In today’s dynamic and competitive market, businesses that aim to grow face a fresh challenge: building a scalable and sustainable accounting function while avoiding overburdening their existing team.
To facilitate strategic decision-making and implement scalable solutions, it is often advantageous to seek external expertise.
As specialists in empowering organizations to fully optimize their financial performance, we have compiled key insights on fractional outsourced finance and accounting consultants. These professionals can provide essential support and guidance in achieving your goals.
Hiring a fractional outsourced finance and accounting consultant can be beneficial in various situations. Here are some scenarios that indicate it may be the right time to consider bringing one in.
Important things to know about Fractional Outsourced Finance & Accounting Consultants:
- Fractional Outsourced Finance definition
- Fractional Outsourced Accounting definition
- Common Fractional Outsourced Finance & Accounting activities
- Fractional Outsourced Finance & Accounting Consultant roles, responsibilities and job duties
- Benefits of hiring a Fractional Outsourced Finance & Accounting Consultant
- Signs it’s time to hire a Fractional Outsourced Finance & Accounting Consultant
What is Fractional Outsourced Finance?
Fractional outsourced finance includes the process of developing a monthly annual financial plan for board approval and tracking monthly results against the plan.
Additional responsibilities include helping the company raise capital in the form of equity and/or debt, keeping the shareholders’ cap table current and preparing financial presentations for board review.
What is Fractional Outsourced Accounting?
Fractional outsourced accounting is the process of conducting day-to-day accounting duties on an interim or project-based basis versus a full-time basis. These duties include management of AP/AR, cash flow strategy development, ensuring adherence to GAAP standards and best practices, and more.
The key distinction in developing a fractional outsourced finance and accounting model versus relying on internal support is that it ensures your organization receives tailored solutions in customizing proven accounting methodologies to your unique goals and concerns.
Common Fractional Outsourced Finance and Accounting activities:
- Execution of Day-to-day Finance & Accounting Duties: AP/ AR, Financial Close, Revenue Recognition, Billings & Collections
- Financial Reporting
- Financial Planning & Analysis
- Financial Statement Preparation
- Budgeting & Forecasting
- Implementation of New Accounting Standards
- Stakeholder & Third-party Collaboration
What does a Fractional Outsourced Finance & Accounting Consultant do?
Fractional outsourced finance and accounting consultants provide support by analyzing your current accounting configuration for inconsistencies and areas for improvement and establishing a plan of corrective action.
Whether your organization needs to reevaluate financial reporting procedures or implement measures that foster more collaboration with investors and stakeholders, fractional outsourced finance and accounting consultants provide support where it’s most needed for growth and scale.
Rather than running the risk of overloading your current team and experiencing costly setbacks, it is often more beneficial – and cost-effective – to turn to a skilled finance or accounting consultant who already has the necessary expertise to develop the right accounting function for your unique company needs.
Skills & duties of Fractional Outsourced Finance & Accounting Consultants:
- Providing day-to-day finance and accounting support to ensure compliance with accounting standards, regulations and best practices.
- Managing cash flow, financial close, accounts payable/receivable, revenue recognition, billings and collections to develop a healthy, sustainable finance and accounting function.
- Preparing reports for visibility into financial performance and enabling due diligence review.
- Providing in-depth financial analysis for informed business decisions and project or investment direction.
- Preparing financial statements and footnote disclosures for private and public companies in accordance with applicable reporting requirements.
- Managing risk through budget planning and financial forecasting while optimizing processes for future growth and success.
- Assisting with research, evaluation, analysis, calculations and documentation for efficient adoption of new accounting standards.
- Collaborating with banks, auditors, lenders, investors, vendors and other stakeholders to meet key deadlines.
What are the benefits of hiring a Fractional Outsourced Finance & Accounting Consultant?
- Cost effectiveness.
- Scalability and flexibility.
- Focus on core competencies.
- Best practices and industry insights.
- Reduce risk and compliance support.
When should you hire a Fractional Outsourced Finance & Accounting Consultant?
Ultimately, the decision to hire a fractional outsourced accounting consultant depends on your organization’s unique circumstances and needs.
Evaluating your current resources, growth trajectory, financial challenges and strategic goals can help determine if and when bringing in external expertise is the right choice for your business – however, below are some of the most common reasons organizations commonly engage with fractional outsource finance and accounting consultants.
Signs it’s time to hire a Fractional Outsourced Finance and Accounting Consultant:
- Limited Internal Resources: If your organization has a small accounting team or lacks the necessary expertise to handle complex financial matters, hiring a fractional outsourced accounting consultant can provide the additional resources and specialized knowledge needed to support your accounting function effectively.
- Rapid Growth or Expansion: When your business is experiencing rapid growth, it can strain your existing accounting resources. A fractional outsourced accounting consultant can help scale your accounting function quickly, ensuring it can accommodate the increased demands and complexities associated with growth or expansion.
- Cost Optimization: Opting for a fractional outsourced accounting consultant can be a cost-effective solution compared to hiring a full-time, in-house accountant. By utilizing their services on a part-time or project basis, you can access the necessary expertise without the long-term commitment and overhead costs associated with a permanent employee.
- Specific Accounting Challenges: If you encounter specific accounting challenges or require expertise in a particular area, such as financial reporting, tax compliance, or implementing new accounting systems, a fractional outsourced accounting consultant can bring in-depth knowledge and experience to address those challenges effectively.
- Strategic Decision-Making: Fractional outsourced accounting consultants often have a broader perspective gained from working with various clients across industries. They can provide valuable insights and analysis to support strategic decision-making, financial planning, and forecasting.
- Temporary or Transitional Needs: During periods of transition, such as mergers, acquisitions, or leadership changes, a fractional outsourced accounting consultant can provide stability and continuity in your accounting function. They can ensure seamless operations during these critical phases.