Many fledging business require the assistance of a professional accountant, but have neither the need for full-time help nor the financial resources to justify hiring another employee. Outsourcing to a “fractional” accountant through Pro Back Office offers businesses an effective and affordable alternative.
Outsourced accounting services are gaining in popularity among businesses of all types and sizes, due in large part to their affordability, convenience, and flexibility. Outsourcing fractional accounting is especially popular among smaller business and start-ups, where a lack of working capital is often a major concern. By outsourcing, you have the right person doing exactly what they are good at, at every level.
Managers seek the services of fractional accountants when they ultimately recognize the need for skills that are beyond the in-house bookkeeper’s capabilities. The client pays the outsource provider an hourly fee based upon the scope of the services rendered and the amount of time the fractional worker devotes to helping the business.
Outsourcing to a fractional accounting firm is an efficient and economical means of acquiring the knowledge and experience it takes to move a business forward. This can be a substantially less cost than bringing a new employee into the organization. Outsourcing also avoids the hassle and expense of hiring, training and maintaining an in-house accountant, who is likely not going to be good at everything you ask them to do. You don’t want a staff accountant trying to be the CFO, and you don’t want a full-time controller doing staff accounting work.
Differences between Part-Time Accountants and Fractional Accountants
Fractional workers are often confused with part-time employees. Although they share some similarities, there are also distinct differences.
Businesses contract fractional accountants through firms like Pro Back Office. The accountant’s schedule is arranged in a manner that allows him or her to assist multiple clients during the week. A major difference between part-time and fractional employees is that part-timers usually work for a single organization, whereas it is quite common for a fractional worker to simultaneously assist more than one organization. This means their experience level and ideas on how to improve efficiency is heightened.
According to Chrom, another difference that separates fractional from part-time accountants is that a part-time employee is paid directly by the business, whereas an outsourced fractional accountant is paid by the outsourcing firm. The firm is reimbursed by invoicing the client for the fractional accountant’s time and services at a pre-agreed hourly rate or flat monthly fee. The firm, not the company, pays for the overhead associated with the consultant, such as PTO, 401K, health, dental, vision, workers’ compensation, etc.
A part-time account’s employer will withhold payroll taxes, file returns and report the earnings to the IRS and state & local taxing agencies by issuing W-2 forms at the end of the year. A business can avoid these and other time-consuming burdens imposed by governmental agencies by arranging for a fractional staff accountant through a reputable outsourced firm. Some part-time workers may also receive employee benefits, such as health insurance, paid vacation time or annual bonus, but by retaining a fractional staff accountant, the business does not need to concern themselves with these potentially costly items.
Another benefit of retaining fractional assistance is built-in flexibility. Owners or managers can easily revise the fractional accountant’s schedule by simply increasing or decreasing their working hours or scope of services they provide, depending upon the demands of the business at any given time.
Arranging part-time accounting assistance is quick and simple. It begins with contacting and discussing your needs with one of Pro Back Office’ s experienced professionals at either our San Diego headquarters or our recently opened Phoenix office. Your unique situation will be carefully analyzed, and a customized plan will be created which will address your business’s accounting-related issues and fits within your budget. You just might be surprised at how affordable and effective it is to outsource your accounting and HR departments to PBO.