Compliance services are required, and there is very little differentiation in the deliverable between practitioners. A tax return or financial statement usually looks the same no matter who prepared it. The fact that most firms include the exact same compliance description on client invoices reinforces that there is nothing special about the compliance report.
Conversely, the advice, expertise, planning and strategy that went into the process before the report was created are very differentiated. Advisory services grow from our unique experiences and expertise, and are the secret sauce that creates value for our clients.
We know this intuitively, but many firms do a poor job of separating advisory from compliance, and communicating their advisory expertise to clients. Advisory supports specialization, which leads to higher-value services and separation from the sea of generalists. However, if we can’t articulate our advisory expertise, it’s a certainty that clients won’t be able to untangle our compliance services from higher-value advisory services.
The AICPA defines advisory services as those services where the practitioner “develops findings, conclusions, and recommendations for client consideration and decision making.” AICPA further provides examples of advisory services that include “an operational review and improvement study, analysis of an accounting system, assistance with strategic planning, and definition of requirements for an information system.” This is helpful, but this definition feels more formal and narrower than how practitioners describe advisory services in their firms.
In a recent Intuit® Tax Council roundtable, firm owners defined advisory services as “taking client challenges and applying strategies to create opportunities in service to their growth.” This definition feels more outcome-oriented than the AICPA definition, and still aligns with the AICPA’s recommendations for client consideration and decision making.
Compliance and advisory services are interdependent — advisory services requiring a foundation of current, accurate books to provide actionable insights. While the suite of compliance services is constant across firms, the offering of advisory services tends to be personalized for each firm. Without a clear line of demarcation between services, some firms deliver advisory services while getting paid for compliance work.
Advisory services in accounting means the accountant provides expert recommendations, options, and strategies to help business owners achieve their financial and operational goals. Often, accountants bring industry experience, accounting technology and process expertise, financial acumen, and an understanding of the client to develop personalized recommendations. Accountants help business owners prosper by providing advisory services, such as tax planning, technology implementation and maintenance, management reporting, cash flow forecasting, key performance indicator dashboards, industry benchmarking, business performance reviews, process automation, budgeting and goal tracking, strategic planning, product price testing, profitability consulting, wealth management, and more.
To better define advisory services, here’s a comparative analysis to illustrate where compliance ends and advisory begins.
Businesses, organisations and governments face a complex and ever-changing global environment which requires them to continuously change and transform themselves in order to remain competitive and relevant.
Our advisory practice, which comprises Deals and Consulting, is the partner of choice to assist global and local clients and governments to design, manage and execute lasting change, based on trusted relationships, deep industry knowledge and professional experience.
Our service offerings are designed to reflect client priorities. Deals aims at helping our clients to transform their businesses by working with them whenever transactions are being contemplated or are in process. Deals provides clients with joined up services across the whole deal continuum from validating the deal strategy and assessing options, through evaluating and executing deals, to making deals successful and realising value from the deal. Consulting has service offerings focused around key client processes that help design, manage and execute lasting change throughout the business life cycle.
Governance, risk management, and compliance are three related facets that aim to assure an organization reliably achieves objectives, addresses uncertainty and acts with integrity.[6] Governance is the combination of processes established and executed by the directors (or the board of directors) that are reflected in the organization’s structure and how it is managed and led toward achieving goals. Risk management is predicting and managing risks that could hinder the organization from reliably achieving its objectives under uncertainty. Compliance refers to adhering with the mandated boundaries (laws and regulations) and voluntary boundaries (company’s policies, procedures, etc.)
GRC is a discipline that aims to synchronize information and activity across governance, and compliance in order to operate more efficiently, enable effective information sharing, more effectively report activities and avoid wasteful overlaps. Although interpreted differently in various organizations, GRC typically encompasses activities such as corporate governance, enterprise risk management (ERM) and corporate compliance with applicable laws and regulations.
Organizations reach a size where coordinated control over GRC activities is required to operate effectively. Each of these three disciplines creates information of value to the other two, and all three impact the same technologies, people, processes and information.
