You are probably so entrenched in the day to day running of your business that you may not have even had time to think about what a financial analyst could do for you, much less hire one. Financial analysts, however, can be an integral part of your team and provide valuable insights that improve organization and efficiency. The following are 9 reasons why your business would benefit from a financial analyst.
(1.) Identify Financial Strengths and Weaknesses
One aspect of your business may be bringing the company profits up and be a shining star that does not receive the credit it is due, while another part of the company may secretly be draining funds and not producing as well as it should be. Financial analysts will identify the strengths and weaknesses throughout your business, which will help you identify problems and possible solutions while allowing you to continue to capitalize on the things your business is already doing well.
(2.) Improve Efficiency
Financial analysts are data crunchers. They look at the numbers from your various expenses and can make recommendations as to where money is being overspent. Perhaps your shipping process isn’t streamlined enough and is costing you almost double what it should. Your financial analyst may compare the data from your company to similar companies and notice you are spending well above average in a certain category. This information is critical to improving the efficiency of your company.
(3.) Better Bookkeeping
Your financial analyst can work with those on your sales team to help them understand timelines in accounting. Processes can be further developed or created to ensure that invoices are created and sent in a timely fashion, travel expenses are recorded and reported quickly, and that all financial paperwork is turned in on time so that accurate reports and projections can be drawn. You may find that even though you had a system in place, your financial analyst can improve upon how financial paperwork is recorded and turned in.
No one can see the future, but financial analysts can provide you a glimpse as to what they see happening based on past data and industry trends. This can help you prepare for your needs in the future in terms of hiring employees, purchasing supplies, and knowing times of increased and decreased activity. These types of forecasts can be extremely useful and predict problems you may not foresee.
Financial analysts are experts at compiling all types of different reports for your business and then offering recommendations based on the findings. There are numerous areas of your business that can be looked at and then compared to past years and in comparison to others in your industry as well. This type of reporting and data analysis is beyond what you probably have time to compile yourself as well as the knowhow to do. Financial analysts are professionals at receiving data, summarizing and concluding findings, and recommending change.
You may be under or over pricing your products or services, leading to a loss of revenue by either not accurately valuing what you are offering or scaring away potential consumers or clients with your pricing. Financial analysts can assist you in creating a pricing structure that makes sense for your business and will maximize your profitability.
Financial analysts can help your business develop a budget that is reasonable and takes into account all of your expenses as well as forecasted increases and decreases. Sticking to a budget will benefit your business long term and keep accountability for spending.
One of the qualities you want to look for when hiring a financial analyst is their ‘soft skills,’ including their ability to work as a team member and communicate effectively within your organization. This is because your financial analyst can positively impact the communication lines within your business. Through meeting with sales teams and employees, financial analysts can explain the needs for certain decisions and foster a team mentality. Analysts can create presentations based on their reports that are easy to understand for the rest of the team, reinforcing the need for certain policies and processes, for example invoicing and travel expense procedure, etc.
(9.) Various Needs Specific to Your Organization
Do you need a financial analyst that can also handle payroll? Are you having issues with accounts receivable you need resolved and managed? Financial analysts can hold various roles within companies depending on their specific needs. Financial analysts can track your transactions and categorize them, improving on the accountability of where your money is going. Whatever it is your business needs in terms of financial analysis, reporting, and recommendations, financial analysts can help.
If you have been too busy to consider these needs within your company, perhaps it is time to hire a financial analyst. When you think about the costs you may be accruing from truly not understanding the financial aspects of your business, you may realize you can’t afford not to.