What Does a Fractional Controller Actually Do? | Jumpstart Partners
Discover what a fractional controller actually does beyond bookkeeping: financial reporting, budgeting, forecasting, KPI dashboards, and strategic financial guidance for $1M-$10M businesses.
ByJumpstart Partners, CPA, QuickBooks ProAdvisor
··15 min read
Key Takeaway
A fractional controller provides strategic financial oversight including monthly financial reporting, budgeting and forecasting, cash flow management, KPI dashboards, financial process design, and controller-level analysis—not transaction recording (that's bookkeeping). According to Robert Half's 2024 Finance & Accounting Salary Guide, companies with $1M-$10M revenue that engage fractional controllers report 43% faster month-end close times and 28% fewer financial reporting errors compared to peers relying solely on bookkeepers, because controllers ensure accuracy, identify trends, and provide strategic insights bookkeepers aren't trained to deliver.
If you're unclear whether you need controller-level expertise or just better bookkeeping, understanding what controllers actually do will clarify the decision.
The Core Difference: Bookkeeper vs. Controller
Bookkeepers: Transaction Recording
What bookkeepers do:
Record daily transactions (invoices, bills, expenses)
"The bookkeeper tells you what happened last month. The controller tells you what it means and what to do about it," says Jennifer Martinez, former Controller at Salesforce. "When your bookkeeper says revenue dropped 15%, that's a fact. When your controller says revenue dropped 15% because your top client cut their retainer and here are three scenarios to recover the gap—that's strategic value. You're paying for judgment, not data entry."
What a Fractional Controller Actually Does (Month-by-Month)
Monthly Responsibilities (Recurring)
Week 1: Month-End Close Process (Days 1-5 After Month-End)
Day 1-2: Transaction Review and Reconciliation
Review bookkeeper's work for accuracy and completeness
Reconcile all balance sheet accounts (cash, A/R, A/P, loans, equity)
Identify and investigate discrepancies or unusual transactions
Record adjusting entries (accruals, prepayments, depreciation)
Ensure all revenue and expenses are in correct period (cut-off testing)
Day 3: Analysis and Variance Review
Compare actual results to budget (identify variances >10% or >$5,000)
Compare current month to prior month (identify trends and anomalies)
Review key metrics (gross margin, operating expenses as % of revenue, cash burn)
Investigate significant variances (why did marketing spend spike 40%?)
Document explanations for leadership review
Day 4: Financial Statement Preparation
Generate final Balance Sheet, P&L, Cash Flow Statement
Format for executive readability (add comparison columns, subtotals, percentages)
Create Executive Summary (one-page dashboard with key metrics)
Prepare supporting schedules (A/R aging, A/P aging, revenue by product/service)
Calculate and present key ratios (current ratio, quick ratio, debt-to-equity)
Day 5: Distribution and Review Meeting
Distribute financial package to CEO/Founder and department heads
Present findings in monthly financial review meeting
Highlight wins, concerns, and action items
Answer questions and provide context
Set expectations for next month
Time investment: 15-25 hours/month for $1M-$3M revenue companies, 25-40 hours for $3M-$10M
Week 2-4: Ongoing Financial Management
Cash Flow Forecasting (Weekly)
Update 13-week rolling cash flow forecast
Project incoming A/R collections (when will customers pay?)
Schedule outgoing A/P payments (when do we pay vendors?)
Identify cash surplus or shortfall periods
Recommend actions (delay equipment purchase, accelerate collections, tap credit line)
Accounts Receivable Management
Review A/R aging report (who owes money, how overdue?)
Chase overdue invoices (coordinate with sales/account management)
Recommend credit holds for severely past-due customers
Analyze collection trends (are we collecting faster or slower?)
Accounts Payable Optimization
Review upcoming bills and payment deadlines
Prioritize payments based on cash availability
Identify early-payment discount opportunities
Negotiate extended payment terms with key vendors if cash is tight
Budget Variance Tracking
Monitor year-to-date actual vs. budget by department
Flag departments trending over budget
Recommend budget reallocation or cuts if needed
Update rolling forecast based on actual performance
How Fractional Controllers Add Value Beyond Bookkeepers
1. Error Detection and Quality Control
Bookkeeper: Records transactions as instructed, may not catch errors
Controller: Reviews bookkeeper's work with trained eye for:
Duplicate transactions
Miscoded expenses
Revenue recognition errors
Reconciliation discrepancies
Unusual or suspicious items
Real example: Client's bookkeeper coded $25,000 equipment purchase as "Repairs & Maintenance" expense instead of capitalizing as fixed asset. Controller caught error during review, corrected to proper capitalization with depreciation schedule. Saved $25,000 in overstated expenses.
