What is financial consulting

The concept of “consulting” appeared in the lexis of the inhabitants of Central and Eastern European countries in the late 90s. This word means providing advisory services of a different nature. In Western countries, such concepts as “financial consultant”, “consulting” appeared much earlier, but this also has its advantages, since Ukrainian entrepreneurs have an excellent opportunity to adopt foreign experience, already tested in practice, adapting it to local business realities.

Who is a financial adviser

It is a popular service that means providing up-to-date information, applicable strategies to make your business more efficient. Professional financial consulting means the following:

  • The ability to take into account the specifics of a particular business, field of activity: agriculture, services, industry, trade in raw materials, production of equipment and special machines, medicines, etc.
  • Analysis of the business financial aspect, identification of strengths and weaknesses. It will help to construct a correct strategy.
  • Setting goals for the medium, short and long term. Yes, considering the actual state of things, entrepreneurs are not always able to implement all the recommended changes quickly, just in a few weeks or months after conducting financial consulting. It requires certain material costs, time, personnel training. Therefore, in most cases, such changes are implemented gradually, stage by stage.
  • Independence. A financial advisor is an independent person. Predominantly, he is not an employee of the company, and isn’t connected personally with the business of the enterprise, which allows him to immerse himself in this area and offer the most effective solutions and developments.

Main directions in financial consulting


Areas of activity are conditionally a vector of movement, which depends on the goals and objectives. The financial adviser evaluates investment projects. This is one of the areas, which are relevant to many entrepreneurs. It is important to consider the investment potential of a business objectively, to assess the costs and benefits. The following table also says a lot about the directions in financial consulting:

Capital ManagementIn business, funds are divided into internal and borrowed. The financial consultant evaluates the leverage ratio and gives recommendations on additional fund-raising in the form of loans, credits
Considering the current situationThis is one of the primary directions. A true picture of situation will make it possible to understand the prospects and direction the enterprise, the organization will follow. The staffing situation, investment background and other factors are also evaluated.

And also, it is important to work out an accounting system. This problem is especially urgent for new companies that have just started their business activities. It is much easier to organize financial control immediately at the first stages, rather than later to put in order the financial activities of the company, which were conducted with many violations.

The main stages in financial consulting

Any consulting procedure, and financial consulting is also no exception, implies adherence to stages, that is, operating procedures. There are not so many of them, but each one is essential:

  • Drawing up a true picture, analyzing the situation. A consultation is held, a financial consultant asks for information about the state of the company, the current situation in the financial and related areas. It is necessary to define the goals and objectives of such partnership clearly and make a specific list of accounting and other financial records that must be provided for a financial advisor to complete a full analysis.
  • After studying the information, the problem will be identified, and the advisor begins to draw up a strategy aimed at overcoming the identified problems. All of this is balanced with the goals and objectives that were announced at the first stage.
  • Established strategies, projects, plans are transferred to the client. The financial advisor explains the details of their implementation. If there are questions regarding the implementation of recommendations and strategies, then they should be discussed at this stage.
  • The final stage in consulting, logistics or in another area will be the implementation of advice and strategies. It often takes place under the supervision of a financial advisor who controls the situation in the company after conducting an audit and consulting.

Yes, these stages may seem very simple, not implying any difficulties, but in fact, there is a huge amount of work behind each of them. Therefore advisers know that these stages of consulting include sub-stages. Thus, the operating procedures are much more complicated, with the need to analyze many details and nuances of each specific business.

More details about financial consulting in logistics

Engaging financial advisors in the logistics industry is also appropriate. For example it may concern the performance analysis of warehouses, equipment, information systems technologies, the analysis of staff performance. The task of any financial adviser is to minimize the costs of logistics activities. Logistic activity consists of several links, and each link means time and material costs, output and efficiency. It is them that the financial advisor assesses, allowing the logistics of the enterprise to be more flexible, adapted to realities, and less costly.

