How Fractional CFO Services are Beating the “Big Four” Accounting Firms

Chris Giorgio

How Fractional CFO Services are Beating the “Big Four” Accounting Firms

In the business world, accounting is among the most frequently outsourced tasks. Even the most experienced business owners are often entirely unqualified to manage their books on their own. In order to protect themselves from possible liabilities and improve their bottom lines, many business’ accounting responsibilities will be delegated to a team of experts.

For years, the accounting industry has largely been dominated by the “big four” accounting firms. However, while these firms—KMPG, Ernst & Young, Deloitte, and PricewaterhouseCoopers—still play a dominant role in the accounting industry, their status has been rapidly changing. Thanks to the proliferation of the digital accounting space, businesses everywhere are discovering they have more options than ever before.

Recently, fractional CFO services have begun playing an increasingly important role within the greater accounting industry. By offering their services on an “as needed” basis, these firms can help businesses grow without the need for developing their own accounting department. Very quickly, the benefits of using outsourced CFO services can really begin to pay off and turn your accounting department in to a profit center.

In this article, we will discuss the most important things for you to know about fractional CFO services. By understanding how these (mostly) digital firms have been disrupting the accounting industry, you’ll be able to determine if their services make sense for your business.

Helping Businesses Scale their Accounting Services

One of the issues with working with a non-scalable accounting firm is that your business will often end up paying for services it simply doesn’t need. Though they do offer a certain level of personalization, none of the big four firms make it easy for small firms that only have one or two accounting needs. In general, these smaller firms are asked to go “all or nothing” while paying a premium on hourly work leaving small businesses with large accounting bills each month.

By using an outsourced CFO, your business can adapt its approach to accounting as it grows over time. At first, you might just want an accountant that can help you with tax issues. As time goes on, you might want help managing additional books, setting up your first eCommerce store, budgeting for long-term projects, and completing various other tasks.

Only you can truly know what is right for your business at this time. If you’re unsure about what your accounting needs are, consider meeting with an accounting specialist and discussing your available options.

Entering the World of Digital Accounting

In a world where seemingly all aspects of the business sector are moving in a digital direction, accounting is certainly no exception. Today’s best and most affordable accountants operate almost entirely in the online space. In fact, it’s not uncommon for many business owners to have never met their accountant in person.

By working with a e-commerce accounting specialist, you can set up a digital platform that can be accessed from anywhere in the world. Doing things such as managing your books and updating financial reports on the go, for example, is now easier than ever before.

One of the most important components of digital accounting is setting up a platform that both you and your accounting team will be comfortable using. These platforms can easily be adjusted to address your personal tastes as well as the changing dynamics of your business. Digital accounting is one of the easiest ways for businesses to cut out overhead costs.

Cutting Costs—without Sacrificing Quality

Naturally, one of the most common reasons businesses hire an accountant is to reduce the overall cost of running a business. Though accounting services will inevitably need to be paid for, by working with the right firm, you can significantly improve your bottom line.

There are quite a few ways an accountant can potentially save you money. One of the main ways is through the use of effective tax strategies. The best accountants will be familiar with tax credits and tax deductibles that can strategically reduce the amount of money you owe to the government. At the same time, these accountants will also have the awareness needed to avoid triggering a tax audit.

Additionally, your outsourced CFO can also take a look at your financial statements and find ways your business can save money. You may have redundant or unnecessary costs that you can eventually get rid of. You may also be able to invest excess capital in places that yield a steady return on your investment.

Creating Customized Accounting Solutions

In addition to offering scalable accounting solutions, today’s top digital accounting firms also offer customized accounting solutions that are specific to your business. Usually, your relationship with your digital CFO will begin with a phone call where you discuss your business’ current needs, concerns, and financial objectives. From there, the team will work diligently to ensure that you have an accounting solution that is right for you.

Being able to pick and choose accounting services “a la carte” will make it much more likely your business is satisfied with your accountant. In a world where many new businesses operate using a sophisticated financial model, it is only natural that these businesses will want sophisticated, personal accounting solutions.

Finding the Fractional CFO that’s Right for Your Business

A “fractional CFO” is someone who can perform all the traditional services of a CFO, yet only works for your specific business a fraction of the time. These individuals make it possible for newer or smaller businesses to have access to the expert CFO advice they need without having to pay a $300,000 annual salary. The main issue, it seems, is finding the fractional CFO that’s truly right for your business.

Fortunately, finding the perfect fit is easier than you might assume. With a little bit of research, you should be able to find various accounting partners that can help your business. Look for businesses that have worked with businesses that—at least structurally speaking—are comparable to your own.

Once you have a list of a few fractional CFOs you are considering hiring, you’ll want to take some time to ask each of them questions. Asking about pricing, the accounting experience, and ways they can add value to your business will make you much happier with your final decision.

Conclusion – Fractional CFO Services Beating the Big Four

As long as your business is accruing daily transactions, you’ll need an accountant who can help you along the way. While many older businesses still rely on the big four accounting firms, newer businesses can offer value in their own authentic way. Because of these benefits and more, there is no surprise that many new businesses are choosing digital, scalable, fractional CFO services.

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