Fractional CFO Firm vs Outsourced Accounting Service: What Does Your Organization Need?

Fractional CFO vs Outsourced Acct

Let’s do an imagination exercise. You have a small but growing business that is really starting to gain traction. You have had a bookkeeper for years but your needs have really started to outgrow her abilities. Increasingly, you want someone that isn’t just showing you the data about your organization’s performance but is also able to provide guidance on decisions. You don’t need a scorekeeper, you need someone who is able to sit at the table and provide advice. 

There is a bit of a fork in the road here for what kind of service you hire next. Some organization’s end up hiring an outsourced accounting service, such as KBS CFO, other organization’s hire fractional CFO firm. When I talk to companies it seems that often that decision is made by the very rigorous test of “who talked to me first”. That is a shame since there are consequential differences between these services that will make a difference in the service you receive. 

What Every Successful Accounting Team Needs

When you think of an old school accounting team, say one from a larger organization, there are three distinct roles that are necessary to perform the work. First, the transaction specialist (or accounting clerk). S/he is the first person in the accounting department to record expenses and input information into the system.  Second, the accounting manager who has an oversight role and checks to make things are done right and align with expectations. Finally, the CFO or controller whose job is to use that information at a high level to work with other members of the executive team on big picture organizational decisions. 

These three require not only different skills and expertise, but looking at the data from different perspectives. In a well run operation, these individuals not only work together well but are literally dependent upon one other. The success or failure of the collective is based on each individual’s input. They are, quite literally, a team. 

Outsourced CFO Services

When you hire an outsourced CFO service you are hiring an individual. When comparing this model to the model of how an accounting company works best, you are bringing in only the top layer. They are dependent upon the financials you provide them. Because they don’t have the team surrounding them, their advice and guidance can be hindered by the quality of the data. While it is almost certain in this situation that you have other resources executing the other roles (typically the aforementioned bookkeeper) your outsourced CFO won’t have the long standing partnership and rapport with her (or him) that a well oiled accounting team might have. 

Outsourced Accounting Services

An outsourced accounting firm on the other hand is bringing in a full team. They have the necessary skills at each level and have systems and processes in place to make sure that their work is aligned and complementary. A well run outsourced accounting firm can come in very quickly and begin producing value immediately. 

Why Choose An Accounting Team

Sure, I am biased, but my recommendation for small businesses 100% of the time is to find an accounting team you can trust and hire them for your outsourced accounting needs. The dream of the outsourced CFO service, a simple individual, is understandable. But, the reality? Well, that is different. 

Interested in hiring a great outsourced accounting team but not sure where to start? Let’s set up a time to chat. We aren’t always the right accounting solution for every organization, but we are knowledgeable and honest and will guide you in the right direction. Get in touch today.