How Much Does Fractional Accounting Cost? Is it Worth it?
For entrepreneurs and small business owners, building out a dedicated accounting department can mean taking time and resources away from your main mission. Whether you are working in tech services or eCommerce, it may be worthwhile to outsource your financial needs through fractional accounting.
The question is: how much does fractional accounting cost?
Most small and mid-sized businesses can expect to spend less than $10,000 per month on fractional accounting services, depending on your needs.
Wondering if fractional accounting is ideal for your venture? Read on to learn about the benefits and advantages of fractional accounting, and discover why this service is changing the business landscape.
What Are the Financial Benefits of Fractional Accounting?
As your business grows, so do your financial responsibilities. What begins as general payroll and bookkeeping can expand to complicated compliance issues, complex invoicing, budget balancing, and so much more.
Consider the following scenarios to see how fractional accounting can meet these needs while saving your business money.
No In-House Accounting Department
With a host of growing needs, small businesses in the past were required to create their own distinct accounting departments that fulfilled their financial responsibilities and reporting requirements.
Traditionally, building an in-house accounting department includes:
- New hires – Recruiting and interviewing new employees is typically the first part of developing an accounting department. While you may be able to hire and promote from within your business, you will likely need to expand your team over time, and sourcing quality candidates takes time and resources.
- Training – No matter your new hires’ caliber and experience in the accounting industry, you will likely need to implement a complete onboarding and training process. This can include several days or weeks of formal instruction and specialized materials to familiarize your new team with your work environment.
- Salary negotiation – New hires will expect sufficient remuneration, and the negotiation process for salaries and benefits will take additional time. To attract top talent, you will need to offer competitive packages. The negotiation process can lead to increased expenses and time lost as you settle on compensation.
The average salary for a single small business accountant is about $50,000 per year. Your business may require more than one individual to manage all of your accounting needs, quickly pushing the yearly costs over 6-figures.
On the other hand, fractional accounting can provide you with the same level of quality service for a fraction of the price.
The cost of outfitting your accounting team with the technical equipment and resources to do their job can directly affect your bottom line.
A standard accounting department may require any or all of the following:
- Accounting software
- Cloud and server space
- Office space
- Telecommunication equipment
There is also the continued cost of upgrades and further training as new technologies are developed and implemented.
Fraction accounting can help circumvent all these added overhead costs. Instead of outfitting an entire team, you can look forward to a consistent and predictable monthly fee for all necessary accounting services.
Creating a functional and practical accounting team can take months or even years to implement. From the first hire to the first budgetary report, your business could experience an excess of downtime while trying to calibrate your accounting needs.
Fractional accounting has a nearly instant turnaround. Once you connect with your outsourced digital accounting team, you can have full services online within a few business days.
What Business Advantages Does Fractional Accounting Offer?
Besides a wide range of financial incentives, fractional accounting may also offer your business several advantages to push your venture to the next level. Fractional accounting is not just a means of saving money; it is also a practical way to prioritize the most important aspects of your business while encouraging maximal growth and efficiency.
Consider the following ways fractional accounting may impact and improve your business overall:
- Highly experienced experts – You may be surprised to learn that fractional accounting services may provide a higher level of expertise than a standard accounting department. When working with a fractional accounting team, you can expect to deal with financial professionals with a high level of experience in your industry, ready to provide actionable knowledge and data.
- The very best tools – There is a vast array of digital tools available to financial professionals, and you can expect top-of-the-line fractional accounting services to have access to the very best. Through their expertise, your fractional accounting can provide suggestions backed up with real-time data to help increase your bottom line and hit your short and long-term goals.
- Consistency and loyalty – Financial experts are in high demand. While it may seem beneficial to build an in-house team of accountants, you always run the risk of losing talented team members to other businesses, slowing down your business as you restaff. You can expect your fractional accounting team to be fully committed to your venture, ensuring more consistency and fewer fluctuations.
Determining whether fractional accounting is ideal for your business means addressing a few factors. Fractional accounting is often most practical for small and medium-sized businesses, though even international corporations could benefit from fractional accounting services.
Fortunately, the risk of exploring these services is quite low. You can begin a conversation with a fractional accounting business, learn more about their specific services, and follow up once you have determined the best path for your venture.
Find The Best in Fractional Accounting at CFO Hub
With low cost and high benefits, it is no surprise that many start-ups and businesses are looking to fractional accounting services to secure their financial needs. Fractional accounting can streamline payroll, invoicing, balance sheets, and business planning while mitigating overall costs.
Interested in exploring your options? Visit CFO Hub today.
With a full suite of financial services—including accounting, financial management, compliance, and due diligence readiness—CFO Hub combines the best of fractional accounting and improves on it. If you’re eager to explore fully outsourced and integrated financial services, you can connect with us and enjoy a free consultation.