Increasing shareholder value with corporate finance consulting
Summary
To understand the value of corporate finance consultants for businesses, we first need to look at the state of financial consulting in 2023 and determine the need for consulting services in the sector.
As part of this corporate finance consulting guide, related topics such as the types of financial consultants and the duties of a corporate financial consultant will be discussed.
The benefits of a corporate financial consultant range from expert advice to informed decision-making capabilities. If you are planning to leverage their services, following the best practices for hiring a corporate finance consultant will ensure that you choose the best option.
Corporate finance consulting is the process of creating and implementing effective strategies to ensure that a business’s financial standing is at an adequate level. The ultimate objective of these strategies is to increase shareholder value, securing capital funding for businesses in the long term.
Finance consulting in general has seen growth globally, particularly due to service expansions into areas such as investment planning, insurance, and retirement planning. The global finance consulting market is projected to grow at a compound annual growth rate of 6.9% from 2021 to 2028.
Major corporate financial activities such as capital raising and investments, short-term liquidity financing, finance monitoring, and risk management require robust planning and execution to ensure a healthy finance landscape.
Corporate finance consultants assist businesses in creating these frameworks backed by their expertise in the sector. To recognise the ins and outs of corporate finance, the following aspects should be understood.
Types of financial consultants
The main types of finance consultants associated with businesses are:
- Planning and analysis
These consultants assist businesses with the crucial processes of budgeting and forecasting.
- Financial controls
These consultants help examine the financial policies used to allocate financial resources in a business.
- Treasury consulting
These consultants assist with daily cash flow optimisation and long-term treasury strategy development.
- Debt management
These consultants examine the state of debt and evaluate and recommend options for resolution.
- Risk management
These consultants help assess the potential risks in investments and suggest mitigation strategies.
As such, the role of a corporate financial consultant can include assessing financial risks, identifying new streams of income, managing debt, and assisting you navigate each stage of growth in your business.
Duties of a corporate finance consultant
In order to help your business with the aforementioned objectives, a corporate financial consultant may offer the following services.
Finance advisory services
These services are aimed at helping your business make sound financial decisions that will direct the business toward its established objectives, increasing shareholder value. Finance maturity assessments, business valuation, budgeting, and reporting and analytics are some of the associated services.
Finance transformation services
These services are provided to ensure that your business embraces transformation initiatives that will assist in long-term growth, like finance 4.0. This is done to reduce inefficiencies, optimise costs, and integrate processes. These will go a long way in assuring long-term growth, which is vital to add value to your shareholders.
Finance training services
These services are provided to your finance teams to ensure their continuous development. Effective finance training programmes will integrate knowledge-sharing, case studies, and best practices to develop ideal finance professionals. They understand the worth of providing higher value to shareholders.
Finance outsourcing services
These services are provided to optimise operational costs by outsourcing lower-value operations such as reporting, analytics, business cases, and transaction management. A significant portion of cost can be minimised as a result of outsourcing finance services, sustaining profits and increasing shareholder value.
Benefits of corporate finance consulting
The benefits of a corporate finance consultant are multifaceted.
One of the biggest benefits of an experienced consultant is their deep knowledge of financial markets. They are able to identify opportunities where you can raise capital, invest in new projects, cut costs, and manage financial risks adequately.
Financial consultants are also able to identify and solve any problems your company is facing or may face in the future. This focused problem-solving ability will save you time and resources to dedicate to other more productive endeavours.
Corporate financial consultants can also help you make sound organisational, structural, and strategic decisions that will support your bottom line. This will save you the hassle of having to evaluate every financial decision yourself.
Ultimately, the goal of corporate finance management is to drive profits and increase shareholder value. Corporate finance consulting facilitates these objectives with in-depth knowledge and effective problem-solving and decision-making recommendations.
Best practices for hiring a corporate financial consultant
If you are planning to hire a financial consultant for your business, here are the best practices you can follow to ensure you end up with the best option.
- Identify specific needs
The first step is to determine the specific needs you have for a financial consultant. This will help you narrow down your search for a potential choice.
- Define the scope
Once you have identified the needs, define the scope of engagement with your potential consultant. This includes the types of services you may need.
- Look for relevant experience
When choosing a consultant, always look for relevant experience. This means your consultant should have previous experience working in your industry.
- Verify credentials
One of the most important aspects of hiring a consultant is making sure that they are legitimate. Always verify your consultant’s credentials.
- Discuss the fees
Different consultants and consultancies may have different fee structures. Make sure you are clear on the fee structure before leveraging their services.
- Maintain communications
Finance consultancy is not a one-and-done process. Maintain clear communications with your consultant to ensure that your business is safe from financial risks.
Drive profits and increase shareholder value with a corporate finance consultant
Corporate finance consultants assist businesses gauge their financial health and make the right financial decisions to support long-term growth and sustainability. Ultimately, the purpose of corporate finance consulting is to increase your shareholder value by assuring the continued success of the business.
