seasoned insights and guidance to help clients increase value and create growth opportunities. Our team is fully equipped to get your startup on track with its finances through our CFO and fractional accounting services. If you have any questions or would like help creating and maximizing value throughout your business life cycle, reach out today.