Fractional accounting services give a business part of an accounting team's time, on a monthly fee instead of a payroll seat. That can be bookkeeping, a controller, a CFO, or a stack of all three. It fits a company whose accounting work is real but doesn't fill a full-time job, which is most owner-led businesses between $1 million and $20 million in revenue.
The word "fractional" tells you how you pay. It doesn't tell you what you get. So the useful questions are which level of help you need, who does what, and what it costs next to a hire. This guide answers all three. Walden sells fractional accounting, so where we use our own prices and results, we say so.
What fractional accounting services include
Fractional accounting comes in four levels. Each one includes the one below it. They differ in the question they answer for you.
| Level | What gets done | The question it answers | The hire it replaces |
|---|---|---|---|
| Bookkeeping | Transactions recorded and coded, bank and card accounts reconciled | Is the cash where I think it is? | A part-time bookkeeper |
| Accounting operations | Bookkeeping plus invoices, bills, payroll, connected software, and a close on a fixed date | Who owes us, what do we owe, and is payroll right? | A full-time bookkeeper, about $86,000 a year with taxes and benefits |
| Controller | A close within a few business days of month end, a balance sheet tied to outside statements, spending controls, and margin by job or location | Are the numbers right, and where is profit leaking? | A controller, about $203,000 a year loaded and three to five months to hire |
| CFO | Profit by job, customer, and product, pricing, a KPI dashboard, a 13-week cash forecast, and a plan for the next stage | What should we reprice, cut, or grow? | A CFO, about $325,000 a year loaded and four to eight months to hire |
At Walden, the three paid levels are Accounting, Control, and Advisory. The hire costs above come from our pricing page, which builds them from national salary data plus payroll taxes and benefits.
Which level do you need?
Start at the lowest level that answers the question in front of you. Buying more than that means paying for work your books can't support yet. Three checks, in order:
- Are the books current and reconciled? If not, you need Accounting, and probably a one-time accounting clean up first. Nothing above this level works on books that are months behind.
- Do the numbers hold still? If the close is late, last month's P&L has changed since you saw it, or you run job costing, inventory, or more than one entity, you need a controller.
- Are the books right but the answers missing? If the close lands on time and you still can't say which customers and jobs make money, or growth isn't turning into profit, you need CFO work.
The most common mistake runs the other way. Owners who think they need a CFO often need the books fixed first. Margin analysis on books two months behind is a guess with a spreadsheet attached.
When fractional accounting is the wrong answer
- The work fills forty hours a week. Then hire. A fractional team is cheaper only while the work is part time.
- You mostly need tax planning. That is your CPA's job, not a fractional accounting firm's.
- You're pre-revenue, or you're a venture-backed startup planning a round. Startup finance firms are built for fundraising. Owner-led firms like ours are built for profit and cash.
- You want data entry at $300 a month. Software or a low-cost bookkeeping service can do that. A fractional team costs more because it owns the outcome, not the keystrokes.
We say this to owners when it's true. One business we looked at needed a one-time project to connect its systems and set up procedures in tools it already owned. Its transaction volume didn't justify more than about $500 a month of ongoing help, so that's what we told them.
Who does what: you, your CPA, and the fractional team
Most problems with outsourced accounting start with a blurry line between who does a task and who approves it. Here is how the work splits in a Walden engagement. Ask any firm you talk to for its version of this table.
| Task | Fractional team | You | Your CPA |
|---|---|---|---|
| Coding and reconciling transactions | Does it | Answers questions | |
| Bills and payments | Codes, queues with backup, schedules | Approves each one, under your own login | |
| Signing authority on your bank accounts | None | Keeps it | |
| Invoices and collections | Sends and follows up | Decides on exceptions | |
| Payroll | Processes it and the filings behind it | Approves changes | |
| Month-end close and statements | Closes on a fixed date | Reviews | Uses at year end |
| Pricing, hiring, and spending decisions | Brings the numbers and a recommendation | Decides | |
| Tax returns | Signs | Prepares and files | |
| Audits and attest work | Gets the books ready | Performs |
You keep your CPA. A fractional accounting firm keeps the books your CPA files from, and the cleaner those books are at year end, the less your CPA has to fix.
How it starts: from messy books to a reliable close
Two clocks start when you sign, and owners often mix them up. Setup is fast. Getting old books right takes as long as the mess is deep.
- Access. The team needs your accounting file, bank feeds, the software that feeds the books (payroll, billing, job management, inventory), whatever history you have, and who approves payments today.
- Find out what's true. The first pass reconciles what's there. Most files hide something: a stale account, a double payment, a bank feed that stopped months ago.
