Understanding Outsourced Fractional Controllers: Benefits and Key Traits

A financial controller is an important position within any organization that oversees accounting operations and guides financial decision-making. But not all businesses—especially small to mid-sized enterprises (SMEs)—can afford an in-house financial controller. 

Fortunately, there’s another option. Many organizations and freelancers offer outsourced fractional services, providing an experienced controller on a part-time basis. 

In this article, we will dig into what an outsourced fractional controller is, the benefits they bring to the table, and some of the best outsourcing companies you can partner with.

What Is a Fractional Controller?

A fractional controller is a seasoned financial professional who offers their services to multiple organizations on a part-time, contract basis. 

This allows businesses to access high-level financial insights and oversight without the expense and commitment associated with a permanent position. 

Not every business needs a full-time controller, and the fractional approach enables them to scale financial expertise up or down depending on the company’s evolving requirements. 

What Does a Fractional Controller Do?

A fractional controller wears many hats, providing a wide range of financial and accounting services tailored to the specific needs of an organization. 

Here are some of the key responsibilities and tasks that a fractional controller typically handles:

Financial reporting

One of the primary duties of a fractional controller is to ensure accurate and timely financial reporting. This includes preparing monthly, quarterly, and annual financial statements.

These reports are crucial for internal decision-making and providing transparency to stakeholders, including investors and lenders.

Cash flow management

Cash flow is the lifeblood of any business, and managing it effectively is essential for sustainability and growth. A fractional controller monitors and forecasts cash flow, ensuring the company has sufficient liquidity to meet its obligations. 

They implement optimization strategies, such as managing receivables and payables, and can advise on financing options when necessary.

Financial forecasting

Predicting future financial performance is vital for strategic planning. Fractional controllers develop financial forecasts based on historical data, market trends, and business goals. 

These forecasts help you anticipate potential financial challenges and opportunities, enabling your organization to make more strategic decisions and plan for future growth.

Budgeting and financial planning

Fractional controllers work with various departments to develop annual budgets that align with your company’s strategic objectives. By tracking actual performance against the budget, they identify variances and offer recommendations for corrective actions, ensuring that financial resources are used efficiently.

Process improvement

Fractional controllers are also instrumental in process improvement. They assess existing financial processes and systems, identifying inefficiencies and areas for enhancement. 

By implementing best practices, they streamline operations, reduce errors, and enhance overall financial management. This continuous improvement can lead to significant cost savings and better overall performance. 

6 Benefits of Hiring an Outsourced Fractional Controller

Hiring an outsourced fractional controller has several advantages, particularly for SMEs that need to balance financial expertise with budget constraints. 

Here are six key benefits:

1. Cost effectiveness

One of the primary benefits of hiring an outsourced fractional controller is cost efficiency. Full-time controllers come with significant costs, including salaries, benefits, taxes, and overhead. 

A fractional controller provides the same level of expertise on a part-time basis, allowing you to pay only for the services you need. Rough estimates place the savings this model can provide over hiring a full-time employee at 30–40%, which can be especially beneficial for businesses with tight budgets.

And this is before considering the additional savings that come from outsourcing to more cost-effective regions where living costs are lower.

2. Reliable financial reporting

Accurate and timely financial reporting is crucial for making informed business decisions. An outsourced controller ensures that your financial statements are prepared regularly and comply with industry standards. 

Reliable financial reporting can enhance investor confidence, assist in securing loans, and provide a clear picture of your company’s financial health.

3. Improved efficiency

Fractional controllers bring a wealth of experience and proven methodologies to your organization. They can streamline your accounting processes, implement efficient financial systems, and use best practices to optimize operations. Higher efficiency translates into better resource management and potentially greater profitability.

4. Cross-industry expertise

Fractional controllers often work with clients from various industries (sometimes even offering outsourced CFO services), enabling them to bring a wide range of experience and insights to the table. 

They can identify potential pitfalls, recommend best practices, and leverage their broad knowledge to offer innovative financial solutions.

5. Flexibility in engagement duration and scope of work

One of the most appealing aspects of hiring an outsourced fractional controller is flexibility—you can customize the engagement’s duration and scope based on your needs. 

Whether it’s a few hours a week, a specific project, or seasonal work, you can adjust the arrangement to suit your situation. This adaptability is invaluable for companies undergoing growth, change, or temporary challenges.

6. Allows focus on core operations

By outsourcing financial oversight to an experienced fractional controller, business owners and key executives can focus on what they do best—running the core operations of the company. 

Delegating complex financial tasks to an external financial expert ensures they are handled proficiently and frees up your time to concentrate on strategic initiatives and business development.

Traits To Look For in an Outsourced Fractional Controller

The right fractional controller will have a blend of technical expertise, soft skills, and organizational alignment. Here are some traits to look for:

Strong financial acumen

A top-notch fractional controller possesses deep financial knowledge and understanding. They should be well versed in accounting principles, financial reporting standards, and regulations. 

