Advisory Services

Assistance for complex transactions

Depending on the nature of their business, many business owners may be unfamiliar with more complex accounting processes such as Restructuring, handling Real Estate, and Mergers & Acquisitions or M&A. Depending on their size or circumstances, financial institutions such as banks, brokerage firms, insurance companies, investment companies, and trust companies may also need assistance with such processes

Advice for M&A and more

To give further assistance to clients engaged in complex M&A deals, we offer comprehensive solutions that cover the entire spectrum of M&A processes including:

  • M&A strategic planning
  • Due diligence
  • Transaction execution
  • Post-merger integration

For distressed companies, our team also provides comprehensive Restructuring Solutions that include:

  • Turnaround Planning
  • NPL(Non-Performing Loan) disposal
  • In-court services
  • M&A advisory

We likewise offer Financial Crisis Advisory Solutions which allows businesses to leverage our complete range of forensic investigation capabilities. These are designed to help clients understand and analyze events or issues, as well as provide strategies for addressing them.

Advice for growing a business

Our team understands the importance of building trust with a business through transparency and maintaining regular communications during the advisory process, which includes helping a business developed strategies for its continued growth. Advisory services also help to make sure that a business stays on track when implementing those strategies, as well as staying on course towards profitability overall.

We make it a point to understand the unique needs and circumstances of a business to provide the appropriate advice based on its performance as well as its compliance with industry regulations.

Our Advisory Services include

Valuation, or figuring out how much an asset, a liability or an entire business is worth plays a vital role in accounting. It involves making certain conclusions about how events affecting a business are likely to turn out, by applying the appropriate techniques and methodologies to the necessary calculations.

Examples of scenarios where valuation may be required include:

  • Applying for loans
  • Buying and selling assets
  • Calculating taxes
  • Conducting audits
  • Division of assets according to a will
  • Filing bankruptcy
  • Mergers and acquisitions

Because of the importance of valuation, many businesses, accounting firms, and regulatory agencies have come to place as much importance on the use of analytics as a means of improving the quality of the data used in valuation.

Analytics also helps to detect fraud and the risk of errors in financial reporting because of its capabilities in enhancing the transparency, efficiency, and efficiency of valuation processes and financial disclosures.

Thanks to data science development, analytics makes it easier for accountants to process and monitor large amounts of data during valuation activities. Analytics likewise provides both businesses and their accounting teams with insights that enable them to better comply with valuation regulations.

Tangibles and intangibles.

A business’ assets for valuation include those that are tangible or physical fixed or current, such as stocks, bonds, vehicles, and equipment; and those that are intangible such as intellectual property, patents, logos, trademarks, and branding. In computing the value of tangible assets, an accountant also considers intangible assets and liabilities.

There are various methods for evaluating tangible assets in particular which include considering the purchase cost of the asset, its selling price, it is expected (versus its actual) cost, or the value of its (base) stock. Intangible assets, on the other hand, are evaluated based on factors that may include tangible assets and the average return on those tangibles, as well as pretax earnings, book value, and market value.

How analytics help.

organization increasingly being used in calculating fair value, which is the valuation of a business’s assets and liabilities that is documented in its financial records. The larger the business, the greater the need for analytics capabilities in helping to estimate fair value because of the risk of human error, fraud, insufficient skills or know-how, or management bias.

In valuation, analytics is particularly helpful in:

  • Gathering and improving the necessary data for fair value estimates
  • Identify loopholes in internal processes used in calculating fair value
  • Ensuring compliance which involves market data and information provided by management

The different types of analytics used for valuation and accounting as a whole include those used to classify and track changes in the data used for financial forecasts, and those used for making recommendations or flagging potentially imprudent business decisions.

Either move forward or don’t—this is the ultimate decision that results from a Feasibility Study, which is a systematic analysis of whether or not a proposed project, venture or approach is practicable. Such a study involves:

  • Understanding the scope of the proposal
  • Identifying potential risks and obstacles to completion
  • Formulating viable alternatives
  • Analysing available and needed resources

Determining the likelihood of completion and success of the proposed project, venture or approach is crucial for any business that will need to make a significant investment into it.

Feasibility Studies protect businesses from involvement in high-risk situations that could lead to serious financial losses, underlining the importance of conducting these Studies correctly. These Studies are also useful when seeking investors or financial support for the proposal.

Many businesses look to independent accounting firms to conduct Feasibility Studies, not just because these Studies are time-consuming and labor-intensive, but also because of the internal biases or vested interests that may be involved in a proposal.

Testing the waters

Feasibility Studies are unique to each proposal, but there are common denominators in the way they’re carried out. The team conducting a Study usually performs data gathering and market research, asks for insights from everyone involved, and prepares project plans and cost estimates, as well as projected income and financial statements.

Expect the team to use tools such as financial models, return analyses, and capital budgets. Note that the proposal itself may be adjusted while the Study is being conducted as areas for improvement come to light, to make sure that the implementation of the proposal stays within budgetary and regulatory limits.

