The big picture
Corporate financiers at accounting firms are usually qualified accountants. They work closely with bankers and lawyers on deals, other transactions and projects that involve analysing businesses' financial structures and finding new sources of funding for them. A role in corporate finance requires a combination of the accounting skills involved in audit and tax with the strategic thinking and market focus of consulting.
Why are corporate financiers needed?
Corporate financiers are responsible for examining companies' accounts and communicating their findings to stakeholders, including lenders, shareholders and the board.
The role of a corporate financier is arguably one of the most important roles in a transaction or restructuring, as many of the stakeholders rely on their analysis of the numbers in order to make key decisions.
On the job
Most of the work involved in corporate finance requires a thorough review of a business' accounts, either to assess a problem (such as a lack of capital) or so that the business can progress with a deal (such as a merger).
It also involves a lot of communication with the various stakeholders of a business, from shareholders right up to the board, to ensure the process of solving a problem or undertaking a deal runs smoothly.
That tends to mean writing detailed reports that put key findings into words.
Areas of corporate finance
- debt advisory
- mergers and acquisitions (M&A)
- transaction advice
In practice: we spoke to a former assistant manager in restructuring who worked at a Big Four firm
What kind of work did you do?
My main role was in the restructuring team in my firm's corporate finance division. I was involved in insolvency work, which meant I was helping companies in stressed and distressed situations.
I used my accounting skills to analyse complex data held by the companies about their finances. I would then help compile reports based on my findings, and regularly spoke to creditors, shareholders and other stakeholders about the state of companies' accounts.
The length of each project varied depending on how distressed the business we were dealing with was. For example, when I first joined I was working on an insolvency that had been going on since 2007. Other work, such as an internal business report (also known as an IBR) would only take a matter of weeks to compile.
What kind of clients did you act for?
Most of the insolvency work I did was with major banks who were undergoing restructuring, but at the more junior level you get to work in a number of different areas.
I did some restructuring work for a media company and a hotel chain, while some of my colleagues worked on retail administrations. Generally, as you progress you become expert in a particular industry.
Can you give an example of your work?
I worked on the restructuring of a newspaper business, which was really interesting. Right now, with the proliferation of digital news channels, the newspaper industry is facing a massive challenge when it comes to maintaining profit margins.
The newspaper I was looking at was once generating enough income to support the level of money it had borrowed, but as its circulation dropped so did its revenue, and the business became distressed.
Part of my role was investigating what assets the business had that it could potentially sell in order to free up some cash - for example, I spent a lot of my time looking at the business's operations in South Africa.
As I was involved in the restructuring, I was also exploring various steps the business could take to stabilise itself, which meant talking to my firm's consultancy arm about their work analysing the newspaper industry.
What did you enjoy about corporate finance?
Corporate finance work is often extremely varied. Also, while in audit you tend to be checking accounts are in order, corporate financiers are solving real business problems. That said, you have to be willing to accept that, as with every junior role, there's still some less exciting work to be done.
What kind of person is suited to this area of work?
The kind of people I worked with were very ambitious, but I wouldn't say they were arrogant. In fact, being humble and receptive to advice and guidance is a really important quality in corporate finance, especially when it comes to dealing with stakeholders.
You have to be a good communicator with a lot of tact to make sure stakeholders understand exactly what's going on. You also have to be able to show empathy towards the clients you're working for. After all, it's often one of the most distressing times for a business. On occassion I even had shareholders calling me who were worried about their investment - often everyday people, not big pension funds.
I would also say that you have to be a bit of a risk taker to apply to work in corporate finance because it's typically the stream with the fewest graduate places.
What are the current big issues in corporate finance?
As the UK economy slowly gathers momentum, insolvency work will become secondary to transaction assistance or M&A deals. However, it's fair to say that in times of boom, companies will still need restructuring advice to grow.