Why a Fractional Controller for Marketing Agencies is Critical for Growth

If your marketing agency is experiencing rapid growth or facing increasingly complex finances, it may be time to bring on a higher-level accounting resource who can provide strategic oversight of the agency’s accounting function and ensure robust internal controls and financial processes are established -responsibilities typically managed by a controller.

However, budget constraints can make hiring a full-time senior leader impractical. This is where the concept of a fractional controller—outsourcing this role on a part-time basis—becomes a viable option. Fractional controllers can provide the oversight needed at this stage of a company’s growth, delivering expert financial management and operational insights without the expense of a full-time executive. 

Engaging a fractional controller enables your agency to maintain a sharp focus on growth and client success while mitigating risks that could arise from financial inaccuracies, lack of internal controls, and regulatory non-compliance.

What is a Fractional Controller?

A fractional controller is a financial professional who provides part-time or project-based financial management services to businesses. Controllers offer high-level financial expertise without the financial drain of a full-time employee. Fractional controllers can help marketing agencies improve their financial management, cash flow, and strategic planning. 

How a Fractional Controller Differs from a CFO

There’s often confusion regarding the role and responsibility of a CFO vs. a controller. A CFO provides strategic financial planning, risk management, and business development guidance for the business and typically has more extensive knowledge in strategic financial management and decision-making, including the ability to analyze complex financial data. The role of a CFO is broader than a controller and includes future planning, economic forecasting, and high-level financial reporting.

In contrast, a controller focuses more on day-to-day accounting operations, including overseeing accounting staff, managing the preparation and integrity of financial statements, and ensuring compliance with regulatory requirements. Controllers usually have significant accounting experience but may not be involved in broader strategic planning like a CFO.

In a nutshell, a controller focuses more on operational efficiency, controls, and accuracy in financial reporting whereas a CFO’s primary responsibility is strategic leadership and financial planning and growth. For more details on the different financial roles, check out our Comprehensive Guide for Businesses article.

Benefits of Hiring an Outsourced Fractional Controller

There are clear benefits of having a controller on your accounting staff, but not every business is in a position to hire one full time. That’s when a part-time or fractional controller may make sense. Working with a controller on a part-time basis is a cost-effective option that enables an agency to access high-level expertise without committing to a full-time salary and benefits. 

Working with an outsourced controller means improved financial management, cash flow, and strategic insights and planning, with the flexibility to scale up or pull back as the needs of your agency ebbs and flows. Working with an outsourced controller on an as-needed basis enables your agency to tap into senior-level experience without breaking the bank. The timely insights and accurate data can help position your agency to minimize risk and ensure a healthy cash position so you can seize new revenue opportunities.

Cost Effectiveness and Flexibility

Hiring a full-time controller in the U.S. can be expensive. According to Indeed.com, the average annual salary for this role is around $115,000. However, salaries vary significantly, typically ranging from $80,000 to $166,000 based on experience, industry, and specific skills required. Including bonuses and benefits, total compensation for a controller can surpass $200,000 annually, reflecting the importance of the position.

Opting for a part-time or fractional controller offers significant cost savings and flexibility for agencies that are not ready for a full-time resource. This approach allows businesses to scale controller services to their needs without committing to the full overhead associated with a full-time salary and benefits package.

Technical Expertise

One of the key advantages of engaging a fractional controller is their deep technical expertise. A skilled fractional controller brings up-to-date knowledge of cutting-edge software and accounting technologies, eliminating the need for your team to undergo and keep up with training.

This expertise extends to the latest accounting standards, ensuring your business remains compliant and informed about current industry trends. With a fractional controller, you not only gain a strategic advisor but also a specialist who keeps your financial operations up to date, both from a technology perspective and accounting standards and best practices standpoint.

Improved Efficiency and Productivity

A fractional controller can significantly improve efficiency and productivity within an organization by streamlining financial operations, optimizing processes, and implementing best practices. By leveraging their expertise, businesses can reduce waste, eliminate inefficiencies, and allocate resources more effectively. This, in turn, can lead to increased profitability, improved cash flow management, and enhanced decision-making capabilities.

Some key areas where a fractional controller can drive efficiency and productivity include:

By focusing on these key areas, a fractional controller can help marketing agencies optimize their financial operations, improve cash flow management, and ultimately drive growth and profitability.

How a Fractional Controller Can Drive Growth

A fractional controller can play a critical role in driving growth for an agency by providing high-level financial expertise, strategic planning, and financial management. By leveraging their expertise, agency owners can:

By leveraging the expertise of a fractional controller, marketing agencies can drive growth, increase client satisfaction and retention, improve financial management, and position themselves for long-term success.

Traits to Look for in an Outsourced Fractional Controller

Finding the right fractional controller is important and there are some key characteristics that an agency owner should prioritize to ensure you find the right resource for your agency.

Strong Financial Acumen and Analytical Skills

One of the most important traits in a controller is proven experience in financial management, reporting, and analysis. A part-time controller with a minimum of five years’ experience, ideally in a similar industry, is critical in ensuring the controller understands the nuances of your business and can provide insights and advice based on experience.

A key question to ask during the interview process is “How have you improved the financial reporting process in your previous roles?”. You can also ask the candidate to provide an example of a financial forecast that they developed and how it specifically helped guide decisions within the company.

Excellent Technical Skills

It’s also important that the fractional controller has expertise in current accounting software and can illustrate how they stay up to date on the latest technologies.

Equally important is the candidate’s proactive efforts to stay up to date on the latest accounting standards and tax regulations.

A key question to ask during the interview process is “What specific actions do you take to ensure that you’re up to speed on the latest accounting software, accounting trends, and tax regulations?”.

Cultural Fit and Leadership Skills

While the outsourced controller is not a full-time hire, it’s important that the controller mesh with other leaders and employees at the agency because the role requires interaction with many different departments.

Effective communication is necessary as controllers often need to explain complex financial concepts to non-financial staff. This requires understanding and integrating into the company’s communication style to build trust and collaboration. In addition, cultural fit means the controller understands the nuances of the company’s personality, understands their motivations, and can navigate internal politics and manage potential conflicts effectively to help the agency achieve their long-term goals.

Conclusion

A fractional controller offers your agency the expertise of an experienced financial professional on a part-time basis, similar to the role of a fractional chief financial officer. Fractional controllers bring their extensive knowledge and skills to enhance your agency’s financial operations, without the hefty price tag of a full-time hire. With a fractional controller, you can expect accurate financial reporting, budget planning, cash flow management, internal controls, strategic guidance, and more. They will work closely with your team to streamline processes, identify cost-saving opportunities, and improve profitability. By leveraging the expertise of a fractional controller, your marketing agency can stay focused on driving growth and delivering exceptional results to clients while having peace of mind that proper financial processes are in place and financial reports are accurate and reliable.

Bringing on a controller is an exciting step for any business, but it can be overwhelming if you’re not prepared. If you’re looking for a partner that can provide outsourced accounting services including fractional controller and fractional CFO services, reach out to the accounting experts at AURA for a complimentary consultation.