In conducting a Feasibility Study, our team also calculates potential ROI, as well as prepares and assesses the viability of backup proposals or alternatives to the subject of the Study.

Visualising the outlook

Completed Feasibility Studies cover the financial, industrial, organizational, and technical aspects of the proposal’s practicability within the context of the business and its objectives. A Study generally includes:

  • An executive summary
  • An industry or market overview
  • A detailed description of the project, venture or approach
  • Staffing requirements
  • Technological requirements
  • Marketing strategies
  • A schedule or timeframe
  • Financial requirements
  • Insights and recommendations

Remember that cutting corners when conducting a Feasibility Study can, at best, give key decision makers an incomplete or inaccurate projection of the proposal’s intended outcome. It’s essential to give the Studies the necessary time and attention to ensure the success of the proposal to ultimately benefit the business.

There’s no such thing as a 100% risk-free business environment, but it is possible for businesses to manage these risks as well as mitigate the effects of risks that were realized. Our team helps to identify and manage risk to enable a business to provide better value for clients and stakeholders, and to ensure its profitability.

To be able to provide effective risk management services, an advisory team must:

  • Get to know the business inside and out within the context of its industry
  • Determine which present and potential risks take precedence
  • Monitor developments which affect the gravity of risks

Because risk is always present, Risk Advisors must also formulate strategies that are comprehensive and able to analyze and manage new risks as they present themselves. They must be able to use the latest risk management technology and leverage industry-specific knowledge to help business leaders make informed risk-related decisions.

Risk Advisory strategies also involve corporate governance and compliance, as businesses run the risk of heavy penalties when their operations aren’t aligned with industry standards and regulations. This is why Risk Advisory is closely related to Internal Audit, during which “audit risks” are identified.

Types of risk

There’s no shortage of risks faced by a business of any size, which may be broadly defined as anything that may cause a serious loss of capital or business failure. These include cash flow or supply chain disruptions, declining demand, increasing production costs, outdated production technology or equipment, natural disasters, and political upheaval.

On top of the requisite accounting and Risk Advisory proficiency, other types of risk require specialized expertise to identify and manage, such as:

  • Compliance Risk
  • Country-specific Risk
  • Cyber Risk
  • Forex Risk
  • Operational Risk
  • Regulatory Risk
  • Reputational Risk
  • Strategic Risk
  • Systematic Risk

Understand to manage

In calculating the amount of risk, the Risk Advisory team considers operation leverage, financial leverage, and total leverage effect ratios, as well as the ratio for contribution margin. Depending on the level of complexity, advisors may also use calculation techniques used for statistics.

Many factors affect the amount of risk taken on by a business, which includes government regulations, market conditions and competition within the industry, changing consumer preferences. Businesses with a high amount of risk must plan their finances accordingly so as not to allow their debts to become unmanageable.

Family Businesses are estimated to contribute 70 to 90% of the world’s GDP (Tharawat Magazine, Volume 22, p. 36 via gvsu.edu), and generally outperform non-family businesses by 6.65% in the US, and by at least 8% in Europe (Poza 2012, p.3 via gvsu.edu).

Businesses of any size that are owned and/or managed by a family have operational needs all their own that an independent accounting firm, as an unrelated, unbiased third party, is in a unique position to address. These include:

  • Governance and offices
  • Succession planning
  • Business continuity
  • Private wealth management
  • Philanthropy and values
  • Next generation education and transition

Our advisory team can help a Family Business at every stage of its growth by providing insights and recommendations for staying on the right track at the right pace toward business growth.

To be of optimal assistance to Family Businesses, advisors must become, so to speak, “part of the family”—gaining a deep understanding of the relations between family members as well as their overall business goals. It falls to the CPAs on an advisory team to help the family, regardless of these relations, to run the business formally and objectively.

Growing in the present

Objective management may involve helping family members make unemotional business decisions such as those involving promotions, salary adjustments, and non-family team members. This makes an advisory teams’ interpersonal and communication skills about as crucial as its accounting and management expertise.

In this respect, our team may be called upon to assist at family conferences or with conflict resolution. But even while helping to administer the Family Business in its private aspect, our advisory team also assists in solidifying the Business’ market position with services that include valuation and regulatory compliance.

Planning for the future

Only 12% of Family Businesses survive into the third generation, and just 1% make it to the fifth generation (Conway Centre for Family Business via accaglobal.com). This makes planning essential for Family Businesses looking to pass management as well as assets on to succeeding generations. Such planning includes:

  • Succession planning
  • Taxation
  • Risk management
  • Estate planning and trust
  • Contingency planning
  • Retirement

We believe in starting on planning as early as possible to facilitate the transition process when the time comes. Should there be no succeeding generation to take over the Family Business, our team can also help facilitate the transfer of power to a board of directors, for instance, or the sale of the business.