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What Are the Benefits of Fractional Outsourced Accounting?

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Fractional outsourced accounting offers many benefits to startups and emerging growth companies – especially if they have complex accounting arrangements, stringent regulatory requirements, or are embarking on a strategic transaction.

As experts in helping organizations overcome accounting challenges and enhance financial performance, we’ve outlined some essential information surrounding the benefits of fractional outsourced accounting.

What is Fractional Outsourced Accounting?

Fractional outsourced accounting involves turning to a trusted external partner to manage AP/AR, implement GAAP accounting standards, and conduct other day-to-day accounting duties on an interim or project-based basis versus relying on internal employees, company teams, or full-time hires.

The fractional outsourced accounting model is designed to adjust in scale according to a company’s evolving needs, providing specialized expertise exactly where needed. In addition, hiring a fractional outsourced accounting consultant or team can often be more cost-effective than hiring a full-time employee. 

For a comprehensive view of the key responsibilities of fractional outsourced accountants and teams, head to our blog: Fractional Outsourced Finance & Accounting Consultants: What They Do & How They Help.

Benefits of Fractional Outsourced Accounting for Startups and Emerging Growth Companies

Fractional outsourced accounting provides access to specialized expertise

Fractional outsourced accounting provides access to industry veterans who can quickly adapt to changing business needs and concerns in order to inform insightful resource allocation, efficiently manage budgets and track project costs, navigate risk and ensure compliance, and execute other key accounting duties as needed.

This process is designed to ensure each startup or emerging growth company receives tailored support exactly where needed, helping them better understand the profitability of each initiative, identify cost overruns ahead of time, and foster more reliable decision making.

Fractional outsourced accounting enhances insights and establishes efficient and reliable accounting processes

The fractional accounting model ensures a startup or emerging growth company can swiftly identify and correct any operational gaps or inconsistencies, seamlessly adhere to GAAP accounting standards and best practices, and build an efficient and reliable finance and accounting function.

By working closely with the company to rework fragmented accounting and reporting processes, optimize financial strategies, and integrate industry-leading accounting software solutions, fractional outsourced accountants and teams are uniquely equipped to enhance financial insights and capabilities – and ensure that any procedural changes or new systems are implemented with little disruption to operations.

Fractional outsourced accounting helps navigate reporting timelines and stakeholder requests

Stringent reporting timelines and requests from auditors and stakeholders can pull much-needed focus away from startup and emerging growth company goals – but fractional outsourced accounting empowers organizations to get ahead of these hurdles by managing all channels of communication and collaborating with banks, auditors, lenders, investors, and other stakeholders to ensure key deadlines are met.

Fractional accounting consultants and teams will also prepare relevant documentation and reports well ahead of stakeholder review, helping the company become audit-ready and equipping them to seamlessly transfer knowledge to existing staff.

Fractional outsourced accounting provides support through periods of growth, transition, or strategic transformations

While essential for scaling a business, strategic transactions (e.g. M&A or IPO) and rapid periods of growth or turnover often introduce unnecessary chaos to startup and emerging growth company operations.

The fractional outsourced accounting model ensures each organization receives tailored support in consolidating financial data, conducting due diligence, assessing the financial impacts of the deal, and helping to facilitate a smoother transition by fostering synergies and eliminating redundancies.

Final Thoughts on the Benefits of Fractional Outsourced Accounting for Startups and Emerging Growth Companies

Startups and emerging growth companies often lack the in-house resources and specialized expertise that is needed to overcome accounting challenges, avoid compliance hurdles, and execute daily accounting duties – all while navigating the path toward growth.

Operating with a lean accounting department can compromise your financial health, lead to missed opportunities and expose your organization to risk. To enable strategic decision-making and scalable solutions, it’s vital to focus on building out the right accounting team.

Kranz’s fractional outsourced accounting model is specifically designed to provide support where it’s most needed. By analyzing your current accounting configuration for inconsistencies and establishing a plan of corrective action, we empower you to take full control of your financial performance and turn complex numbers into new opportunities.