Financial consulting is the most reasonable way to keep your business afloat if you aren’t well-versed in managing cash flow. In turn, financial consulting helps us deeply understand any obvious changes in the market and respond correctly with proper efficiency.
A company that finds a way to retain business, keep happy customers, and increase its income sooner or later faces a great number of problems related to financial issues. It can be the emergence of active competitors, price fluctuations in the financial market, a decline in demand for goods and services provided, uneasy relationships with suppliers, etc. In order to quickly and competently resolve these issues, many resort to professional third-party help, that is, financial consulting.
Download Free: Consulting Business Plan →
I n this article, Nick Wilson, founder and CEO of AdvanceSOS shares his opinion on financial consulting goals. As an accomplished financial expert, Nick will help understand what financial counseling is, its main directions, and when consulting is appropriate. A few words about loan connection service AdvanceSOS, founded by Nick Wilson. AdvanceSOS’s fast and easy application helps people instantly reach licensed lenders to get cash advance at AdvanceSOS with no credit check in Florida, Texas, Ohio, California.
“Financial consulting is the reasonable advice provision on solving specific problems faced by the specific company,” says Nick Wilson, CEO of AdvanceSOS. For example, being a director of a large enterprise, you decided to expand your business by creating new divisions.
But is it reasonable in the current economic conditions? Will the firm be able to compete in the new field successfully? What profit or waste is expected at the first stage and in the medium term? Financial consulting services will help you immediately answer all these worrisome questions with maximum accuracy.
Table of Contents
Four Main Stages of Financial Consulting
There are four stages that a consultant of a consulting firm goes through when he takes on the solution of the financial problems of a client:
Stage 1. Analytics
A consultant establishes relationships with the customer, finds out the information necessary for work, analyzes the current situation, the state of the business, and its financial situation. A consultant also finds out what customers want to get from cooperation along with their goals and wishes. A consultant receives financial and accounting documentation and reports for their study.
Stage 2. Design
After analyzing the customer’s business, the consultant creates a plan to solve the existing problems and achieve the set goals. He is actively looking for the most optimal solutions to a given situation.
Stage 3. Consultations
When the consultant has ready-made plans and projects in his hands, he presents them to the customer and gives recommendations on their realization and implementation. All further actions will depend only on the owner of the business.
Stage 4. Implementation
At the last stage, the consultant offers options for implementing the plans he created and gives recommendations on organizational issues for solving financial problems. Even though there are only four stages, behind each of them lies the titanic work of a financial consultant. This work takes more than one day, especially when it comes to a large enterprise or a well-developed business.
Main Directions of Financial Consulting
- Creation of an optimal accounting and management accounting system for young companies that are just entering the market. This allows you to immediately create effective accounting and reporting systems so that you can track the real financial condition of a business (company, enterprise) at any stage. Also, this direction is suitable for companies that need to restore accounting systems.
- Analysis of the current financial condition of the business. This enables the owners of companies and enterprises to clearly understand where to go next, what goals to set for themselves, and how to achieve them. That is, this can include both the financial side of the issue and investments, marketing consulting, personnel tasks, etc.
- Capital management. In this case, financial consultants analyze the dynamics of the ratio of own funds and borrowed money, assess the prospects for obtaining loans or loans in the future, and the value of the business itself.
- Evaluation of investment projects. Everything is simple here: the consultant deals exclusively with the company’s investments so that the owner can invest part of the funds in a really profitable business.
When Is Financial Consulting Appropriate?
You can resort to financial consulting at any stage of business development. The main thing is that it should be expedient. It is optimal to resort to financial consulting when deciding to expand production, distribution networks, or enter the international market. Before such an important step, you need to weigh the pros and cons, especially the business’s financial situation. Such a service is often ordered during upcoming audits by the tax office or other inspection bodies. For example, a manager wants to check how competently the company’s accounting department works and whether it makes sense to keep accountants on staff or outsource accounting.
Consulting is also appropriate in the case when the business owner does not see further prospects in the development of the company. Owners need to assess their own financial condition and set some achievable goals based on the recommendations received.
It is worth noting that the type of consulting described above is appropriate in any situation where a business has financial problems that need to be quickly resolved so as not to bring the matter to bankruptcy. It will help to put things in order in accounting, reporting, dealing with capital, debts, and finding the most profitable investment options.
Financial consulting is a thing that involves setting short-term and long-term goals in financial matters, developing strategies and plans to achieve and implement them. This service is usually provided by consulting companies which include independent financial advisers. They, in turn, analyze the customer’s business, find existing problems and prevent possible problems. Moreover, they develop strategies and plans for getting out of difficult situations, advise on financial and investment issues, both the business owners themselves and the heads of specific departments of the customer’s company.
Finally, financial consulting is a rather valuable service of a consulting nature. It is aimed at improving the financial performance of a company or enterprise. Its essence lies in the fact that the specialists of the consulting firm analyze the financial side of the customer’s business. Then, based on the collected data, they give ready-made recommendations and sober solutions to existing problems.
About the Contributor
Amanda Girard is the financial writer at AdvanceSOS. Her invaluable input and expertise translate into articles posted throughout the official website. Since AdvanceSOS founding in 2019, Amanda has written the most comprehensive yet exciting pieces for our company and is not going to stop any time soon.