Finance Consultancy
Companies as well as individuals rely on financial advisors to protect their assets, make better use of their properties and save taxes, etc. There are many consultants who with their experience provide expert knowledge to their clients on what to invest, where to invest and when to invest for best returns. They manage the money by putting them into different baskets to yield positive results over a specific period. Taxes, investments (mutual funds, stock market, bonds, fixed deposits), and insurance decisions are some of the major duties performed by finance consultants. Some consultants work for firms which focus more on the financial aspects of industrial sectors while other consultants offer generic services.
Why businesses need finance consultants
Decisions taken by the senior management of a company will have prime bearing in the years to come. Company’s directors need to take well-informed decisions which can meet the company’s goals and objectives. Although hiring a financial consulting firm to help you out in the various fiscal and operational aspects of your business would incur costs, the investment is worth to make. As you work closely with your advisor, you will gain better insights into handling financials and increasing profitability.
In business every penny counts and it is important to keep a track of the inflow and outflow. Having an experienced chartered accountant or an accountant to work with you is crucial to keep your account books safe and pay taxes on time. Well numerous small businesses do not have sufficient funds to hire accountants on regular basis. A viable option is to get a financial consultant on contract basis to apprise you of the latest tax laws, regulations and deadlines which can save time and stress. A good financial consultant will spot the loopholes correctly and provide advice on avoiding late penalty fees, tax penalties, filing additional charges, etc.
Financial consultants also look into the retirement plans of the employees, advice on sales pattern, and guide you about the market realities. If your company is a mid-market firm which is making an acquisition and is looking for advertisement then financial consultants can extend their help. You will be taking a more informed decision. They will also provide risk management services to secure your company from future risks and arrive at strategies to improve the company’s overall operations.
Seeking advice from consultants is beneficial when it comes to doing business investments especially in complicated matters. In cases of employees and their retirement options, a financial consultant can provide appropriate advice in managing retirement funds of any size. Companies often come forth with attractive packages with a retirement plan that can attract talented candidates to your company as well as take care of the existing staff. He will review 401(K)s, profit sharing plans, tax deferred annuities, 529 college savings plans, and deferred compensation plans.
Howsoever successful your business might be as on date, you need to continuously plan for your future. Although some believe that financial consultants are unnecessary expense, others understand the real benefits of hiring one as they can help grow the business faster than you ever thought was possible.
Financial consultants can offer advice on a wide range of issues, such as:
• Employee benefits programs
• Managing taxable income
• Choosing the right types of insurance
• Determining business valuation
• Setting up employee retirement plans
• Making smart investments
Advantages of financial consultancy services
They provide a wide range of advantages to the businesses by assisting them in investment management, financial planning, retirement plans, life or disability insurance, and giving them full control over the practices. Firms avail many services from them in the process:
Becoming more objective:
Lack of objectivity can hamper business such as reducing the performances in your investment ratio or even reducing the inflow of money. Hasty investment decisions can undo months and years of hard work. The decisions for the business must be taken with a clear objective and business should be carried out with proper analysis. Decision-making should be well informed and a proper financial advisory firm helps to provide you that objectivity. They can help to ensure that you arrive at right decisions, take positive, objective investment decisions, and the consultants even undertake investment decisions on behalf of the business. Even if the market or economy is shaky in nature, the adviser helps run the business smoothly. Choosing the right investment vehicle is crucial but timing your entry and exit in business decisions is just as vital.
Saves time:
Money management isn’t an easy work, it needs many skills and investment is perhaps the most complex one in it. Both in terms of time and money there is a lot to be invested for you to become a successful investor. You need to be aware of the market conditions, financial capabilities and situation of the business as well, otherwise investment becomes a gambling. One needs to have inside out knowledge of this field and do constant research on the changes in market trends. A business on its own will take away valuable time of employees for studying market trends and that is not affordable. Hence, the more reason to hire a financial consultant who can devote their time and energy for this cause as they will manage your investment portfolio with ease. You are free to direct your attention to more fruitful and productive activities that your business needs. Time is money and is an important factor in financial advisory services.
