If you’ve landed here, you might know what fractional services include, but maybe you want to learn more about how customizable these engagements can be.
We’ve put together an FAQ covering all things Client Accounting and Advisory Services (CAAS) and fractional accounting that we hope can relieve some of the confusion and even frustration you may be feeling. Don’t hesitate to reach out to learn more if you’re still left with questions or want to dig deeper into what CAAS is, and whether it might be a good fit for your business.
What are Fractional Accounting Resources, and are they different from Client Accounting and Advisory Services (CAAS)?
Fractional Accounting Resources and Client Accounting and Advisory Services refer to financial and accounting professionals who offer their expertise and services on a part-time or as-needed basis to businesses. The terms are used interchangeably across different industries, but the important distinction is that, unlike full-time employees, fractional resources work on an hourly or monthly bases, and typically work with multiple clients concurrently. A fractional resource can be a CFO, a VP of Finance or Accounting, a Controller, or a combination of resources, providing flexible support tailored to each client’s requirements.
What types of services are provided by fractional accounting resources?
A fractional resource is a financial or accounting professional who provides part-time or project-based services to businesses and non-profits. This resource, or sometimes a team of resources, typically has extensive experience in areas such as strategic planning, financial strategy, forecasting, risk assessment, growth acceleration, and budgeting. Additionally, we have staff and senior accountants who collaborate with senior financial leadership to handle the day-to-day financial and accounting functions of your organization, if needed.
Fractional resources work with your leadership to assess needs and determine the necessary time to manage the company’s finance and accounting requirements and engage in strategic planning. Based on this assessment, they will develop a tailored resource plan to meet your specific needs, goals, and associated costs. They can help your organization build a strong financial foundation so you can focus on growth.
What is the difference between fractional accounting services and traditional accounting?
Fractional accounting services differ from traditional accounting in scope, delivery model, and focus. While traditional accounting revolves around historical financial reporting, compliance, and tax preparation, a fractional accounting provider expands beyond these functions to offer a broader range of services tailored to your specific needs.
Fractional accounting services emphasize proactive financial insights, strategic planning, and ongoing support, aiming to provide real-time data and guidance to drive business growth and profitability. Unlike the periodic and transactional nature of traditional accounting, fractional accounting fosters a more interactive and collaborative relationship between the resource and the client. It focuses on leveraging technology and delivering value-added services to effectively achieve the client’s financial objectives.
How does a fractional resource save money and provide value?
Hiring a full-time, in-house Chief Financial Officer can cost an organization at least $250,000 annually, including base pay, bonuses, equity, and benefits. In many businesses and non-profits, a full-time CFO is not necessary because the organization does not have the demand of 40 hours per week consistently. Instead, fractional CFOs can be deployed at an hourly rate or at a monthly fixed fee (in most cases).
For example, Company A is looking to engage with a fractional CFO to guide the creation of a strategic plan with leadership, implementation of accounting best practices, and ensure a scalable reporting function for future growth.
In this example, a fractional resource with the appropriate internal support can be hired for $7,500 a month to meet the predetermined and ongoing needs. This results in a total annual cost of $90,000, compared to $250,000 per year for a full-time resource.
What is the difference between working with a staffing agency and utilizing fractional accounting services?
Most staffing agencies typically mandate a minimum commitment of 40 hours per week for an interim staff member during a specified contract period. These agencies specialize in recruiting, screening, and placing qualified temporary workers to fill such roles. Once a suitable match is identified, the agency oversees all administrative aspects of the employment arrangement, including payroll, scheduling, and performance oversight. Throughout the assignment, the agency acts as the main liaison between the client and the temporary worker.
The fractional model differs in that our professionals work full-time for us and are available to you on an as-needed basis. This means that your fractional resource could work as few as 8 hours on a week-to-week basis and scale up based on agreed priorities and responsibilities. This offers organizations significant savings in staffing costs because the goals are mutually agreed upon, and then staffed accordingly. We continue to recruit, screen, and select top talent that meets our clients’ needs, drawing from individuals with industry experience who have also sat on the client side in the past. We prioritize matching talent based on both experience and personality to ensure a suitable fit for client engagements. Clients often have the opportunity to interview available talent to ensure the right match before proceeding with an engagement through CAAS.
At Barnes Dennig, we highlight that our flexible staffing solution directly translates to fewer weekly hours, a detail that might not be immediately obvious when discussing “part-time” or “as needed” options with traditional staffing providers.
What kind of organizations can benefit most from the fractional model?
Companies and non-profits with annual revenue between $3 million and $100 million, with a target of strategic growth in the next 3-5 years are an ideal fit. Many fast-growing organizations want a full-time in-house resource, but find the annual cost is outside their budget constraints – and a fractional resource can provide a great return on investment for those organizations.
Achieving a best-in-class experience hinges on treating the fractional resource as an integral part of the team rather than just an hourly consultant. By embedding the fractional resource within the team and engaging with them accordingly, organizations can receive optimal advice and maximize the value of their investment in fractional resources.
What are the advantages of using fractional accounting resources over hiring full-time staff?
