RSM New Zealand

What is a growth options report?

We have been offering growth option reports to our clients for a few years now and still we often get asked “what is a growth options report”. To help explain it, we thought it may be useful to provide a real life example.

What is a growth options report?

A growth options report looks at the “big numbers” in a business and helps to identify areas within the business where change can/should be made. It does not provide answers, but highlights areas requiring some attention.

Once a report is prepared we don’t just give it to you and forget about you – we work with you to form an action plan to implement the changes.

The example of success

A client approached us for help with their business. While the business was highly profitable it really struggled with cash flow and relied heavily upon their overdraft facility – the directors could not understand where there money was going.

We prepared a growth options report.

The Results

The report showed that the key contributing factor to the cash flow issues were debtor days – the projections from the report showed that by reducing debtor days from 52 to 45, cash flow could increase by $100k.

By converting the 7 day reduction in debtor days into a dollar value it helped our client see the issue.

The suggested action plan was to focus on reducing debtor days by reviewing terms of trade and having an increased focus on overdue accounts.

Within 3 months the client debtor days were 34 and they had nearly $300k in the bank.

Needless to say the business is thriving even more than before!

Of course every business has different needs and will respond to different drivers and this is just one example of what can be achieved.

To talk more about getting your own growth options report prepared, contact your regular accountant or one of our two specialists in the area – Scott Garratt, Principal based in Albany or Craig Cooper, Principal based in Highbrook.

We look forward to helping you grow your business.

Would you like to discuss this topic further?

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Authors

Grant Hally
Partner - Auckland