Substantial duplication of tasks evolves when governance, risk management and compliance are managed independently. Overlapping and duplicated GRC activities negatively impact both operational costs and GRC matrices. For example, each internal service might be audited and assessed by multiple groups on an annual basis, creating enormous cost and disconnected results. A disconnected GRC approach will also prevent an organization from providing real-time GRC executive reports. GRC supposes that this approach, like a badly planned transport system, every individual route will operate, but the network will lack the qualities that allow them to work together effectively.[9]
If not integrated, if tackled in a traditional “silo” approach, most organizations must sustain unmanageable numbers of GRC-related requirements due to changes in technology, increasing data storage, market globalization and increased regulation.
· Governance describes the overall management approach through which senior executives direct and control the entire organization, using a combination of management information and hierarchical management control structures. Governance activities ensure that critical management information reaching the executive team is sufficiently complete, accurate and timely to enable appropriate management decision making, and provide the control mechanisms to ensure that strategies, directions and instructions from management are carried out systematically and effectively.[10]
· Risk management is the set of processes through which management identifies, analyzes, and, where necessary, responds appropriately to risks that might adversely affect realization of the organization’s business objectives. The response to risks typically depends on their perceived gravity, and involves controlling, avoiding, accepting or transferring them to a third party, whereas organizations routinely manage a wide range of risks (e.g. technological risks, commercial/financial risks, information security risks etc.).
Business advisory services, often referred to as management consulting or advisory consulting, encompass a range of professional services aimed at helping businesses optimize their operations, improve their financial performance, and overcome challenges. These services are typically provided by specialized firms staffed with experts in various fields of business.
Business advisory services are basically the services offered with the aim for the business’ success and progress. Advisors are usually a team capable of providing all the required information for a business’s advancement and development in almost every field. Usually, that provides information on performance, training, promotion, compensation, and benefits, succession planning and other similar issues. The second form is a separate wing like a consulting wing that provides reports and recommendations to its clients.
The main job of business advisory service providers is to provide adequate information to management about the business and its future prospects. This way, business development, and progress can be ensured. Business advisory board is composed of knowledgeable and experienced individuals, with various business backgrounds. It may comprise business managers, CFO, financial experts, entrepreneurs, venture capitalists, lawyers, accountants, and other similar professionals. Business consultants play an integral role in a business’ development and progress. It is the business owner’s responsibility to choose only the most experienced and qualified business advisors for the development and advancement of a business. Business advisors play a crucial role in a company’s success.
Business advisory services focus on strategizing for the success and growth of the business. it provides consulting service to both public and private sectors, towards building long-term partnership services. Organizations are constantly challenged to evaluate opportunities, across all facets of their business.
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The main objective of offering business advisory services is to bring more focus to the value proposition by delivering a broader range of advisory services and competencies.
Business advisory services encompass a wide spectrum of activities. Some of the key components include:
The process of corporate restructuring is considered very important to eliminate all the financial crisis and enhance the company’s performance. The management of the concerned corporate entity facing the financial crunches hires a financial and legal expert for advisory and assistance in the negotiation and the transaction deals.
Corporate restructuring is an action taken by the corporate entity to modify its capital structure or its operations significantly. Generally, corporate restructuring happens when a corporate entity is experiencing significant problems and is in financial jeopardy.
Usually, the concerned entity may look at debt financing, operations reduction, any portion of the company to interested investors. In addition to this, the need for corporate restructuring arises due to the change in the ownership structure of a company. Such change in the ownership structure of the company might be due to the takeover, merger, adverse economic conditions, adverse changes in business such as buyouts, bankruptcy, lack of integration between the divisions, over-employed personnel, etc.
Corporate restructuring is the process of reorganizing a company’s management, finances, and operations to improve the efficiency and effectiveness of the company. Changes in this area can help a company increase productivity, improve the quality of products and services, and reduce costs. They can also help a company better serve the needs of its customers and shareholders. Restructuring businesses may also result in the closure of underperforming or unprofitable business units.
For some ventures, a company restructure may be a final effort to retain solvency when a firm is in financial trouble and has to restructure its debts with its creditors. To keep the business afloat, the procedure entails reorganizing the company’s debt and selling off non-essential assets.
Restructuring company organization and financial assets through inorganic growth strategies include mergers, amalgamations, and acquisitions, which can be a lifesaver for businesses on the brink of collapse. Creating synergy is the common objective of these company restructuring strategies. The value of the combined firms is larger than the sum of their parts because of this synergy effect. For the most part, synergy might take the shape of higher revenues or lower costs. An individual company’s competitive position and its contribution to corporate objectives are the primary goals of corporate restructuring.