Tax efficiency:
A good financial advisory firm will make sure that your money is put in the right place and gives you excellent returns by minimizing your present and future tax liabilities. Often tax systems of various countries are difficult to comprehend and understand and working with it can be a nightmare. A small error could lead to huge financial losses with unwanted taxes being levied on your business. Taxes on business establishments have different vagaries including less attractive opportunities that can be more effective sometimes. In several cases taxes eat into the investments of a business. Moreover, very good investments can also result in a tax charge that could hurt your personal income and this happens usually with wrong timing. An experienced financial consultant will be aware of such traps and enable you to make your finances as tax efficient as possible. Before investing the advisors have to ensure that all necessary concerns and possible tax implications are taken care of in advance. They help to reduce your tax liability by launching new investments for long-term gains, tax efficiency or advising you of the latest changes in legislation.
Improve the cash flow:
Research has revealed that a professional financial adviser will give proper advice on getting better returns on investments and lower personal stress as well, as a bonus. The adviser will assess your current financial health by assessing your income, assets, liabilities, taxes, insurance, estate plan and investments. If right investments are made profits might increase leading to improved cash flow.
Professional review of goals and investment:
Advisers ensure that you reach retirement goals with ease, advice and educate on achieving financial goals easily. It is important to monitor your investments from time to time and also keep yourself up to date with the changes in law that would happen. For avoiding all these strains one better way is to hand over the job of managing finances to an experienced adviser who will take care of everything. Based on the requirements of goals and risk profiling, they will do proper asset allocation. Taking risks in investment at the beginning of the business may not be comfortable for many but with the help of a financial adviser you will slowly gain confidence to invest in risky investments like the equity market for buying and selling stocks.
Reduction in mental stress:
Often money-related stress can be detrimental to your health. One needs peace of mind and clarity to take good and healthy decisions. Advisers will look at the big-picture view of the financial situation of your business. They will review, monitor, and make amendments which will be suitable for your business which will make your business more organized and safe against future risks. A competent financial consultant can take a lot of stress from your mind and the business can be benefited from the high financial literacy provided by the advisory firm.
Proper asset allocation:
Over a period of time the company is likely to amass many assets. Most executives aren’t aware of proper asset allocation that the firm should follow. Most of the investments happen in real estate which is quite common and of course safer as those will remain forever as immovable assets. However, a proper asset allocation is a must for business to operate smoothly over the long-term and the guidance for this comes from finance consultants or consultancy firms.
Expert advice:
Arriving at investment decisions by oneself is a tricky task. It is tough to track investments on a daily basis, watching out for all possible risks, and monitor the markets closely. This is a continuous process and has its own hassles whereas when you outsource this to a financial management advisory company then they will take care of it very smoothly and employees can concentrate on their everyday schedule which is needed for business to grow on the usual pattern. Financial advisors will have a broader, deeper knowledge when it comes to money management and putting the investments in the right baskets. They are well aware of the latest investment opportunities, market developments, taxation, and law and can take your business to new levels of success.
Simplification:
There are a variety of complex investment products, theories, and concepts in the financial services industry. It is important to consider a unique solution with respect to your business. One should have a clear understanding of what should be avoided, which is risky and which is tough to do. Investors have a variety of information available to them especially in this era of laptops and smartphones. The challenge here is to sort and select the right options for yourself and your business.
Continuous process of tracking and re-balancing:
Taking the advice of a financial consultant helps to reduce the overall risk in an investment portfolio. It is the start of your journey and the real advantage of having a financial consultant comes from periodic rebalancing of the portfolio, ongoing reviews, and taking corrective actions on the portfolio depending upon business changes, modification of goals for the performance of funds, etc.
Unlimited income potential:
There is no limit on the earning potential if the business takes guidance from professional financial advisors, sky is the limit. Income is generated on the amount of recurring revenue created every year or on the amount of new business that is brought to the table. Investment ideas provided by professionals can reap many benefits that the business can earn triple-fold.
Protection:
There is no guarantee that the investment recommended by your financial advisor will perform as good as you would have hoped for. However, you are protected from poor or misleading advice that is taken without any research. As finance consultants do have a good knowledge of the markets, they can advise you accordingly, if you are protected from most of the time from any mismanagement of finances. They usually take all the ups and downs into account before giving any advice on how to take the further course in action in the business investments.
Any business needs to manage its finances by saving up and spending monetary resources over time, taking into account future business events and numerous financial risks. Many long-term decisions about money can be scary. Companies often turn to financial advisors to for taking informed decisions which will bode well for your business not only in the near to medium term but also in the long term.