5 Signs That You Need a Financial Advisor

It’s so obvious sometimes, knowing when you need to call in a professional at home or at work. The furnace stops working in January. Your car is making a funny noise and it often dies at stop signs. An employee or customer initiates legal action against your business.

But a financial advisor? That’s not quite so clear-cut.

Maybe you think it’s not necessary because you’re staying afloat, keeping your doors open and not getting unpleasant correspondence from bill collectors or your bank or the IRS.

Treading Water?

But are you doing more than just keeping up? If you’re not, you’re seeing one sign that it may be time for professional help with your finances: You feel like you’re spinning your wheels. Considering how hard you and your employees work, you think that you should be making more of a profit. But you don’t know how to figure out why that’s not happening.

Accounting professionals can do more than simply monitor bookkeeping and prepare taxes. They can evaluate all of those things that you seem to be doing right and recommend changes. They can be informal business partners.

Your tax bills seem too high. Here again, you think you’re doing everything you can to minimize your income tax obligation. You dig for deductions. Require meticulous expense-tracking. Keep up with tax-related legislation. You even have a line item in your budget for tax savings.

Financial advisors don’t have to just come in at the eleventh hour, plug your numbers into their software, and e-file your return. They can work with you throughout the year, helping you analyze the tax implications of business decisions you’re making.

You’re spending too much time trying to fix errors. You know that you’re not an accounting expert, but you understand the basics of accounts receivable and payable. If you’re using a manual accounting system, you may be working nights and weekends trying to match invoices with payments, purchase orders with shipments, etc. – and trying to fix things when they don’t come out right.

Cloud-based accounting applications can simplify this process. And financial advisors can help you choose the right solution and learn how to use it well so that they don’t have to do one of the other tasks that they’re good at: untangle jumbled files.

You’ve tried to get needed financing but failed. Financial advisors know what banks and other investors are looking for when they see a loan proposal. They also may know of financing options that you don’t. They can comb through your business plan (or help you create one if you don’t have one) to see where they can help you accentuate your strengths. And they can prepare you for meetings with prospective financiers.

You can’t see the forest for the trees. If you’re doing your accounting tasks on paper, it can be difficult-to-impossible to create and analyze reports and projections that give you a clear, understandable, detailed accounting of where you are, where you’ve been, and where you may be headed. Yet in order to see what changes you need to make to facilitate growth, you absolutely need this information.

You might be able to tell when invoices and bills are paid on time, payroll is met, and you’re neither running out of product nor stocking too much. But can you make that happen every month—with more money left over—and how?

Financial advisors can look beyond your basic aging reports and your lists of open invoices and unpaid purchase orders and create the financial reports you need to, for example, analyze your cash flow, calculate your profit or loss, and create realistic projections.

Think of the process of working with a financial advisor as working through the five Ws of journalism in reverse:

  • Why are you struggling with your company’s financial management?
  • Where do the problems lie?
  • When can you make time to focus on your finances?
  • What changes need to be made?
  • Who will take on responsibility for the new and/or different goals, processes, and evaluation?

Your financial advisor will not be your boss. You’re still in charge. You’ll just have a powerful, knowledgeable ally in your corner.


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