Debt of consulting companies is increasing

There are many consulting companies on the market that provide advice on finance. For some readers this may be a bit absurd, but it is this sector that is currently one of the most indebted. According to KRD estimates, the debt of advisors oscillates around USD 328 million. In recent years, we have seen a significant increase in interest in the activities of Polish consulting companies. Perhaps it is responsible for this greater level of entrepreneurial awareness of society, which directly translates into the number of consumers seeking advice from professionals in the field of finance.

When asked by a statistical Pole, how such companies help, he calmly indicates areas such as tax settlement, optimization of business costs, and information on obtaining funds and grants. And although logic suggests that enterprises dealing with such consulting should themselves be an impeccable model in maintaining financial liquidity, the reality is quite different. Consulting companies are struggling with major financial problems, and worst of all, their debt is increasing year by year.


Extremely valuable, extremely indebted – the reality of consulting companies

The most interesting thing about all this is that consulting companies are really valuable to many Poles. This is evidenced, for example, by the fact that tens of thousands of entrepreneurs a year benefit from such an offer of advice.

The market of Polish consultancy services is valued at nearly 370 million dollars. Such information comes from a report prepared by GoodQuest Consulting in Warsaw. In addition, even a few percent increase in this area is forecast. According to forecasts, consulting companies are expected to record a value of $ 424 million in 2020.

Running large corporations often requires interdisciplinary knowledge. The world of finance seems to be so complex that the directors of such companies often use the knowledge of other entities. However, it turns out that small and medium-sized enterprises also need expert advice, especially when it comes to settlements. So what makes such sought-after companies show huge debt?


The position and credibility of advisers are falling

The position and credibility of advisers are falling

“Both large corporations and smaller entrepreneurs expect the consulting company to have the highest competence and professional support in running a business,” says Giro Lucks, manager of the Reliable Company program, for which the Karansi Group is responsible, the owner of the National Debt Register known to all indebted. That is the most recognizable so-called blacklist of debtors.

These words take on a special meaning, because the consultancy company is entrusted with the fate of the entire enterprise. And while the situation in the organization is stable, the stairs begin at the time of financial crisis.

And here is the question that every entrepreneur raises. Is there any point in entrusting the fate of your business to an external advisor? Since he is a representative of a group with debt of several hundred million – because that is the debt of consulting companies – how should he manage my finances effectively?


As much as 328 million – debt of consulting companies

We have already mentioned that in a statement published by the National Debt Register, consulting companies have debt of 328 million. This debt is shaped by companies that conduct legal, accounting and accounting activities, as well as those dealing with broadly understood tax consultancy.

Four years ago, the debt was only USD 100 million. It should be emphasized that apart from the increase in total debt, an increase in the total number of debtors was also noted. In 2014, 6.1 thousand companies had financial problems. For comparison, last year there are almost two times as many as 11.3 thousand.

“The situation is very uncomfortable, especially from the point of view of consulting companies that demonstrate iron payment discipline and work for a good reputation of the industry” – comments Giro Lucks.


The largest debt from management experts

credit loans

KRD has analyzed all consulting companies that currently operate on our financial market. The list prepared by them shows that those companies that advise on management are the most indebted.

These companies have USD 186 million to donate. In turn, law firms came second in the group of the most indebted consultants. In their case, the current debt amounts to USD 72 million. The podium is closed by companies focusing on accounting and tax consultancy activities. They are in arrears of nearly USD 70 million.


Who do the consultants owe money to?

Who do the consultants owe money to?

The largest percentage among the creditors of consulting companies are private debt collection companies and securitization funds, which received the debts of the original creditors (here you can read more about the debts sold and related possibilities – debt cancellations). Consultants owe USD 145 million to these entities.

Slightly less, about USD 106 million in debt, advisers have towards banks and insurance companies. Further on, we should mention the operators of mobile networks, the Internet and television, which Polish consulting companies are behind with the amount of USD 9.3 million.

Electricity, water and gas suppliers are also waiting for their money. Consultants are in arrears of USD 9.2 million. In turn, enterprises in the construction industry say about 4.2 million dollars. The list is closed by transport and logistics companies with respect to which advisors have to pay USD 4 million.

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