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financial advice in time of stress

Financial Advice In Times of Stress

As a business owner, you’re expected to perform many roles. Juggling various aspects of the business – like developing customer relationships, handling employee issues, and managing cash flow – is time consuming but necessary to keep the business operating.

At times, competing priorities and demands on your time can make it di icult for you to make good business decisions. It’s in times like these that the importance of having trusted advisers – such as mentors and finance, tax and legal advisers – is highlighted. Advisers on whom you can call as a business owner to help you make structured and sound decisions about your business’s future.

In some circumstances, you may find that managing and planning your business finance is best left to a professional. Having the objective, professional observations of a financial adviser is invaluable at every stage of business growth.

A financial adviser provides timely insights regarding factors such as your exposure to risk, where you can economize, and opportunities for investment, ultimately helping you achieve your financial goals.

Of course, all business decisions are ultimately the responsibility of the business owner, and before implementing any advice, it’s worthwhile taking a step back and considering the impact that any decision or strategy could have on the broader business.

Tax Decisions Impact Future Lending

As tax deadlines draw nearer, the need for solid and structured advice is even more apparent. Business owners facing overwhelming tax bills could be compelled to enter into an arrangement with the IRD to pay off their tax bill over time. However, this arrangement could hinder any future lending the business requires, as tax debt in any form may be viewed as a red flag and an indicator that a business is having difficulty meeting its commitments.

While the situation is easily explained – particularly in an economic downturn or following periods of economic instability – many lenders will automatically decline a loan application in these circumstances, or at the very least, treat it as a higher risk application and increase the applicable interest rate charged.

In this situation, an experienced financial adviser can help you understand the nuances of lending policies, and importance of cash flow requirements prescribed by lenders, and how these can be used to maximum e ect in your business. A financial adviser also acts as a liaison between you and your other professional advisers, such as your accountant, business attorney, and insurance adviser, who play a pivotal role in your long-term business success.

Hiring a financial adviser to help you manage specific financial tasks, such as borrowing for business, not only saves you time and money, it can alter the course of your business, helping you avoid risks and making the most of opportunities.

Exposure to Bad Debt

One area that business owners have far less control over is that of bad debts. A business that provides its services on terms is always exposed to the risk of their debtors being unable to pay.

While this may be true to some extent, business owners do have control over whether or not to extend trade terms to customers, how proactively they manage accounts, looking out for signs of distress and increasingly late payments.

One of the best ways to counter issues with bad debts is to enlist the help of a financial adviser and an accountant, to help you take control of your business’s financial path. Together with your accountant and financial adviser, you may be better placed to make decisions about debt consolidation.

Debt consolidation coupled with establishing internal accounting processes (using the help of your accountant) may help the business better monitor its income and expenses, and help you avoid costly mistakes. What’s more, a financial adviser can also assist in arranging insurance to cover against the risk of bad debts.

Embark With a Plan

Most people wouldn’t go on a long journey without a plan, so why would a business owner embark on a new venture without first seeking advice and taking instruction beforehand?

A financial adviser has the experience and expertise to help you make your most important financial decisions. Success in business is about recognising your strengths and using the skills of other professionals to support you and your business. A Mortgage Express branded financial adviser is someone who can help you achieve exactly that.