The key difference is this: fractional financial services provide a senior finance person working part-time within your business, whereas outsourced financial services outsource specific finance functions externally. The first offers strategic direction on a part-time basis, the second performs operational functions. Either way the costs are less than a full team, but the objectives vary.

That may seem like a fine point, but it alters your experience of the product. When comparing options, being aware of how Fractional Financial Services UK firms function differently from typical outsourcing is essential for selecting the correct solution instead of allocating resources to one that won’t serve your needs.

What fractional actually is?

What is a fractional finance professional: Once again, a fractional CFO is a highly experienced business professional working with your team for less time than a traditional full time employee would.

They are plugged into your team, thinking strategically and about the direction of your business. They will project forecast, guide fund raising, manage cash flow and be true ears and sounding board for any major decision.

Leadership is the phrase. You’re not just getting the task done; you’re also getting seniority, judgement and a person who takes a personal stake in your financial well-being. just not for five days in a row.

What outsourced really means

But, outsourcing financial services involves transferring a specific function to a third-party company. For example, bookkeeping payroll, accounts to date and tax submission.

It is in the operational, process-oriented aspect of finance that outsourcing is quick, dependable, and economical. But taking a function offshore is usually about getting the work done, rather than navigating the ship.

An outsourced bookkeeper will maintain your books, they won’t sit across a table from an investor or tell you whether you can afford to hire another employee. That’s someone else’s job.

Which one does your business need?

It depends on what problem you’re solving. Publishing? Backlogs? Plenty of admin? Little system reliability? Out-sourcing is a sensible, cost-effective solution. Fund-raising, rapid scaling, preparing to sell and strategic investment guidance?

Fractional finance the professional! In fact, the most successful growing companies tend to use them in tandem: an outsourced provider to take care of the operational details, and a fractional CFO over the top to guide and oversee strategy.

They aren’t competing; they often play the best together with the fractional I helping to ensure that any outsourced work actually contributes to your larger objectives.

Don’t pick because it sounds more affordable? Pick because it suits you. Outsourcing is a bandwidth solution. Fractional is a leader-ship solution. When you reidentify your gap,  the right solution becomes apparent.

Frequently Asked Questions

Is a fractional CFO the same as an outsourced CFO?

The phrase ‘fractional’ often refers to part-time, embedded executive staff leadership, whereas outsourced can have connotations of externalized, less involved service. In reality, any sound fractional CFO function would be strategic partnership, not a handoff.

Can I use both fractional and outsourced financial services?

Absolutely. Many businesses outsource transactional work like bookkeeping and also hire a fractional CFO.

Which is cheaper, fractional or outsourced?

That depends on what you need. For more routine, task-based work, outsourced providers can be less expensive, while a fractional leader will deliver much more value when you’re looking for strategic leadership.

Which is better for a startup?

Startups need one or both of these: an outsourced bookkeeper to manage all those finance admin chores, and a fractional CFO when a lot more strategic help is required, ie raising finance or sprouting up.

Not sure if the model is right for your business? Simply book a call with our team today.