What is a Fractional Bookkeeper?

We’re going to walk you through the types of questions to ask yourself to determine what level of need your business has in keeping it's financial information organized and useful for your business and it's potential growth. If you feel that you know where you are at and know that you need bookkeeping help, contact us so that we can setup a free initial books review and give you an idea of the potential cost of hiring Clarity Bookkeeping Services for your remote fractional bookkeeping needs.

If you aren't sure of your current bookkeeping needs, let’s dive deeper into understanding how a fractional bookkeeping role differs from a full-time bookkeeping role and when you need which to achieve your business goals!

​Fractional Bookkeeper Defined

A fractional bookkeeper (also known as a “consulting bookkeeper” or “outsourced bookkeeper”) is a bookkeeper who works in a less than full-time capacity, which can include:

• Ongoing part-time work (ex. doing 15 hours of bookkeeping/accounting work each week)

• Short-term work (ex. offering bookkeeping/accounting additional support temporarily during an audit or business project that has significant bookkeeping/accounting needs)

• Interim work (ex. filling the gap after an accountant has left until a replacement can be hired)

A fractional bookkeeper can easily work remotely if you choose a fractional accountant with remote work experience and a highly organized skill set and is treated as an independent contractor rather than a full-time employee, saving you money and hassle of payroll tax and payroll processing.

Ideal Use Case Scenarios

There are many reasons to hire a fractional accountant instead of opening up a full-time role! Hiring a fractional accountant is a great option for a startup or small business that has bookkeeping and accounting needs, but those needs don’t necessarily necessitate a full-time role yet. A fractional accountant can be hired to handle some or all of a company’s accounting activities as a steppingstone until they grow enough to require a dedicated person in this role. Fractional work in this scenario offers a cost-effective, flexible solution that can grow with the business. For larger companies that already have a full-time accountant or accounting team a fractional accountant can be brought into the role in an interim capacity to fill the gap when an accountant is lost unexpectedly to something like medical leave, a better opportunity, or family emergency. A fractional accountant can be brought in very quickly in this kind of situation to prevent business disruption. Additionally, a fractional accountant can be brought in to augment an existing team’s capabilities when there is a significant increase in accounting work to handle overflow work.

Key Questions

When deciding between a fractional accountant and a full-time accountant, ask the following questions:

• How much work do we have for this role now and how much will we have in the foreseeable future?

•  How long will we truly need this resource?

• What is the budget for bringing someone in?

When there’s not enough work to justify the cost of a full-time employee, the company’s needs are short-term, or the hiring budget is limited, hiring a fractional accountant is going to be your best option!

The Benefits of Fractional work

One of the biggest benefits of hiring a fractional accountant is cost efficiency. When a full-time accountant is hired in-house, their employer incurs the following expenses:

• Recruiting costs – searching, verifying credentials, running background checks, relocation (when needed), signing bonus, onboarding, training

• Employment costs – salary, health insurance, paid time off, retirement benefits, employment taxes, performance bonuses

The overall cost of hiring an accountant will include all these kinds of expenses. Subsequently, it usually shocks employers when they analyze discover that an accountant’s salary is only around 70% of their total cost to their employer. The rest of the cost is comprised of other employee-related expenses, which can be very steep initially and continue to add up over time. One way to avoid this significant ongoing expense is to hire a fractional resource instead.

Using a fractional accountant ensures you only pay for what you need when you need it. It’s a la carte accounting at its finest! And because you only pay for as much or as little time as you need, it allows flexibility for companies as they grow and expand over time. By using an outsourced solution instead of hiring in-house, companies can turn what would have been a high fixed cost into a more manageable variable cost, to improve cash flow management. 

​How to Make a Fractional Model Work

If you’re skeptical about using a fractional accountant, go slow and take the steps needed to ensure it will be a successful fractional engagement:

• Clearly define the scope of work before anyone is brought into the role.

• Establish bookkeeping/accounting deliverables and deadlines.

• Utilize an accounting policies and procedures manual to guide all activities.

• Encourage frequent, thorough, and proactive communication.

• Time the use of a fractional resource to align with important accounting activities and deadlines.

• Provide thorough IT support for all accounting/finance technology.

• Ensure fractional employees are treated as independent contractors instead of employees in terms of how compensation is handled and what is expected of them.

When you need a fractional accountant, we can help! Our small team of US-based bookkeepers have experience with companies across all industries and growth stages, which provides them with tremendous expertise to draw on when coming alongside new clients. We’ll meet you where you are to provide accounting services that are customized to your needs and goals. The part-time accounting services we offer can supply as much or as little support as you need to keep your business running smoothly. Schedule a free books review today and we can help you determine your bookkeeping and accounting needs.