Financial experts are the go-to professionals when you need help with business debt. With their expertise, you no longer need to deal with business debt or any other financial struggles on your own. Not only will a financial advisor help you keep your debt in check or graduate to freedom, but they will also provide several services. For instance, they assist business owners in preparing income taxes and managing investments. Below are the details of the services you can expect from a financial expert.
Analyze And Restructure Debts
There are many types of debt, some of which come with more severe consequences than others. For example, credit cards are some of the worst forms of debt due to their high rates of interest, compared to mortgages. A professional will analyze the kinds of debt you have and craft a successful debt-repayment plan. If you are thinking about consolidating your numerous business debts, you can talk to a financial expert about consolidation. Debt consolidation is a form of restructuring which comes with many benefits including lower interest rates, the ability to keep track of your debt repayment with ease, and a better credit score. An improved credit score will put you in good books with creditors, helping you to negotiate for lower interest rates.
Be prepared to do most of the work yourself as the expert may only provide advice on what you need to do. Experts usually leave clients with the implementation task. The approaches adopted by advisors may not help you repay your debt as fast as you would like, but they will help you prioritize debt so that you enjoy a better financial position.
Create A Long-Term Financial Plan
Without a solid financial plan, your business may fall back into bad debts once you let your financial advisor go. A professional financial expert should provide you with a detailed financial plan. The best advisors assist you in creating one for the next five years. If you abide by it, you can maintain a quality business cash flow. The financial plan details the recommended course of action, the milestones that the business should watch out for, and the red flags that signal a problem with your finances. Below are three primary documents that will help the financial expert craft a useful long-term financial plan.
A Profit And Loss Statement
The statement lists all your sources of revenue and expenditure and the total net profit or loss. Expenses can be fixed or variable. Rent is an example of a fixed expense, while commissions are variable costs.
A Cash Flow Statement
A cash flow statement details how much your business brings in and how much it pays out. The cash flow statement complements the sales, expenses, and profits reports in that it helps you identify the actual cash that you receive and give out, accounting for defaults or late payments. It is usually a monthly statement that allows you to take control of your cash flow.
A balance sheet consists of your assets, liabilities, and equity. The total of your liabilities and equity should equal your total assets. Assets include money you have and that which people owe you, equipment, and royalties. Liabilities are the obligations you have to creditors, while equity represents profits or losses, and shares owned by you or others in the company.
Creating a suitable budget marks the difference between a great and lousy financial future. For the expert to craft an appropriate budget, you should provide all the information about your business. This includes revenues and expenditures, as well as any assets and liabilities you may have including debtors and creditors. Some documents to present include credit cards, bank statements, tax returns, and so forth. You will need to face the hard truths about your financial habits if you need to find a solution.
With the information obtained from the records you provide, the financial advisor should craft a new budget. The new budget should be leaner; helping you trim off unnecessary expenses, avoid debt, and identify excess funds that will help you repay some of your debts. The best experts assist you in establishing smaller budgets from your original amount. That way, you can create a moving budget to relocate without hurting your financial state. Many companies also establish marketing budgets for new campaigns. Either way, the top financial experts make budgeting much easier.
The financial expert should also help you plan a sales forecast so that you can be more intentional with your sales. They should advise on a personnel plan as well, and help in making a financial justification for each person you choose to hire.