Fractional accounting

Making the Right Choice: Full-time vs. Fractional Accounting

Making the Right Choice: Full-time vs. Fractional Accounting

The choice between fractional CFO or full-time staff in back-end processes is a much-debated subject in the business community. Whether it be IT, accounting, or customer support, there is no shortage of arguments in favor of either side. 

Ultimately, every business owner must make the best decision for their company. This is especially relevant for accounting, with all the sensitive data and discretion involved.

To that end, we thought: why not make that process easier?

In this blog, instead of telling you what to do, we will be compiling and laying down all the arguments for and against full-time and fractional accounting. What you can expect by the end is a clear picture of what the future might look like, should you choose one over the other. 

So, buckle up and give us just five minutes of your time. Trust us, it’s better to take five minutes now and make the informed choice than look back five years from now and regret not doing so.

Full-time vs. Fractional Accounting

Getting to the point, let’s get our definitions straight.

Full-time accounting is when you hire a professional accountant to work in-house or remotely for the workday. They are present from opening to closing and are always available to manage your accounting needs. 

The traditional image of an accountant working a 9-5 job for a dedicated business.

Fractional accounting, on the other hand, can be best understood in various ways. For some businesses, a fractional accountant may be a remote, part-time accounting resource retained through a fractional accounting and CFO service provider.

 For others, it may be an outsourced accounting professional hired to handle the accounting needs of a single business project.

As such, the best way to categorize fractional accounting would be as accounting services on an as-needed basis. Maybe your business has its bookkeeping dealt with without a professional accountant, and you only need one when it’s time for taxes and audits. 

Perhaps you have a rather big project happening and need financial clarity and advice, but outside of that don’t need any help. Whatever the case may be, fractional accounting could fill that need.

Full-time vs. Fractional Accounting

Fractional CFO Vs Full time CFO

Focus and Dedication

The biggest point in favor of full-time accounting is the undivided attention you get from your accounting partner. They are hired exclusively for your business and don’t have their hands tied with other obligations. 

On the flip side, fractional accounting suffers from divided attention due to the contractual nature of it. Fractional accountants typically have simultaneous contracts with multiple businesses. So they are not always focused on your finances. For example, your fractional accounting partner may get distracted during work hours because they have to manage multiple businesses and their accounting. 

While accounting software like QuickBooks Online Accountant mitigates this issue, the core problem remains that your accountant may be spreading themselves thin between multiple clients and giving subpar service to each.

The Cost

No surprise to anyone, a full-time accountant will make a considerable dent in your business’ budget. Looking at the numbers from Glassdoor, your pockets will be around $67,793 lighter annually, and that’s just the average cost before benefits and other costs. You can expect the bill to hover around about $80,000 a year, by a conservative estimation.

Fractional accounting, on the other hand, is far more lenient on the cost. There is no real average cost for fractional accounting, given the nature of it being outsourced, typically remote work on an as-needed basis. 

What we can say, however, speaking as an outsourced accounting services provider, is that businesses can expect up to 60% savings in payroll when opting for fractional accounting. And the cost could be even lower, depending on the job. When it comes to cost, especially in the case of small businesses and start-ups, fractional accounting is often the only option open to be pursued.

Skill Gap and Expertise Diversity

While cost is important, there is no denying that what matters most is the quality of services provided. Fractional accounting services typically match full-time accounting, so it comes down to the matter of skill gap and expertise diversity. 

Accounting is a heavily specialized profession and hosts a multitude of complicated processes that need to be managed. An accountant may be an expert at taxes but may not be as helpful in audits. 

Maybe your accountant has amazing forecasting knowledge but does not offer good financial advice. Maybe you are running a restaurant and need restaurant accounting expertise, but your accountant specializes in Amazon accounting

Whatever the situation, the bottom line is that no accountant can do everything. There will always remain a skill barrier somewhere. The question is, how can we overcome that barrier effectively?

Looking at it logically, the answer would be through fractional accounting. Instead of retaining one full-time accounting professional, why not hire a variety of professionals with a wide selection of expertise? When tax season rolls around, get the tax specialist on board. 

When making big financial decisions, get an industry expert accountant on the line for sound advice. This may sound nice, but you might wonder how such a seamless transition works.

The answer is outsourced accounting services, specifically fractional CFO and accounting services providers. By enlisting the aid of such a service provider, you can simply hand them a list of requirements for your fractional accountant. They will find you a good pool of candidates to pick from. If you had just one full-time accountant, you would be forced to enlist a second fractional accounting resource to fill any skill gaps. 

Teamwork and Company Culture

One area where full-time accounting has an edge over fractional accounting is the potential for strong teamwork and company culture. A full-time accounting professional will typically be with you for years and be deeply connected within company ranks. They will be familiar with company culture and meld seamlessly with the team through shared experience. 

When it comes to fractional accounting, this can be difficult. We cannot assert that fractional accounting leads to poor company culture and teamwork. The plain truth is that fractional accounting resources are typically contracted for short durations. 

With frequent professional substitutions to fill skill gaps, there is often insufficient time to foster culture and teamwork.

Still, there is a regular level of teamwork and cooperation but not an intimate understanding between colleagues, which may or may not be important to you as an entrepreneur. 

Key Takeaways

Fractional Accounting Full-time Accounting
Dedication and Focus Fractional accountants are typically less dedicated by working with multiple clients simultaneously. Full-time accountants are committed to one business and are typically much more focused.
Cost Fractional accounting is far more cost-friendly Full-time accounting can quickly rack up a massive bill.
Skill Gap and Expertise Fractional accounting is far more effective at filling skill gaps and providing diverse expertise. Full-time accounting is much slower at filling skill gaps and finding the right expertise may not be possible.

Company Culture
Fractional accounting engagements typically do not last long enough to foster company culture. Full-time accounting is very conducive to team culture fostering thanks to longer engagements.



Brevity is the soul of wit, so we will leave the comparison at that. Whether you hire an in-house full-time accounting professional or enlist the aid of a fractional outsourced accounting services provider, we wish you the best of luck. Stay informed, stay ahead.