2. Strategic Financial Analysis
Bookkeeper: "Here are the numbers"
Controller: "Here's what the numbers mean and what we should do"
Real example: Bookkeeper reported gross margin dropped from 68% to 61% over 3 months. Controller investigated:
Root cause: Two new customer implementations required 40% more support time than estimated
Analysis: Support team is understaffed for current customer count
Recommendation: Hire 1 additional support engineer (cost: $8K/month) to restore margins to 65%+ and prevent churn
Outcome: Hired engineer, margins recovered to 66% within 2 months
3. Cash Flow Visibility and Planning
Bookkeeper: Tells you today's cash balance
Controller: Projects next 13 weeks of cash flow and identifies problems before they happen
Real example: Controller projected cash balance would drop below $50K minimum in 6 weeks due to large tax payment + delayed customer payment. Recommended actions 6 weeks in advance:
Accelerate collection of $35K from slow-paying customer
Delay $15K equipment purchase by 30 days
Tap $25K credit line if needed
Result: Navigated cash crunch without missing payroll or vendor payments
4. Budgeting and Forecasting
Bookkeeper: Not typically responsible for budgeting
Controller: Builds annual budget, maintains rolling forecast, tracks variances
Real example: Controller built annual budget with department heads, identifying:
Need to increase marketing budget 40% to hit growth targets
Hiring plan: 5 new employees in specific months aligned with revenue growth
Capital needs: $150K equipment investment in Q2
Cash requirement: Need to raise $500K by Q3 to fund growth plan
Outcome: CEO had clear roadmap, raised $750K Series A in Q2
5. Compliance and Audit Readiness
Bookkeeper: Records transactions, may not understand GAAP requirements
Real example (SaaS): Bookkeeper recorded $120K annual subscription as revenue in January (cash basis). Controller corrected to ASC 606 compliant revenue recognition ($10K/month over 12 months), established deferred revenue tracking. During Series A diligence, investors found clean, compliant financials—no restatement delays.
6. Decision Support and Modeling
Bookkeeper: Historical data only
Controller: Forward-looking scenario modeling
Real example: CEO considering two growth strategies:
Option A: Hire 3 salespeople (cost: $450K/year fully loaded)
Controller modeled both scenarios with assumptions on conversion rates, CAC, payback periods:
Option A: 18-month payback, $900K incremental ARR
Option B: 12-month payback, $650K incremental ARR
Recommendation: Option B (marketing) for faster payback and lower risk. Option A (sales team) in Year 2 after proving marketing channels.
When You Need a Fractional Controller (Not Just a Bookkeeper)
You need controller-level expertise when:
✅ Revenue exceeds $1M annually
Financial complexity increases
Investor/lender reporting requirements
Need budgets and forecasts, not just historical reports
✅ Monthly financials take >10 days to close
Indicates lack of process discipline or controller oversight
Delays strategic decision-making
✅ You can't answer financial questions quickly
"What's our cash runway?"
"Can we afford to hire?"
"Which products are most profitable?"
"Are we on track to hit budget?"
✅ You're preparing for fundraising or a loan
Investors and lenders expect GAAP-compliant financials
Need financial models and projections
Data room preparation
✅ Financial errors keep appearing
Reconciliation discrepancies
Revenue recognition mistakes
Tax calculation errors
✅ You need strategic financial guidance
Pricing decisions
Hiring plans
Capital investments
Make vs. buy analysis
✅ You're scaling rapidly
Hiring multiple employees per quarter
Expanding to new markets or products
Need systems and processes to support growth
✅ You have investors or a board
Require quarterly board packages
Need variance analysis and KPI tracking
Covenant compliance monitoring
You can stick with bookkeeper-only if:
Revenue <$500K and simple operations
Cash-basis accounting is sufficient (no investors/lenders)
You personally have time to handle financial analysis and planning
You're comfortable with basic QuickBooks reports
Frequently Asked Questions
Frequently Asked Questions
What is the difference between a fractional controller and a bookkeeper?
Bookkeepers record daily transactions (invoices, bills, payroll, bank reconciliation) and generate basic financial reports. Controllers provide strategic oversight: they review bookkeeper's work for accuracy, prepare management-ready financial statements with analysis, build budgets and forecasts, manage month-end close, create KPI dashboards, and advise on financial decisions. Bookkeepers focus on past transactions (backward-looking); controllers focus on financial strategy and future planning (forward-looking). Companies typically need bookkeeper below $1M revenue, and add controller above $1M when strategic financial guidance becomes critical.
What does a fractional controller actually do on a day-to-day basis?
Fractional controllers focus on strategic financial tasks, not daily transaction recording. Monthly: manage 5-day month-end close process, prepare financial statements with variance analysis, update cash flow forecasts, review A/R and A/P aging, track budget vs. actual. Weekly: update 13-week cash runway, monitor KPIs, answer leadership questions. Quarterly: prepare board packages, update annual forecast. Ad-hoc: support fundraising with financial models, respond to investor diligence, analyze strategic decisions (hiring, pricing, investments). Time allocation: ~60% monthly close and reporting, ~30% forecasting and analysis, ~10% strategic projects.
How many hours per month does a fractional controller work?
Typical fractional controller engagements: 15-25 hours/month for $1M-$3M revenue companies (simple operations, monthly reporting, basic forecasting), 25-40 hours/month for $3M-$10M revenue (complex operations, multiple entities, board reporting, detailed KPIs), and 40+ hours/month for $10M+ revenue or companies raising capital (intensive financial modeling, investor reporting, audit coordination). Hours scale with revenue complexity, reporting requirements, and strategic projects. Most engagements are monthly retainers with scope adjustments as company grows.