Companies expect to get the following advantages through various corporate restructuring strategies:
Company restructuring strategies resulting in a horizontal merger also have the added benefit of reducing competition.
Mergers and acquisitions allow companies to increase in size and become a more dominant force in the marketplace than their rivals. If you want to build a business by organic means, you'll have to wait for a long time.
It is possible to reduce the cost per unit of production by merging two or more businesses. The fixed cost per unit decreases when the total output of a product rises.
Companies often utilize mergers and acquisitions for tax reasons, particularly in cases where a profit-and-loss firm merges with another. The set-off and carry-forward provisions of Section 72A of the Income Tax Act, 1961.
Companies must pay attention to new technological breakthroughs and how they might be applied to the commercial world. Enterprises can gain a competitive advantage by acquiring smaller firms that have unique technology.
Brand loyalty is a huge driving factor in sales, and many companies will opt to buy a well-known brand rather than start from scratch in order to reap the benefits.
Some companies hope to expand their offerings via the joining of businesses engaged in unconnected fields. It aids in the smoothing of the company's business cycles, hence lowering risk by having a large number of enterprises.
The Insolvency and Bankruptcy Code, 2016 has opened up a new channel for the purchase of a company that is in the process of going bankrupt.
The terms “mergers” and “acquisitions” are often used interchangeably, but they differ in meaning. In an acquisition, one company purchases another outright.A merger is the combination of two firms, which subsequently form a new legal entity under the banner of one corporate name.A company can be objectively valued by studying comparable companies in an industry and using metrics.
The consolidation of companies or their major business assets through financial transactions between companies. A company may purchase and absorb another company outright, merge with it to create a new company, acquire some or all of its major assets, make a tender offer for its stock, or stage a hostile takeover. All are M&A activities.
The term M&A also is used to describe the divisions of financial institutions that deal in such activity.
Valuation is the analytical process of determining the current (or projected) worth of an asset or a company. There are many techniques used for doing a valuation. An analyst placing a value on a company looks at the business’s management, the composition of its capital structure, the prospect of future earnings, and the market value of its assets, among other metrics.
Fundamental analysis is often employed in valuation, although several other methods may be employed such as the capital asset pricing model (CAPM) or the dividend discount model (DDM).
A valuation can be useful when trying to determine the fair value of a security, which is determined by what a buyer is willing to pay a seller, assuming both parties enter the transaction willingly. When a security trades on an exchange, buyers and sellers determine the market value of a stock or bond.
The concept of intrinsic value, however, refers to the perceived value of a security based on future earnings or some other company attribute unrelated to the market price of a security. That’s where valuation comes into play. Analysts do a valuation to determine whether a company or asset is overvalued or undervalued by the market.
Valuation refers to the process of determining the present value of a company, investment or an asset. There are a number of common valuation techniques, as described below. Analysts who want to place a value on an asset normally look at the prospective future earning potential of that company or asset.
There are a wide variety of jobs that a legal secretary comes across during his or her career. Legal secretarial work includes typing, creating charts, graphs, and presentations, managing documents, following up with clients, booking appointments, and other administrative tasks. While many companies would love to hire a legal secretary to provide these services, they find often find it unaffordable. In order to reduce costs, firms around the world have opted to outsource legal secretarial services.
Oftentimes, firms do not have the funds to hire an additional employee that they only need on a seasonal or part-time basis. This is where our legal secretarial services come in. Vee Technologies provides legal secretarial services to law firms by acting as a virtual secretary. We assist law firms on an “as-needed” basis, reducing their clients’ financial burden. We assure that all communications are confidential and that all business objectives are protected.
Business is not required by law to formally appoint a company secretary, but as the guardian of the company’s proper compliance with law and best practice, it is wise to appoint one.
Specifically, a company secretary can complete all tasks associated with the formation of the company (if required) and will meet ongoing requirements such as:
Singh Suri & Company, Chartered Accountants was established in 2009. The Firm has emerged as an Accounting, Tax, Audit & Business Management Consultancy firm providing wide range of services to clients in India and Abroad.
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