- Clean up once. If the books are behind or wrong, the cleanup is quoted once, up front, and billed separately from the monthly fee. Our accounting clean up guide covers what that involves and what "done" should mean.
- Set the close date. Setup takes about two weeks. The first full close is usually the month after. From then on, the close lands on the same date every month.
How long the cleanup takes depends on how far behind the books are and how fast records come back. Our clean ups have taken no longer than 90 days so far, including one that covered 24 months of books. That assumes records come back when we ask for them.
What you get every month
"Monthly accounting" should mean a package you can read, not a login to a ledger. What lands depends on the level:
- Every level: reconciled books, a P&L, a balance sheet, and receivables and payables you can trust.
- Accounting: invoices out on schedule, bills queued for your approval, and payroll run on time.
- Control: a close within a few business days of month end, every balance sheet account tied to an outside statement, approval limits on spending, and margin by job or location.
- Advisory: a one-page dashboard of the five to eight numbers that move your profit, a 13-week cash forecast updated weekly, and a monthly working session on the decisions in front of you.
To see the CFO-level package, open the sample monthly CFO report. It's built on a fictional company: eight KPIs against budget, P&L variances explained, margin by service line, a 13-week cash view, and the month's decisions.
What fractional accounting services cost
Firms price fractional accounting three ways: by the hour, as a flat monthly fee, or per project for cleanups and setups. Hourly looks cheaper until a busy month doubles the bill. A flat fee costs the firm more when a month runs long, so it pushes the firm to fix whatever makes months run long.
Walden's prices are flat and published. Each level includes the one below it.
| Walden level | Monthly fee | What moves the price | Full-time hire it replaces |
|---|---|---|---|
| Accounting | $1,000 to $4,000 | Transaction volume, number of accounts, payroll headcount | Bookkeeper, about $86,000 a year |
| Control | $3,500 to $7,500 | Entities, locations, inventory | Controller, about $203,000 a year |
| Advisory | $7,000 to $12,000 | How much CFO work you hand us | CFO, about $325,000 a year |
Two businesses with the same revenue can land in different tiers. The difference is usually reporting. A company that sells online through several channels and needs customer acquisition cost tracked every month takes more work than one with a single channel and simple books.
Here is the math at the top of each range. Accounting at $4,000 a month is $48,000 a year, against $86,000 for a bookkeeper. Control at $7,500 a month is $90,000 a year, against $203,000 for a controller. Advisory at $12,000 a month is $144,000 a year, against $325,000 for a CFO, and the CFO alone wouldn't keep your books. Cleanup is quoted once and billed separately. There's no long-term contract: 30 days notice to cancel, and a money-back guarantee through your first monthly close or 30 days, whichever is longer.
The comparison flips when the work fills a full-time job. If your books really take forty hours a week, hire the bookkeeper. To run the comparison for your own list of tasks and your local salaries, use the pricing page.
What fractional accounting has found in real files
The value usually isn't in the monthly reports. It's in what turns up when someone finally ties the books to the outside world. Owners usually already suspect where the problem is. What they don't have is the time, or the setup, to prove it. From past Walden engagements, with the names left off:
- Gross margin from 12% to 38% in about six months at an $8 million railroad equipment distributor. Once each shipping invoice was matched to its order, customers turned out to be paying 1% to 2% of the order for shipping that cost 5% to 7.5%. Shipping fees and prices went up, and close rates held.
- $1.1 million a year in spending cut at the same company, after a monthly review of every cost line. Revenue held.
- $273K in missed retainage. It had been billed in the job system but never reached the books. We found it and the company collected it.
- $1.5 million cut from a distributor's yearly spending, with revenue untouched.
- Collections down from 74 days to 22 at a content restoration franchise, which put $455,890 of working capital back in the business. The fix was automated payment reminders, timed to each customer's history, for about $400 a month.
These are real results, not a guarantee. Each one needed books that tied out before anyone could see it.
How to choose a fractional accounting firm
Six questions sort firms quickly. A good firm answers all of them in writing before you sign.
- Who does the work? Is the person on your first call the person closing your books, or does the work go to a pool?
- What does it cost, and what moves the price? A flat fee with named drivers beats an hourly estimate.
- Who approves payments? You should, under your own login. Be careful with any firm that wants signing authority.
- How is cleanup priced? Quoted once against a defined scope, or billed by the hour until it's done?
- Can you leave? Ask for the notice period and what you get back when you go.
- Will they tell you when you don't need them? If every answer is "you need our top tier," keep looking.
If you're comparing firms that sell CFO work, our FocusCFO alternatives guide lays five of them side by side on price, contract terms, and who does the bookkeeping. For the wider question of bookkeeper, accountant, or firm, see how to pick the right accounting support.