What is Fractional Accounting?

Fractional Accounting is the customized delivery of equivalent expertise, as full-time employees, on a variable basis. For startups, this can be an ideal solution, as many back-office team members struggle to keep up with increasing responsibilities and deadlines as the company experiences significant growth.   

CFOs take on very complex tasks in managing the finance function and for startups and this can get overwhelming in times of rapid growth. The CFO should have a team to manage the rapid increase in scope and complexity of the finance organization so that finance and accounting are not the bottlenecks to growth, and the finance function is well managed and under control.

When it comes to startups, many finance teams face the challenge of implementing too much structure too soon in the face of rapid growth and change which results in inflexible, heavy, and slow finance departments. Others are late to the party and do not implement the basic structure needed and end up with messy, disorganized, and sometimes undeterminable financials leaving the team drowning as they try to catch up to the business.

How do Fractional teams help?

Fractional teams help CFOs with experience in the startup space along with the knowledge of what to implement, given the stage of growth and the company’s circumstances. They take on the role of creating suitable procedures that reduce unnecessary spending and hence increase profit margins. 

Why not let someone help you get the right systems and processes in place? A fractional CFO can also scale up with you as the business grows.

Making sure you strengthen your capacity and agility with a fractional team will help maximize productivity and increase your chances of success as a startup. Hiring a fractional team with the necessary skill sets and capacity that your team does not possess can help you achieve your overall goals, meet deadlines, and avoid being understaffed and overwhelmed. By automating key processes, your team can save time and ensure the accuracy of data without the need for manual double-checking.

Stay lean and manage costs! 

• By having a fractional team, you can make sure you have the appropriate level of personnel, for the right job. By assigning specialized tasks to an appropriate expert, you can ensure that you run lean on your costs and keep an efficient finance department.
• Fractional accounting teams will understand what processes need automation, based on their experience with different industries. They are also familiar with various accounting software which would help eliminate the training process that can cost your team hours of valuable time, they could be doing productive work. This means those special projects that the in-house team never has time for, finally get done!

No lost time = maximum productivity. 

• In a period of rapid growth, CFOs seek to hire and retain more employees to cover the increased workload. Valuable time is wasted in hiring and training new people, a tedious task that can be utterly avoided when you already have a fractional team working alongside your staff, in case there is a need for additional capacity. 

That is where fractional accounting services come in!

A fractional team helps you stay ahead of deadlines with the right amount of expertise and capacity to get the help you need. All businesses know the struggle it can be in January with year-end close, audit prep, 1099s due, updating the board on year-end, and preparing for the next year with forecasts and budgets. 

Cash flow projections, budgeting, and financial forecasting are easier when you have an experienced team who knows the industry and business trends. Fractional CFOs leverage their expertise in making sure your startup business goals are empowered by maximizing your performance and creating a smoother transition during periods of rapid growth.

 CFOs should focus more on business strategy rather than worrying about meeting accounting deadlines, due to a lack of capacity on their team. Their value-add is in being a guiding voice to the business.

When you consider the fact that the fractional team does not have a tax, or benefits load, and usually takes no equity, you can easily understand the cost savings. Working alongside a fractional team will not only help simplify your processes, cash flow, and people management, but it will increase capabilities while also saving costs compared to a traditional staffing model. 

The Bright Balance Accounting team has the required expertise and the capacity to help CFOs achieve their ultimate goals and objectives. If you are interested in learning specific ways we can simplify your finance function, schedule a 30-minute introductory call with our CFO by emailing info@brightbal.com or contacting us here.