Advisory Services: Helping Clients Thrive with Advisory Services

Posted by: Dan O’Connell || Posted on: December 14, 2015

Many businesses face uncertainty, whether it be from added competition, increased expenses, or a slowing economy. Some businesses have restricted cash flow and need help, others are not as profitable as they need to be, but they don’t have the time, manpower, or expertise to address the issues, and still others have a difficult time securing loans to finance their working capital and growth needs. As business owners get older, they become more concerned about building business value and transitioning from one generation to another. Some might want to review the tax implications and begin estate planning, or review all exit strategies. Still, others just have a desire to better understand exactly how they are doing and want to do better.

The accounting firm has the ability to offer insight and expertise if called upon, but the business owner doesn’t think to ask for assistance. The firm isn’t always aware of the company’s needs.

Business Assessment

Fiscal Advantage is an online software tool that provides a comprehensive financial analysis on small to mid-sized business, with six reports that are customized for each entity, and illustrate a deep understanding of the financial health of a business. The analysis allows the advisor to focus on solving problems rather than completing the analysis.

The interactive forecast project three years so a business can see what will happen if their current trends continue. The software allows the business to change key variables to see how these changes affect future cash flow, which helps with planning.


A business assessment report is an effective communication tool for the advisor and client to define problem areas of the business, and explore solutions together. The reports connect client improvement opportunities and advisor expertise.

Fiscal Advantage identifies specific shortfalls and their cost to profit, cash flow and equity value. Shortfalls are opportunities for improvement. Advisory service firms apply their expertise on: business strategies, financial review, long-term planning and transactional strategies. Advisors propose solutions outlining these opportunities in dollars, combining their expertise with the actionable data from the Fiscal Advantage services.

Business Strategies
Business Planning Cost Controls
Growth Strategies Pricing Strategies
Offsite Controller Profit Sharing
Cash Management Performance Bonus

Business Strategies broadly analyze the income statement and balance sheet. A close review of the Profit Driver Report will highlight four of the cash drivers of the business. The COGS (if applicable) and the operating expenses will review cost gaps between the business and the industry as well as the business and what the business has achieved. The Executive Summary reviews the breakeven performance of the business for an overview of the profit left in the cost structure of the business (excessive expenses). Advisors are positioned to help reduce expenses and increase profits.

The Profit Driver Report reviews two other business areas: capital expenditures and pricing-sales volume strategies. Capex spending is compared to the industry’s fixed cost as a percentage of assets as well the business’s sales and sales trends. Advisors can help analyze and plan capital expenditures which results in improved cash flow, reduced expenses and operational challenges.

Fiscal Advantage analyzes ‘new sales’ by their profit and cash contribution (or loss). Advisors can assist in analyzing how selling strategies and growth opportunities impacts profit and cash flow, especially if current trends continue. Fiscal Advantage’s sales analysis provides advisors a tool to see how new sales, receivables, inventory, payables, expenses and capital investment, interact. This review highlights the sales quality.

The Cash Driver Report reviews the business’s cash management. The three cash drivers (receivables, inventory and payables) are analyzed. The Report compares the company’s cash management practices to the industry, and to the business’ recent best performance. The cash conversion cycle analysis offers advisors a great way to discuss the ‘real’ cost hidden in the balance sheet. Cash management is the fuel that runs a business, and the Report identifies these areas for advisors to help businesses maximize cash flow.

Financial Review
Cash Flow Analysis Shareholder Reports
Budgeting Analysis Operational Review
Forecasting Cash Project Integration

Financial Review services consist of reporting on historic operations, forecasting, budgeting, and an integration or overview of the business’s operations. Building on the previous reports, the Lenders Report offers a review of these subjects.

The UCA Cash Flow Statement offers a strategic review of where cash is generated and consumed. Advisors who understand the business’s pressure points, are positioned to offer solutions. Helping clients understand historic Cash after Debt Amortization (CADA), and what the cash surplus or cash needs mean, leads to the forecasting process.

Businesses need an accurate three-year model of forecasted EBITDA, Cash after Operations and the cash needs of the business. Fiscal Advantage has incorporated an easy-to-use tool for users to facilitate these reports in an easy-to-understand format. From here, advisors can help with goals, forecasting and budgeting for the business.

Long-Term Planning
Estate & Trust Plans Succession Plans
Tax Planning Financial Planning

Long-Term Planning continues to build on all reports outlined in this article. The Business Valuation Report provides the advisor with a professional tool to discuss the value components of the business with shareholders, and to discuss transition plans, estate, trust and tax planning. The Valuation Report can lead to full tax compliant advisor valuation from the advisory firm.

Transactional Strategies
Business Valuation Business Purchase
Shareholder Buyout Equity Investments
Sale Positioning Debt Financing

Transactional Strategies build on all reports; with more emphasis on the Lenders Report and the Business Valuation Report. Most clients are in business to earn a good return on their work and investment, and build enterprise value. Owners tend to have a strong interest in what their business is worth, particularly if they are thinking of selling the business in the next five years.

The Fiscal Advantage valuation utilizes traditional valuation methods in arriving at fair market value. Explaining to owners how operations impact business value is useful. This conversation supports the advisor, to help build future owner’s discretionary income, valuing undervalued assets or in positioning the company for a future sale and tax planning. Business enterprise value ties together all business components, and is useful in business planning every year. Valuations act as an annual report card by summarizing critical data.

The Valuation Report is useful in raising equity from investors. When securing loans, the Lenders Report will shine light on how the lender views the earnings, asset collateral, leverage, cash flow and the business’s debt repayment ability.


Businesses buy advisory services from someone they trust. Taking the time and care to fully understanding a client’s business builds trust. When advisors can apply patterns and data effectively, communication is enhanced and solutions can be thoroughly discussed.

Listen to what is on the client’s mind. Explore opportunities with clients and deliver the needed services with measurable results.

Fiscal Advantage is a communication tool that encourages conversation and what is on the client’s mind. Through discussions come opportunities. Advisors enter a win-win situation, improving profits for both client and the advisory firm. When clients need answers to business issues, make sure you have a seat at the table.