When businesses experience growth, they often face a dilemma when it comes to hiring. They lack the financial resources to hire someone on a full-time basis, yet they recognize the need for a specific role in order to scale their operations. For instance, many small business owners could greatly benefit from the services of a financial controller, but hiring one as a full-time employee is often not feasible.
In the past, this problem had no easy solution. Businesses had to work with the resources they had and hope to eventually reach a point where they could afford to hire a professional controller. However, with the advent of the outsourced business model, the situation has changed. It is now possible to hire a Fractional Controller at an earlier stage in the business’ growth, allowing them to access the expertise of a controller without the burden of a full-time hire.
So, what exactly is a Fractional Controller?
A fractional controller is a senior-level executive who takes on the role of the head of the accounting department. Their primary responsibility is to manage accounting teams, ensure proper bookkeeping, and report directly to the CFO or business owner. As the name suggests, a fractional controller performs all the tasks and responsibilities of a full-time controller, but they do so remotely and on a part-time or as-needed basis.
Over time, the role of a controller has expanded to include a broader range of responsibilities. In addition to financial compilation and reporting, they may also be involved in tasks such as:
- Budgeting
- Financial forecasting
- Coordinating audits
- Designing financial processes and controls
- Ensuring tax compliance
- Overseeing the general ledger
- Payroll and taxes
- Managing finance and accounting teams
- Preparing financial statements
- Providing financial and accounting insights
- Setting financial key performance indicators (KPIs)
- Staying updated with industry-specific regulations and compliance requirements
- Tracking revenue inflows and outflows.
As a high-level supervisor, a Fractional Controller’s role goes beyond basic accounting tasks and data entry. They ensure that all accounting processes are conducted properly, emphasizing speed, accuracy, and efficiency.
So Here Comes the Million Dollar Question…Does Your Business Need a Fractional Controller?
In order to answer that question, you must first consider several factors. The biggest question being: What is the current stage of your business’s development?
Ultimately, the key consideration is whether hiring a fractional controller would provide enough value to justify the expense. If your business does not yet have enough work to support a full-time controller but has reached a level of maturity with revenues between $500,000 to $1,000,000, hiring a part-time controller can expedite the process and allow you to benefit from their services earlier on.
Once you have answered that question you may also want to consider these factors and questions to determine whether hiring a Fractional Controller is the right move for your business.
Do you need to adhere to Generally Accepted Accounting Principles (GAAP)?
GAAP is a set of accounting principles widely accepted as the standard practice by the U.S. Securities and Exchange Commission. While it may not be legally required for your business at the moment, following GAAP can help you avoid fraud, assess your company’s financial health, identify areas for optimization, and attract investors or lenders who require GAAP compliance. A fractional controller can guide your organization in adopting and implementing the 10 GAAP principles.
Do you require supervision for your bookkeeping activities?
If you lack the time or expertise to monitor your business’s bookkeeping activities, or if there are issues within your existing accounting department, a fractional controller can provide the necessary supervision. They can ensure that bookkeeping is done in a timely and accurate manner and implement accounting strategies to optimize internal processes, making them faster, more accurate, and more reliable. In cases of inaccuracies, a controller can analyze the data to identify the underlying causes and develop solutions.
Are you undergoing an audit?
Audits are an inevitable part of doing business, and a Fractional Controller can help alleviate the stress associated with them. Their responsibilities include ensuring compliance with government reporting requirements and tax filings, conducting internal audits, and providing expert support during external audits.
Does your CFO require support?
If you have hired a full-time or Fractional CFO, bringing in a Fractional Controller can help divide the workload and enhance internal efficiencies within your financial and accounting departments. This arrangement allows the CFO to focus on financial forecasting and analysis while the controller ensures the optimal performance of the accounting team.
How Barta Business Group Can Help
There is no substitute for experience –
Barta Business Group is a seasoned team of bookkeeping, accounting, and finance professionals providing outsourced solutions for small and mid-sized businesses and nonprofits. Each team member is ready on Day One to apply their decades of Controller or CFO experience to your growing business’ needs.
Schedule a call today to discuss how we may guide your business through the next chapter of growth.