Seven Signs That You (and your business) Need a Financial Advisor

need a financial advisor

Running a new business venture involves dealing with many potential pitfalls and obstacles however, a good financial advisor can help you navigate through any issues. Although, you may start with a strong balance sheet, many businesses fail as they struggle to maintain control as the business grows.

Although it might appear like an extra cost, hiring a financial advisor will actually help to offset some of the burden associated with running a business. A financial advisor can also identify potential issues like cash-flow before they become critical and become much more difficult to resolve. Here are several other reasons why your business may need a financial advisor.

1.  You need assistance to figure out your finances

As a business owner, you might be the best in creating and delivering the best products and services to your customers, but do you have what it takes to manage your finances properly?

Engaging the services of a financial planner should be a continuous process, as opposed to being a reactive process. The best financial adviser will assess your financial wellness, help to ensure that budgets and revenue plans are fine-tuned to your particular needs, and help to develop a plan to grow your business.

2.  You've got lots of clients/ revenue sources but no money in the bank

Failure to properly manage cash-flow is the primary reason most businesses fail within the first few years after start-up. Cash-flow problems typically are a result of not managing cost of goods efficiently and not properly managing your accounts receivable. Maintaining steady cash flow is a big challenge for many individuals and businesses and if you find your sales are growing but you are struggling to pay your bills, you need financial planning advice.

A good financial planner will help you understand how to better manage your balance sheet and income statement and optimize cash flow so your business can grow.

3.  You need the best financial advisor when your ledgers start getting complicated

Maybe you have some level of financial management. Perhaps you can comfortably create a balance sheet and you understand the difference between assets, and liabilities. But what happens when you need to factor in tenders, invoices, expenses, inventory, and banking?

Things can get complicated in a hurry with inventory and payroll and can have a major impact on profits and taxes. If your ledgers and spreadsheets are getting complicated, that's a flashing red sign that you need a financial advisor.

4.  You've made big blunders in bookkeeping

Point of correction; even a small mistake can have massive ripple effects in your business or personal finances. There is no denying it – numbers are not for everyone. When you start experiencing difficulty with numbers, spotting mistakes in your previous tax returns or misplacing critical documents, it's time to call in some professional help. These mistakes may be individually small, but they have the potential to result in a financial doomsday into your life/business.

5.  You/your business is facing an audit

During an audit, the IRS Agent or Tax Office Agent will investigate all your expense and revenue records as well as your accounting procedures. They will be trying to find out whether the amounts you have filed for taxes match your assets.

Poor bookkeeping can turn this into a nightmare of a process. Even an honest mistake can attract crippling fines and in worst cases, criminal charges.

When it's time for an audit, it would be best to get financial advice. A competent financial expert will help to correct the errors and help you file your tax returns.

6.  Your growth is suddenly overwhelming

When you start to get overwhelmed by growth in your business, it's time to seek financial counseling. With more growth, ledgers become bigger, and responsibilities grow as well.

Vendors will be knocking on the doors, customers will be flooding your store, and there will be less spare time to spend on running numbers. You will need the help of a professional adviser to deal with the new challenges that arise out of such growth.

7.  You struggle keeping financial records organized

Losing a receipt is not a big deal, if you are reconciling your bank statements on a regular schedule however, keeping your financial records organized is crucial for a business. Having a weekly schedule for bookkeeping tasks as well as clear financial procedures and processes can mean the difference between making money or not. 

Reconciling accounts on a regular basis will help you combat instances of fraud or mistakes made by your banking institution. You will also get a deeper understanding of the financial health of your business.

Financial management is critical for stability and growth either in your business or personal finances. The best financial advisor can help to take care of the crucial aspects of financial planning and management as you focus on growth and profitability.

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