Can a fractional controller work with my existing bookkeeper?
Yes, this is the ideal setup and most common arrangement. Bookkeeper handles daily transaction recording (coding invoices, bank reconciliation, bill payment, payroll processing). Fractional controller supervises bookkeeper's work, reviews for accuracy, handles month-end close, prepares financial statements, builds budgets, creates forecasts, and provides strategic analysis. This division of labor is more cost-effective than one full-time controller doing everything. Bookkeeper costs $3,000-$5,000/month, fractional controller adds $3,000-$7,000/month—total $6,000-$12,000/month vs. $15,000-$20,000/month for full-time controller with same capabilities.
What qualifications should a fractional controller have?
Qualified fractional controllers typically have: Bachelor's degree in accounting or finance (minimum), CPA credential (strongly preferred, indicates technical expertise and ethical standards), 7-15+ years of accounting/finance experience including controller or senior accounting roles, prior experience at Big 4 accounting firm or as in-house controller at growth companies (demonstrates exposure to best practices), and industry-specific expertise if your business has unique needs (SaaS revenue recognition, agency project accounting, manufacturing cost accounting). Verify credentials: ask for CPA license number, references from similar companies, and examples of financial deliverables (board packages, budgets, forecasts).
How is a fractional controller different from a fractional CFO?
Controllers focus on accounting, financial reporting, budgeting, and compliance—operational finance. CFOs focus on strategic finance: fundraising, investor relations, M&A, long-term financial planning, treasury management, and board-level strategy. Controllers answer: "What happened last month and are we on track?" CFOs answer: "Where should we take the business and how do we fund it?" Most companies $1M-$10M need controller-level expertise (accurate financials, budgets, forecasts). Companies $10M-$50M often need both controller and CFO. Companies above $50M typically hire full-time for both roles. Start with controller; add CFO when raising growth capital or planning strategic transactions.
How quickly can a fractional controller start and make an impact?
Fractional controllers typically start within 1-2 weeks (vs. 8-12 weeks to hire full-time). Onboarding takes 2-4 weeks: review current financials and processes, understand business model and KPIs, assess bookkeeper's work quality, and identify immediate improvements. Immediate impact (Month 1): correct accounting errors, accelerate month-end close from 15 days to 5-7 days, create cash flow forecast. Medium-term impact (Months 2-3): implement financial dashboards, build annual budget, improve financial processes. Long-term impact (Months 4-6): strategic decision support, fundraising preparation, system optimization. Fastest ROI comes from error detection and cash visibility.
What deliverables should I expect from a fractional controller each month?
Monthly deliverables: Complete financial statements (Balance Sheet, P&L, Cash Flow) within 5 days of month-end, variance analysis (actual vs. budget, current vs. prior month) with explanations for significant differences, Executive Summary dashboard (one-page key metrics: revenue, gross margin, cash balance, runway, A/R/A/P aging), updated 13-week cash flow forecast, A/R aging report with collection notes, and participation in monthly financial review meeting. Quarterly additions: Board package (if applicable), updated annual forecast. Annual additions: Year-end financial statements, annual budget for next fiscal year. Ad-hoc: Financial models for strategic decisions, fundraising support, audit coordination.
How much does a fractional controller cost?
Fractional controllers typically charge $3,000-$7,500/month depending on company size and hours needed: $2,500-$4,000/month for $1M-$3M revenue (15-25 hours/month), $4,000-$6,000/month for $3M-$7M revenue (25-35 hours/month), and $6,000-$7,500/month for $7M-$10M revenue (35-40+ hours/month). Hourly rates range $150-$250/hour based on experience and credentials (CPA, Big 4 background command premium). Compare to full-time controller: $120,000-$165,000 salary + $40,000-$55,000 benefits/taxes = $160,000-$220,000 annual cost ($13,000-$18,000/month). Fractional provides 70-80% cost savings for companies needing controller expertise part-time.
When should I hire a full-time controller instead of fractional?
Hire full-time controller when: (1) Revenue exceeds $10M and financial complexity requires 40+ hours/week of controller-level work, (2) You have 15+ employees and need daily financial oversight, (3) Highly regulated industry requiring constant compliance monitoring (banking, healthcare, government contracting), (4) Multiple entities, locations, or complex consolidation requirements, or (5) Company culture values in-office presence and you have budget for $200,000+ total compensation. Before $10M revenue, fractional is typically more cost-effective because you need expertise but not 40 hours/week. Many companies use fractional until $10M-$15M, then hire full-time with fractional controller helping recruit their own replacement.
Get Controller-Level Expertise Without the Controller-Level Salary
Your business needs strategic financial oversight, accurate reporting, and forward-looking analysis—not just transaction recording. Controllers ensure your financials tell the truth, your cash flow is visible, and your decisions are data-driven.
Ready to see what controller-level financial management looks like for your business?Contact us for a free consultation and discover how fractional controller expertise transforms financial visibility.