With fractional accounting, businesses pay only for the services they need from experienced finance professionals, which can help businesses reduce costs, scale with ease, and remain focused on core competencies.
Why you need fractional accounting
Fewer and fewer businesses are large enough and have the cash flow necessary to employ a full-time, six-figure CFO, plus a full accounting and finance team. The available alternatives include:
- Hiring an office manager who doubles as bookkeeper and accountant
- Hiring a part-time accountant
- Shifting to fractional accounting
Hiring a non-professional to handle your finances is obviously not an ideal solution, and hiring a part-time accountant brings with it many of the same costs (hiring, training, benefits, etc.) as hiring full-time professionals. This leaves fractional accounting — an increasingly popular alternative, especially for small and midsize businesses drawn to its flexibility and low cost.
What is fractional accounting?
Fractional accounting is basically targeted outsourcing, in which businesses pay for a range of services provided by experienced finance professionals. An outside firm provides the hours of work necessary to meet the company’s needs and budget. If those needs grow, the hour's increase. If the needs decrease, the number of hours and the cost can decrease.
Benefits of fractional accounting
A significant benefit of fractional accounting is that it is typically less expensive than employing an internal staff of financial professionals. You don’t have to pay to hire and train new employees, and you don’t have to pay benefits and other costs associated with internal staff.
Another benefit of fractional accounting is that you are hiring a team of experienced experts who are equipped with the latest software and other resources. Hiring an employee with that level of expertise is difficult and costly, and it’s fraught with risk because they may leave your company and force you to start over from scratch.
The third benefit of fractional accounting is that it gives your business flexibility. When you need more support, you can easily get it, and if your needs shrink, you can reduce your commitment. There’s no need to lay off employees or go through the hiring process in the midst of busy growth periods.
That leads to the final, and perhaps the most important, benefit of fractional accounting, which is that it allows you to focus on your core competencies and business priorities. Hiring and managing an internal accounting team is time-consuming, and every hour spent on that work is an hour not spent moving your business forward.
Get the help you need
Since 1947, the financial professionals at BST have promoted the financial stability and growth of business clients worldwide. Whether you need fractional CFO and accounting services, business valuation, human resources, or other services, our team of experienced professionals is ready to assist you in achieving your goals.