Financial consulting is an external professional service in which the current financial situation of a business is analyzed and evaluated with the purpose of defining an action plan that allows companies to grow and become more profitable.
Despite being a resource available to any company, and having a very positive impact on business development, it is also true that it is a service rarely demanded by small and medium-sized companies. But why is the knowledge of a financial consultant so important? The reality is that managers or executives are the people who best understand their business and have the deepest and most detailed knowledge of it, but they need that financial advice not to replace one type of knowledge with another, but precisely to combine the company managers’ deep understanding of the business with the corporate finance expertise of professionals from financial consulting firms.
The objective of financial consulting is to analyze, from an external and objective point of view, the financial statements and off-balance-sheet information provided by the company’s managers, in order to detect problems that are sometimes not easily identifiable without a detailed and thorough analysis, and to propose an action plan aimed at increasing the profitability of the business. Ultimately, the goal is to help the company do more with less.
What advantages does collaborating with a financial consultant have?
- It drives important decision-making based on data analysis in an objective and external way, supported by comparable information from many other similar cases.
- Optimization of resources through the reduction of operating costs, improvement of margins, restructuring of the debt position, and the implementation of new control techniques.
- External and objective perspective not influenced by the company’s own way of operating.
- Support in key processes for the company such as the entry of an investor, mergers, or the acquisition of new businesses.
- Professionalization of the financial area by applying technical and specialized knowledge.
Successful practical case of a financial consultant
Family-owned company with a turnover of 1 million euros, but with recurring losses and difficulties meeting its current payments. The CFO focuses on increasing sales volume in an attempt to close the year with a profit. However, despite increasing sales volume by 15%, the problem persists.
After the analysis carried out by the financial consultant, the problem did not lie in the company’s sales volume, but in how cash flows were being generated. The company was using short-term debt to finance long-term assets, and net profit was negative due to inadequate management of operating expenses.
This example is one of the cases in which collaboration with a financial consultant can help us in moments of financial stress.
Financial consulting = investment
In saturated markets, the difference is not always in the product, but in how businesses are managed. Companies that make decisions based on data rather than intuition, anticipate risks instead of waiting for problems to arise, and optimize resources rather than wasting existing ones, are more likely to grow sustainably.
Financial consulting is not an expense: it is an investment in clarity, efficiency, and the future.
At Kea Advisory we have an expert team that will analyze the financial situation of your company, so that together we can create a roadmap that enables the achievement of the company management’s objectives. If you are experiencing financial stress, want to increase your profitability, or need a detailed analysis of your debt structure, contact us with no obligation and we will look for the option that best suits your needs.