Their strong financial acumen enables them to provide accurate financial insights, make sound judgments, and guide strategic financial planning.

Analytical and problem-solving skills

The ability to analyze complex financial data and solve problems effectively is a critical trait for any fractional controller. They must identify trends, diagnose issues, and propose actionable solutions. 

Excellent communication

Fractional controllers need to convey financial information clearly and concisely to various stakeholders, including executives, board members, and team members. They must be able to translate complex financial concepts into understandable terms and provide clear guidance on financial matters.

Attention to detail

Meticulous attention to detail ensures that a fractional controller can produce accurate financial reports and identify discrepancies before they become issues. Being thorough and precise in their work helps them maintain the integrity of financial data and supports reliable decision-making.

Cross-industry experience

A fractional controller with cross-industry experience brings a diverse set of perspectives and best practices to the table. Their exposure to different industries can help them identify innovative solutions and strategies that may not be apparent to someone with a more narrow focus. 

Considerations When Hiring an Outsourced Fractional Controller

Choosing the right outsourced fractional controller requires careful evaluation to ensure they align with your business needs and goals. Here are some things to keep in mind during the hiring process:

Company size and needs

Smaller companies might need only basic financial oversight, while larger ones could benefit from more comprehensive services. Assess whether you need a fractional controller for day-to-day financial management, strategic planning, or both.

You might even find that your needs extend beyond a controller to include an outsourced CFO executive search for more strategic financial guidance.

Budget

Financial constraints always play a significant role in the decision-making process. While it’s important not to compromise on quality, an outsourced fractional controller should provide cost-effective solutions compared with a full-time hire. 

Clarify the pricing structure, whether it’s hourly, project-based, or retainer fees, to avoid any hidden costs.

Hiring from outsourcing locations like Latin America (LatAm) can be a cost-efficient strategy, as LatAm’s accounting salaries are much lower than those in the US. 

Contract terms and agreements

Pay close attention to the terms and conditions of the contract with your fractional controller. Define the scope of work, duration of engagement, payment terms, and termination clauses clearly. 

Ensure there is a mutual understanding of expectations and deliverables. The contract should allow flexibility to scale fractional controller services up or down as your business needs change.

Industry-specific expertise

A fractional controller with experience in your industry can add significant value. They are likely to be more familiar with industry-specific regulations, challenges, and best practices. During the interview process, inquire about their experience with companies similar to yours in terms of size and sector.

Reputation and track record

Finally, research the reputation and track record of potential fractional controllers. Look for testimonials, case studies, and references from previous clients. A proven history of successful engagements and satisfied clients is a good indicator of their capability and reliability. 

Top 5 Outsourcing Companies for an Outsourced Fractional Controller

We’ve created a list of five companies to help you find an outsourced fractional controller. The companies are in no particular order, as each has unique strengths and specializations. 

1. Near

Yep, we’re up first! At Near, we have a pool of over 35,000 vetted, English-speaking LatAm professionals with years of experience and specialized skills. In just 21 days, we can help you hire a perfect fit for any controller position, whether it’s part-time, project-based, or repeating seasonal contracts. 

We’ve even worked directly with a fractional CFO provider to boost their staff and allow them to pass on even more savings to clients. Kordis cut their normal recruiting time in half and saved over $100,000 in annual salaries by working with us. 

2. Pilot

Pilot offers bookkeeping, tax, and CFO services tailored for startups and small businesses. Its fractional controllers are deeply integrated into its clients’ financial operations, providing accurate financial statements and strategic advice. 

3. Kruze Consulting

Kruze provides outsourced finance and accounting to venture-backed startups. Its suite of offerings includes bookkeeping, tax, and CFO advisory services. Kruze’s experienced fractional controllers provide strategic financial guidance, helping startups manage their finances effectively and prepare for growth or funding rounds.

4. Amplēo

Amplēo offers fractional controller and CFO services aimed at driving financial strategy and operational efficiency. Amplēo’s team of seasoned financial professionals brings a wealth of cross-industry experience to help businesses navigate complex financial landscapes.

5. GrowthForce

GrowthForce provides outsourced accounting, bookkeeping, and controller services tailored to small and mid-sized businesses. The company focuses on integrating clients’ financial data with cloud-based accounting tools to provide real-time insights.

Final Thoughts

Outsourcing your fractional controller role is a cost-effective and flexible solution to gain the financial expertise you need without the commitment of a full-time hire. 

Ready to take the next step and hire the right professional for your company?

Book a free, no-commitment call with Near to discuss how our talent pool of experienced fractional controllers can meet your financial needs and help your business thrive. We can help you through the entire recruitment process, saving you 50–70% of your screening and sourcing time.