If you’re looking for a new way to run your financial department, you have come to the right place. Hiring an in-house team or individual to handle your accounting can be a costly and time consuming process.
With a fractional partner, the risk of losing key team members and finding the time and resources to train new employees is no longer a stressor for the CFO. Fractional accounting firms are able to take on this burden for you while providing you with the most qualified and skilled individuals to push your finances in the right direction.
Reasons why fractional is better than full-time hires
Key man risk
Most small to midsize companies choose to go the traditional route to staffing, hiring full-time employees, when it comes to their accounting department, rather than hiring a full fractional team. Although this may seem more cost efficient due to fixed salaries of employees, what happens if you lose that one key team member that holds all the knowledge of your companies’ cashflow? And, in exchange for this increased risk are you really even saving anything at all?
When key team members turnover, a huge gap is left in the business for the institutional knowledge that it takes to run your accounting. This also puts a lot of stress on you, as the CFO or CEO, to go through the hiring process rather quickly in order to fill the position and hopefully get a new team member trained and up to speed before your current employee leaves. Not only is this time-consuming, but it can be costly and disruptive to your business.
Headache of hiring
Hiring for any position can be a hassle. Finding adequate candidates to interview and train is a timely task so why not let someone else handle that?
Not to mention, turnover can be very cyclical and positions in the finance sector are currently experiencing a 17% turnover rate. This means you could hire a full-time employee, get them up to speed, only to go through the same process a few months later. This requires extra time and money from your company.
Another important note is that certain positions in accounting are not always needed. For example, during budget season, you may need to scale your team up compared to other times of the year when you need to scale down, depending on the demands for your company at that time. By working with a fractional finance team, they are able to allocate that for you with members already trained and qualified so that you don’t have to hire for temporary positions, or stretch existing personnel to try and cover these peaks.
Save recruitment fees
Some companies do not have time or the staff to hire themselves, so they hire a recruitment service to do that for them. This can cause a lot of issues. Not only does it take time, but this also can be a very costly approach as most firms charge 20-25% of annual salary despite how much effort they spend to find you candidates. With fractional accounting, the experts are already onboard, relieving you from this task.
Speed to execution
Going along with the hiring process, no matter if you hire in-house or use a recruiter, you are still responsible for getting that new team member up to speed.
Once you do have someone hired, the onboarding and training process takes even more time and effort from additional staff in order to ensure your new employee can perform tasks with confidence. Most employees are only onboarded a few times throughout their career as they change jobs only every several years. On the other hand, hiring a fractional team requires no training, only initial insight on how your company deals with their finances and speed to execution and learning new companies is part of their DNA.
Depth and versatility
Within any company there are going to be times you need specific tasks done every once in a while, but not on a consistent basis. What if you don’t have anyone in-house with knowledge or skills to be able to successfully complete the task? Do you hire someone temporarily in order to complete this one task or stretch others who are already busy, not fully qualified and may not have the abilities to easily complete the work?
This is one of the greatest benefits of fractional accounting. Specific expertise in niche areas are offered to companies when they need it. Instead of you trying to hire someone for a temp position or having those overqualified (high cost) or overworked (opportunity cost), a fractional accounting company already has the resources available.
A few examples of these niche sectors of accounting include:
- Audit preparedness and support for forecasting
- Difficult reconciliations
- Month-end and year-end accounting close
- Debt, equity financing/ M&A
- Financial reporting and strategic planning
Cost and work efficiency
Overall, hiring a fractional accounting team is the most cost efficient option. Fractional solutions are able to offer a small team with a mix of transactional (AP/AR), GL accounting, and FP&A, and have expertise in various industries, at the price of one in-house person that may not be as skilled on various tasks.
With fractional accounting, engagements are more expensive initially and become less costly as time goes on and processes improve, onboarding, or transformational work, is through, and recurring processes are well documented and organized. This allows you to “cost down” over time whereas hiring someone in-house will require raises over time, benefit packages, and much more.
Like we mentioned earlier, you have many priorities which drive a variable demand of time and effort from your team. With fractional accounting, you are able to scale your engagement up or down as needed compared to traditional fixed resources who have limitations to their skills and experience and don’t fit the dynamic nature of the demands on your accounting department.
Bright Balance – financial experts
Outsourcing your accounting team allows for a wider range of financial services offered to you and a broader skill set at a lower cost.
At Bright Balance, our financial experts specialize in ongoing financial support as well as the less common tasks such as financial statements, reporting, strategic planning, and many other accounting services.
Our partners vary from startup companies to large corporations in multiple industries. Because of our wide range of clients, our engagements are extremely versatile so that we can ensure to meet our partners business needs and financial goals.
Our teams often see blended rates at or below that of traditional staffing models, especially those located in high-cost areas like California, bringing a menu of benefits at reduced cost.
To learn more about how your company can benefit from the financial expertise we offer, contact us today!
