What Is Financial Advisory?

Financial advisory helps business owners make better decisions with money. It brings together strategy, numbers, and practical actions so you can plan growth, protect assets, manage cash, meet obligations, and build long-term value. If you are still asking what is financial advisory, think of it as a trusted partnership that turns financial data into clear steps for your business.

Quick Summary

• Financial advisory aligns your goals, cash flow, risk, tax position, and growth plans.
• It covers planning, forecasting, funding, reporting, business structuring, succession, and exit.
• It is different from bookkeeping and tax compliance. It focuses on decision-making and future performance.
• Engagements range from project work to ongoing outsourced CFO support.
• The right advisor will be qualified, proactive, and transparent on scope and fees. Free discovery calls and clear engagement letters are standard at M2 Corporate.

How Financial Advisory Helps an SME Owner

Financial advisory gives you independent thinking, reliable numbers, and a plan. The goal is simple. Improve cash, profit, and business value while reducing risk and wasted effort. For example, an advisor might tighten debtor terms to release cash, build a 12-month forecast so you can hire with confidence, and set quarterly targets that link to weekly actions. It is hands-on support, not theory.

What Does a Financial Advisor Do for a Business?

Below is a practical menu of services. The mix depends on your goals and stage.

1) Strategy and Growth Planning

Clarify where you are, where you want to be, and how to get there. Set targets for revenue, gross margin, overheads, and cash. Build a one-page plan that the team can follow.

2) Cash Flow and Working Capital

Map inflows and outflows, model seasonality, and set controls for invoicing, collections, stock, and supplier terms. Use a 13-week rolling cash flow so you can make decisions early, not after the fact.

3) Budgeting and Forecasting

Create budgets for the year and re-forecast monthly or quarterly. Tie these to sales pipelines, cost drivers, and hiring plans. This underpins funding, pricing, and capacity decisions. For foundations, read our post on What is financial reporting?

4) Management Reporting and KPIs

Build simple monthly reports that show performance versus budget. Track KPIs like cash conversion, debtor days, inventory turns, and job margins. Use board-style packs for owners and managers.

5) Business Structuring and Asset Protection

Review entities, owners, and risk. Ensure the structure supports scale, profit distribution, and succession. Link this with your accountant and lawyer. Learn more in our guides on What you need to do to protect your assets and How to make a family business succession plan.

6) Funding and Capital

Assess funding needs, strengthen your case with forecasts, and liaise with lenders or investors. Decide between overdrafts, term loans, asset finance, or equity. Keep covenants in view to avoid surprises.

7) Valuations, Acquisitions, and Exits

Estimate business value drivers. Prepare for sale with clean books, strong margins, and repeatable processes. Map earn-out risks. See our pages on Business exit and Business succession planning.

8) Compliance and Tax Alignment

Advisors coordinate with tax and compliance so plans are practical and lawful. Explore our insights on What is compliance in accounting? and Tax planning strategies.

9) Systems, Software, and Process Improvement

Choose accounting platforms and add-ons that shorten the month-end close and reduce manual work. As a Xero Gold Partner, we help clients get real-time numbers and cleaner workflows.

10) Outsourced CFO

Get senior finance leadership without hiring full-time. Expect board-level reporting, cash planning, pricing support, and lender relations. Read more about our Outsourced CFO services.

Financial Advisory vs Accounting vs Bookkeeping

• Bookkeeping records daily transactions and handles payroll. For a primer, see What is a bookkeeper? and Bookkeeping vs payroll.
• Accounting prepares financial statements, tax returns, and ensures compliance. See What does a business accountant do?.
• Financial advisory interprets the numbers to guide decisions on growth, cash, funding, and value. It sits beside the owner to drive outcomes, then coordinates with bookkeepers and accountants so plans are executed correctly.

Here’s a simple way to imagine it. Bookkeeping shows rising debtor days. Accounting reports it at year-end. Advisory fixes it now with new terms, a collections plan, and weekly metrics.

When to Engage a Financial Advisor

• Growth is outpacing systems and cash is tight even with rising sales.
• Margins are slipping and you are not sure why.
• You need a plan to hire, invest, or launch a new line.
• You are preparing for funding, acquisition, or exit.
• You want a monthly board-style pack and someone accountable for actions.
• You are spending too much time in the numbers and not enough on customers.

If any of these sound familiar, start with a short discovery call. M2 offers a free, no-obligation consultation and a written engagement plan with transparent fees and timelines.

What Engaging a Financial Advisor Looks Like

1. Discovery and goals. Understand your business model, risks, and targets.
2. Numbers and drivers. Review reports, customers, pricing, and cost base.
3. Roadmap. Prioritise actions for the next 90 days, then the next 12 months.
4. Implementation. Establish cadences, dashboards, and ownership.
5. Review. Monthly check-ins, quarterly strategy sessions, and annual reset.

You can engage on a project basis or as an ongoing advisor such as an outsourced CFO.

Common Mistakes Advisory Helps You Avoid

• Hiring before cash and margin can support it.
• Pricing that ignores true job costs or overhead recovery.
• Funding without covenant planning or a clear repayment path.
• High debtor days that strangle growth.
• No exit plan, which reduces business value when it is time to sell.

Tools and Reports You Should Expect

• 13-week cash flow and a 12-month forecast that you can update quickly.
• KPI dashboard that links to actions owners control each week.
• Board-style monthly pack with commentary and next steps.
• Scenario models for hiring, pricing, and investment.
• Risk register and a compliance calendar aligned to your obligations. Our Financial reporting and Improving reporting accuracy articles outline the standards these reports should meet.

FAQs

Is financial advisory regulated in Australia?

Some financial advice is regulated, for example advice on specific financial products. Business financial advisory, as described here, focuses on planning, forecasting, cash flow, management reporting, and business improvement. Your advisor should explain where licensed product advice is required and work with licensed professionals when needed.

How is financial advisory different from tax advice?

Tax advice focuses on obligations and savings within the law. Advisory uses your numbers to guide decisions on growth, funding, and value. They work together. Your advisor should coordinate with your tax agent so strategy and tax outcomes align.

What is included in an outsourced CFO service?

Monthly reporting, cash planning, board meetings, lender relations, pricing support, and strategy. It gives you senior finance leadership without hiring a full-time CFO. Learn more about our Outsourced CFO services.

What results should I expect in the first 90 days?

A clear plan, a working cash flow model, a simple KPI dashboard, and quick wins in margin or debtor days. The first quarter sets the rhythm for the year.

How are fees structured?

Most firms use fixed-fee packages, hourly rates, or a hybrid. After a free consultation, we issue a written engagement with scope, timeline, and fees so you can decide with confidence.

Do you work with start-ups and established SMEs?

Yes. We support founders setting up entities and systems, and established businesses preparing for scale, funding, or exit. See Business setup and Business growth.

Can advisory help if my books are a mess?

Yes. We stabilise bookkeeping and reporting, then build forecasts and KPIs. For groundwork, see What to take to accountant for small business and How much does an accountant cost?.

Ready to talk?

If you want clearer numbers and a plan you trust, let’s talk. Book a free consultation or contact our business advisors in Perth today.