Diagnostics of the entire enterprise logistics system and related field is carried out. The prospecting and non-prospecting logistization areas are identified. Post-project support of the company’s business is also essential and it is then that we can talk about an integrated approach and the maximal result. Sometimes the desire at all costs to reduce financial expenses in logistics negatively affects safety, grading risks. So, you can reduce costs, for example, by abandoning insurance, introducing control and accounting systems, and even monitoring at warehouses. But such cost cutting significantly increases the risks of theft of goods, incorrect accounting, property damage and it will not ensure properly organized control over the company staff performance, which also increases the risk of financial losses.

When is financial consulting the most appropriate

Generally speaking, financial consulting in logistics and in other areas is appropriate at any time, at any stage of business development, when it is necessary to optimize processes, to get a true picture of what is happening. But it is believed that there are some stages, moments when inviting a financial advisor will be the most appropriate. The following table will help you understand this:

The moment of taking a decision about business expansion This can be the emergence of points of sale, expansion of production or international expansion.
If the check by regulatory authorities is plannedA field tax inspection can be called a classic. In this case, preliminary consulting, audit is required

Also, managers often want to check proficiency of the accounting specialists, who prepare financial statements, write invoices, and conduct an inventory.

What are the requirements for financial advisors

There is a minimum of requirements for advisors and consultants who offer services in this area. The expert must have a university degree, a good reputation, knowledge in theoretical and practical basis. There are other requirements as well:

  • Understanding specific features of a particular business.
  • Having legal knowledge, including law enforcement practice, prevailing precedents in arbitration and litigation.
  • Taking into account international standards, foreign experience, which will be substantial advantage, allowing to minimize costs as much as possible and introduce advanced accounting and control systems.
  • The financial advisor should be able to assess how information technology is implemented and how rationally it is used, as well as programs that minimize manual worker activities. All information about the logistics chains goes to a common database.

The specialist must be able to work quickly and not paralyze the company’s operation. By explicit or implicit features, he makes a true picture of the situation, draws conclusions and makes recommendations, reporting immediately. The involvement of advisers, auditors in the field of logistics should not complicate the work of the company or prevent employees from performing their direct duties.

Effective approaches to consulting in logistics

The concept of “quality” will probably differ among certain specialists. Unfortunately, in this market segment, there is such a situation that at the end of the events some advisors literally swam the customer with theoretical information. As a result, the client receives not specific recommendations or practically applicable strategies, but abstracts containing many specialized and unclear terms. Such work cannot be classified as high-quality or useful. Yes, difficulties may emerge, because sometimes companies do not have full financial statements or there is no information about the logistics system, performance of the planning and economic, marketing department. Therefore, a financial advisor often acts as an auditor, collecting information anew, structuring it.


It is objective information that will become the key to the success of financial consulting in logistics or in another area. Sometimes it is more advisable to invite experts working in different directions to the team. The performance of technical staff, which directly generates information flows, is also analyzed. The procedures for data collection, processing and systematization are analyzed. It is not always possible to implement advanced technological solutions, because the company lacks the appropriate material base. Even basic software is not available in all businesses. It means that it will be impossible to collect, transmit, process information effectively.

The key to success will be knowledge in production technologies, that is, taking into account the nuances of a particular enterprise. As practice shows, financial advisors are able to solve another important problem effectively – keeping commercial secret. The financial information of the company is also of great value. Trade secrets, business performance reports must not be passed on to third parties. Therefore, the task of the advisor is to elaborate recommendations for the information security of the business.

Sometimes, in order to minimize costs, it is recommended to outsource some areas of the company’s business. This completely applies to logistics, client interaction, warehouse operation, cargo transportation, and other areas. There is no doubt that the requirements for financial advisors will continue to grow. Such trend is observed all over the world. This occupation requires responsibility, which implies the necessity for constant enhancement of education. This is compensated by the fact that the salary of professionals employed in this area is one of the highest. Representatives of small, medium and large businesses apply for services, including holdings, trading houses, retail trade networks.