Using a fractional resource can be more cost-effective than hiring full-time, especially for fast-growing companies. That is because you only pay for the services you need, and you do not have to provide benefits or other fringe benefits associated with a full-time resource.
Fractional resources can provide you with the flexibility and expertise you need to grow your organization – you can scale your services up or down as needed. Fractional VP’s and Controllers typically have extensive experience in financial management from across a range of industries and can provide you with the expertise you need to make sound financial decisions that support your organization’s growth. They often have access to a network of resources encompassing enhanced financial data, sector-specific research, and advanced financial technologies, to deliver customized solutions and insights that promote sustainable growth and operational efficiency.
If I have never had a financial professional, or my company’s financial record keeping is not up to date, can I still work with a fractional resource?
Yes! Your fractional resource will have proficiency in bringing accounting current while also ensuring accuracy and compliance in various reporting matters, including retrospective analysis. Our engagements frequently start with these tasks before transitioning to ongoing work.
Our fractional Accounting Managers and Controllers specialize at stepping into unique situations and identifying quick wins to efficiently manage and improve your financial operations from the outset.
Can fractional accounting resources integrate with our existing accounting systems?
Our fractional resource excels at developing an integration with your existing accounting systems. We prioritize continuity and efficiency in financial operations. Here’s how we ensure smooth integration:
- Assessment: We begin by conducting a thorough assessment of your current accounting systems and processes. This allows us to understand the architecture, functionalities, and any potential areas for improvement or customization.
- Customization: From there, we tailor our approach to align with your existing systems. Whether you are using industry-standard software like QuickBooks, SAGE, NetSuite or a custom-built solution, your resource team is well-versed in adapting to various platforms.
- Training and Support: Our team provides comprehensive training and ongoing support to your leadership and staff, ensuring that we are not creating a new challenge to your day-to-day operations.
How do you ensure data security and confidentiality with client accounting services?
Our systems provide encryption of sensitive data in transit and at rest, strict access controls with role-based permissions and multi-factor authentication, and regular audits and monitoring for suspicious activities. We secure your data storage on protected servers with robust physical and digital security measures and offer continuous employee training on data security best practices.
Barnes Dennig follows relevant data protection regulations to ensure legal adherence and alignment with industry standards, thereby safeguarding client data from unauthorized access or disclosure throughout all stages of handling and processing.
What qualifications and experience do your fractional accounting resources possess?
Our CAAS resources come from various professional backgrounds, either in public accounting, private industry, or a combination of both. This breadth of financial expertise gives our team the flexibility to work with one another to leverage expertise to fit your needs and approach any scenario from an experienced and nuanced perspective. At a high level, each role on our CAAS team possesses the following skills and expertise:
Chief Financial Officer – A CFO provides meaning to a company’s financial numbers, using their expertise to help leadership identify growth goals, create an actionable strategic plan, oversee ongoing finance and accounting operations, maintain and develop investor relations, negotiate debt and loan needs to drive growth and stability, and provide financial planning for mergers and acquisitions or the sale of a business.
Vice President of Accounting – The VP of Accounting (or Director of Accounting) provides high-quality, efficient, effective, and accurate financial services, establishes and communicates policies and procedures necessary to ensure proper and efficient use of company resources, effect change through continuous process and quality improvement with a progressive vision toward the future, safeguard an organization’s assets, and focus on providing reliable and meaningful information to decision makers.
Controller – The Controller takes responsibility for all aspects of accounting operations, including planning and directing of functions such as billing, accounts receivable (A/R), accounts payable (A/P), general ledger (G/L), cost accounting, revenue recognition, taxes, financial statement preparation, preparing and analyzing annual budgets, increasing reporting efficiencies, and establishing financial policies. Ultimately, they ensure the organization’s finances run smoothly.
Accounting Manager – The Accounting Manager prepares and reviews financial documents, reports, and statements. They take responsibility for overseeing the organization’s daily Finance and Accounting functions, including bookkeeping, accounts payable and receivable, payroll, end-of-month close, audit preparation, and other related duties as assigned. Additionally, the Accounting Manager is responsible for developing and maintaining accounting principles, practices, and procedures to ensure accurate and timely financial statements.
How do you tailor client accounting services to meet our specific needs?
Together, we will identify the specific financial service and talent voids within your organization and assist in bridging these gaps for as long as necessary. Our services include offering a fractional CAAS Accounting Manager, Controller, Vice President of Finance or Accounting, CFO, or any other required role to meet your needs.
Working with the CAAS team often looks like this:
- Discovery period that uncovers the tasks, responsibilities, and talent that will best serve your organization.
- A custom-built plan to deliver your needs and achieve your organizational goals.
- A right-sized relationship with a value-added, fractional team member.
- A newfound confidence that your advisory and accounting needs are being fully met.
Barnes Dennig professionals are a special breed, supported by a culture that is based on seeing beyond the numbers. They are responsive and strategic. They get results. And they stay, adding strength to our team (and yours) over time. You do not have to take our word for it. Our clients and peers are not shy about praising us for the job we do.
Want to see if CAAS is a good fit?
Take our fractional accounting needs assessment.
