What Does An Outsourced Fractional Controller Do?

Many small to mid-sized companies today are turning to outsourced fractional controller services to help manage their financial operations. These services give businesses the expertise of a full-time financial professional without overhead costs.

Fractional controllers play a big part in shaping the financial direction of a company. Their responsibilities may differ depending on the business’s industry, needs, and structure. Meanwhile, their main role is centered around financial oversight.

Let’s examine what an outsourced fractional controller does and how these professionals help companies achieve financial success.

The Basics of an Outsourced Fractional Controller

A fractional controller acts like a full-time controller but on a smaller scale, tailored to the needs of small and mid-sized businesses. These professionals bring years of experience in managing finances and keeping companies financially stable.

Fractional controllers handle key tasks like overseeing accounting, analyzing data, creating budgets, managing cash flow, and guiding decisions. One of their main jobs is financial reporting. They make sure financial statements are ready on time and accurate to give a clear picture of a company’s financial health.

A skilled fractional controller can take complex financial data and explain it in simple terms. This helps non-financial team members understand and use the information.

They also advise company leaders by reviewing financial trends and statements. Whether a business wants to cut costs, increase revenue, or plan for growth, their input is key to making smart decisions.

Budgeting and Forecasting

Another key responsibility of an outsourced fractional controller is budgeting and forecasting. These professionals develop budgets that guide a company’s financial planning and give a clear picture of its financial future.

Budgeting goes beyond just estimating income and expenses. A fractional controller will deliver a roadmap showing where the money goes to spot areas for improvement or re-evaluation.

This budgeting role is connected to forecasting – predicting the future performance of the business. With historical data, market trends, and financial insights, fractional controllers provide forecasts to guide better decisions.

They make sure the business’s financial goals align with its operations by setting clear budgets and realistic forecasts. This approach helps the business stay on track, avoid overextending, and make informed decisions. It also helps businesses maintain long-term financial stability and grow steadily.

Cash Flow Management

Managing cash flow is a common challenge for small and mid-sized businesses. The controller monitors cash flow closely to keep enough capital available for daily needs like payroll, utilities, and supplier payments.

If a business doesn’t manage cash flow correctly, it could face liquidity issues. A fractional controller assesses the timing of both cash inflows and outflows. They will work with leadership to make adjustments when necessary.

Professionals use software, such as Sage software, to track financial transactions and keep the business running smoothly. Maintaining a positive cash flow requires the use of strategies to minimize late payments, accelerate invoicing cycles, and make more efficient payment decisions. A fractional controller is skilled in balancing this delicate process.

Tax Compliance and Filing

The controller helps the company deal with the complex world of tax laws and tax filings. They help it remain compliant with federal, state, and local tax regulations.

An outsourced fractional controller stays current on changing tax regulations to offer businesses the right guidance and prepare the necessary filings. Proper tax filing reduces the risk of penalties and helps the business remain in good standing with the IRS.

In this function, fractional controllers might also make recommendations on tax strategies that help save money in the long term. With their knowledge of tax law, these professionals work to protect businesses from mistakes that could result in overpayment or audits.

Audit Support and Risk Management

Fractional controllers also assist in the audit process and help reduce risk. Companies often undergo audits either voluntarily or as required by external agencies.

An outsourced fractional controller prepares the business for audits by gathering relevant financial documentation. They make sure of proper record-keeping and provide detailed explanations of financial activity.

Their job is to minimize disruptions during the audit process so that everything is in order before the auditors arrive. In case of any issues arising during the audit, fractional controllers handle the situation with the auditors and work to resolve it quickly.

Risk management is also important. The fractional controller will look for potential risks for the business and offer ways to reduce or eliminate them. They help businesses safeguard their finances with appropriate controls and sound business practices.

Software Knowledge for Efficiency

A proficient outsourced fractional controller is highly skilled in using advanced software to optimize the financial management process. Many businesses rely on these software solutions to track financial data, reconcile accounts, and generate financial reports.

A controller’s familiarity with these tools adds value to their ability to manage finances well. No matter if the business wants to scale or grow its operations, the professional will easily adapt to different financial software systems.

From Sage to NetSuite and QuickBooks, they bring hands-on experience to the software that fits the business’s needs. Their knowledge of these systems helps businesses run more smoothly and guarantees accuracy in day-to-day operations. With the right tools, they help save time and avoid costly mistakes.

How Plumb Can Assist with Our Outsourced Fractional Controller Services

Plumb knows that financial operations can be difficult for growing companies. We specialize in outsourced accounting and have had the opportunity to work with businesses across industries. Our expertise spans using top-tier platforms to manage client finances accurately and effectively.

We focus on supporting our clients in the best ways possible by tailoring our services to meet their industry needs. Our seasoned team, driven by our 13 guiding principles, creates financial solutions to help business leaders confidently move forward with their strategic goals.

If you’d like to better manage your company’s finances without the costs of a full-time controller, please use our online form to reach out today.