CFO, Controller, and CSM: What Is a Fractional Accounting Team?
Running a tight ship is hard work. With the right tools, experience, and resilience, office managers and administrators can pull together the operations of a small business office to keep things moving. But as your company continues to grow, the challenges and complexities of managing the books and business will grow exponentially along with it. To protect all of your business's behind-the-scenes finances, you need more than automated tools and support staff who can switch gears and go with the flow—you also need vetted financial professionals with the expertise to establish your daily accounting operations and manage long-term forecasting tasks.
If you're worried that a CFO and controller are exactly what your company needs, but they simply can't fit into the budget, then it's time to think laterally. A fractional accounting team—made up of a CFO, controller, and Client Service Manager (CSM)—is a contracted team that your business can hire at a fraction of the six-figure sum of just one financial professional's salary.
Ready to learn more about how a consulting team can take a lot of your daily stressors off your plate and address some of the biggest causes of your team's burnout? Here we'll take a look at what a fractional accounting team is and why their services are fundamental for a smoothly running office. Then we'll look deeper at the roles and responsibilities (and benefits!) of filling each role with a fractional financial professional.
What Is a Fractional Accounting Team?
Accounting teams are made up of professionals—from CFOs with years of experience to licensed CPAs to tech stack-savvy billing specialists—who manage day-to-day and strategic financial services within a business. However, your company may not be big enough to warrant the full-time, salaried services of heavy hitters like CFOs and controllers. In fact, conventional wisdom is that most businesses don't need a full-time CFO until they make more than $50 million in annual revenue.
That's where the "fractional" component comes in. Instead of trying to hire a CFO on a five-figure salary and not having enough steady work to keep a whole team of financial experts busy, your company can contractually hire these professionals on a part-time basis. You can hire them for specific projects of a set duration, bring them on for occasional consulting efforts, or put them in charge of a detailed set of responsibilities and tasks—whichever options fit your business's current and future needs and budget.
The services a fractional accounting team can provide include:
- Financial Strategy: Fractional CFOs, controllers, and CSMs can learn about your business and create a sound financial strategy for your objectives. Because they have years of experience inside and outside of your industry, they bring a lot of general business, financial, and industry-specific insights to the table.
- Statement Preparation: Financial regulations and compliance standards are hard for small businesses to manage on their own. Your part-time financial team can help you prepare for tax season, going public, and your next investor meeting.
- Accounting System and Procedure Oversight: The right team will create standard operating procedures that guide day-to-day activities, monthly tasks, and quarterly wrap-ups. By laying the groundwork and helping with internal audits, fractional teams will set your in-house staff on the right path.
- General Accounting and Back-Office Support: If you're the office manager of a very small professional services firm, your salaried staff might not have any accounting experience. With a fractional team, you can customize the contracted services to include support for daily activities, process questions, and more.
- Financial Modeling: Data is everything in today's revenue operations. Your fractional CFO can create financial models based on your business's historical and current data to project the financial effects of different courses of action. With their assistance, you can set growth goals, determine the best path for consistent cash flow, and create a plan for the year ahead.
High-quality financial management services should be available for businesses of any size. If your business is below that $50M revenue mark, that doesn't mean you have to make do without one. Opt for part-time or fractional teams that are the perfect fit.
How a Fractional Financial Team Can Help Small Businesses and Professional Firms
A fractional financial team, not just a CFO, is a strategic move for most small businesses. Not only do you want the long-term strategic capabilities of a financial executive, but you need people who can create processes for accounting, billing, and managing taxes. Having three heads instead of one also allows you to tap into a bigger range of experiences. Some of the key ways a fractional financial team can help take tasks off your plate and set the business up for consistent growth are:
- Creating a full financial team, as multiple professionals, make your business stronger than having a single leader
- Creating processes for day-to-day decision-making
- Working with the CEO or business owner for bigger-picture decisions
- Taking on the professional responsibility of stringent financial management tasks
- Working together: A controller can ensure your team has stronger financial data, which a CFO will use to make robust financial models and future strategies. The CSM is the final piece of the puzzle; they can translate financial goals into client service goals (and vice versa).
What Does a Fractional Accounting Team Do?
All of the processes and services listed above require all three professionals to get the best results. Here are the responsibilities and benefits each role brings to the table:
Your fractional CFO will proactively advise you on financial goals and decisions. Along with providing models and insights, the fractional CFO can advise you and the business owner on changes to the tech stack, automation options, and more. They can also help with succession planning so you can develop a clear exit strategy, determine the business valuation, and chart your business's path for the future.
Fractional controllers manage data. They'll help your in-house staff stay compliant with financial regulations and find potential tax savings for your organization. Turn to a controller for help with financial statements and data-based analytics.
Fractional Client Service Manager
In today's world of revenue operations, financial teams and client services need to have clear lines of communication. Your fractional CSM will support your teams as the main point of contact for payroll, accounting, and more. They can educate your team, manage payroll, and create processes for customer transactions.
Create Financial Freedom With an Outsourced Financial Team
Small businesses and professional firms no longer have to try and make do without financial expertise just because of their size. Fractional financial teams made up of a CFO, controller, and CSM, can help your office set up excellent processes for daily business and long-term growth. At Dillon Business Advisors, we provide fractional services that serve as the cornerstone for your financial operations. Contact us today for a financial business analysis.
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