Modern businesses are under constant pressure to operate more lean and agile than ever before, which demands creativity when it comes to staffing, particularly for non-full-time equivalent roles. This holds particularly true for finance departments, where business owners are struggling to properly staff themselves to handle more strategic level finance initiatives, while also keeping those senior level employees out of the mundane day-to-day tasks more suited for junior and mid-level managers.
In this guide, we’ll discuss what a fractional Controller provides, and give you insight into the seven benefits of hiring a fractional Controller for your financial operations.
A fractional Controller is a financial expert who offers strategic-level accounting services to organizations. However, unlike full-time controllers, fractional controllers work part-time or on an as-needed basis rather than working full-time within an organization.
Fractional controllers provide high-level financial oversight, management, and strategic planning, often for small to medium-sized businesses, handling tasks such as preparing financial statements, managing cash flows, developing financial strategies, and implementing strong internal controls.
Fractional controllers are great for small to medium-sized businesses that don’t require or can’t afford a full-time controller because they provide the same specialized financial control and oversight to said business without being a full-time employee of the company.
With ScaleNorth's fractional controller services, your company can enjoy an array of benefits that boost your accounting department’s efficiency, productivity and performance.
Fractional controllers are only hired part-time or on an as-needed basis instead of working full-time for your company, which significantly decreases the associated costs. Hiring a fractional controller eliminates the need for a full-time salary and associated benefits that you would otherwise have to provide to a full-time controller who’s working for your business.
This provides you with reasonably the same level of financial expertise at only a fraction of the cost. The traditional engagement includes 40 hours of weekly salary for full-time controllers, as well as additional compensations such as health insurance coverage, paid time off, and other benefits. Further, there are added savings through not needing to provide the office space, equipment, and other operational expenses.
Hiring a fractional controller eliminates all of the above since you’re utilizing a third party for a service and not an individual employee at your company.
Hiring and maintaining an in-house accounting team and a full-time controller can be difficult for small and medium-sized businesses since they are particularly susceptible to fluctuations in demand. Issues start arising during periods of increased demand such as while closing the books, or when the work slows down due to seasonality or other factors. Businesses struggle to find the balance between being over- or under-staffed, leading to unnecessary expenses accrued through excess payroll or lack of resources.
You’re inevitably going to go through periods of rapid growth and slowdowns as your business expands, and its financial needs will expand and contract accordingly. Fortunately, fractional controller services can scale up and down with your business’ growth and needs, allowing you to more seamlessly manage your accounting resources.
Fractional controllers usually split their time across multiple businesses operating in different industries, which provides them with a wider breadth of knowledge and experience in financial strategies and methodologies.
Compared to their in-house counterparts, fractional controllers typically have a better sense of macroeconomic trends, opportunities for strategic pivots, and areas for improvement in your financial processes.
Hiring a financial controller ensures comprehensive financial oversight and control, which is crucial for maintaining the financial and operational efficiency of your business.
Fractional controllers not only track daily financial activities but also gather and analyze information to provide actionable insights into the financial performance of your business. This can further help management streamline operations, increase operational efficiency, and enhance profitability.
Internal controls are important for asset protection, error prevention, and financial statement accuracy, and fractional controllers can establish a robust internal control system that could deter error or even fraud. Simultaneously, they also ensure that the implemented processes are efficient and compliant with regulations governing your industry.
Lastly, fractional controllers also assess potential risks that could affect the financial health of your business, including market fluctuations and operational inefficiencies. The fractional controller can then use the gathered data to develop risk mitigation strategies, ensuring that the company remains stable and that its financial goals remain within reach.
Due to their experiences in financial data and operations, fractional controllers can serve as major contributors on strategic planning, as they can help create long-term growth by navigating companies through complex financial landscapes.
By analyzing financial data, fractional controllers can uncover trends and patterns, predict future outcomes, and provide recommendations based on data-driven insights. This allows management or business owners to make informed, data-driven strategic decisions that could prove critical to the company’s sustainability and growth.
Fractional controllers also help develop and implement tailored financial strategies based on the previously mentioned analysis, as well as the company’s overall goals and objectives. This usually involves all the previously mentioned accounting activities, along with scenario planning, capital investment analysis, and optimizing business operations to further drive efficiency and profitability.
Efficiently conducting financial analysis and generating accurate financial reports are essential for businesses focused on growth. One of the roles of fractional controllers is to ensure that the financial statements are accurately prepared and delivered on time, helping organizations remain agile and data-driven.
This includes analyzing balance sheets, income, and cash flow statements and meeting both internal management and external regulatory requirements. Income and cash flow statements are particularly interesting, as they allow fractional controllers to identify growth opportunities while also ensuring that there’s sufficient cash flow to meet both operational needs and maintain financial obligations.
This proactive approach to accounting and finances, especially in the area of growth opportunity identification, ensures that the financial operations remain in line with the business goals and market shifts. Knowledge is power, and you can have all the knowledge and expertise necessary for these tasks by hiring a qualified fractional controller.
Fraud, unfortunately, isn’t entirely uncommon, especially in companies that don’t have strict internal controls. Fractional controllers can help you develop and implement measures to prevent fraud and safeguard the financial health of your company.
This is mostly done through the development and implementation of comprehensive fraud prevention strategies that rely on stringent controls, regular audits, and continuous monitoring of financial operations. Considering just how common fraud and embezzlement are among middle-market businesses, establishing solid internal controls is crucial.
|
Aspect |
Fractional Controller | Full-time Controller |
| Employment Arrangement | Part-time or as-needed basis | Full-time permanent employee |
| Cost | Lower cost, no full-time salary or benefits | Higher cost, includes salary and benefits |
| Flexibility | Highly flexible, scalable services | Less flexible, fixed employment |
| Financial Oversight | Provides high-level financial management | Provides high-level financial management |
| Strategic Planning | Offers strategic planning as needed | Consistent, long-term strategic planning |
| Internal Controls | Establishes and maintains ongoing internal controls | Establishes and maintains ongoing internal controls |
| Suitable For | Small to medium-sized businesses | Larger businesses needing full-time support |
| Office Space & Supplies | Not required | Required |
ScaleNorth offers fractional controller services to businesses that don’t have the need for an in-house, full-time controller. Our controllers work in tandem with your existing finance and accounting staff to give you a piecemeal solution to manage all aspects of your financial operations.
If you’re looking to realize the benefits of bringing in a fractional controller to your business, reach out to ScaleNorth today.
