Benson Wood + Co Book a Call

Growth Reports

When the decisions are getting bigger, you need more than a rough idea of how the business is doing.

Growth Reports

At some point in a growing professional services firm, the numbers stop being something you can comfortably keep track of in your head.

The work is coming in, the team is busy, but you’re not completely sure what it’s all adding up to. The bigger the decisions in front of you, the more uncomfortable that gets.

The problem is that the only financial picture most firms are getting at that stage is the annual accounts, and by the time those arrive, the year’s already done.

That’s the gap a Growth Report fills.

Find out more about Stay On Track

Why growing professional service firms need management accounts

Growth Reports are what we call management accounts. They are financial reports prepared for you rather than for HMRC or Companies House, produced monthly or quarterly depending on your level of support.

They give you a clear picture of how the business is performing while there’s still time to act on it, reviewed with you at each meeting so you’re not left working out what the figures mean on your own.

What do Growth Reports tell you about your business?

One of the most common things we hear from new clients is that they had figures but nobody to explain what they meant.

Every Growth Report starts with a jargon free commentary on the period. It’s a written summary of what happened, what needs your attention, and what needs a decision.

We also track specific KPIs against targets and the previous period so we can spot trends over time. That’s what our meetings start from, so there is something specific to work through rather than a set of figures to sit with alone.

The financial section covers revenue broken down by service line, gross profit margin, operating profit, and how those figures track against your Business Roadmap.

Cash flow is covered separately, showing what’s in the bank against what’s sitting in outstanding invoices and how debtor days have been moving.

For Grow With Confidence clients, the report goes significantly further and becomes a complete board pack, including team, marketing, business development, operations and risk sections.

What happens in a Growth Report meeting?

The report goes to you before we meet so you have had a chance to read through it. When we sit down together we go through it, explain what the figures are telling you, and talk through anything that needs a decision.

If you’ve had a set of accounts arrive and been left to make sense of them on your own, you’ll know how much use that is when you’re trying to decide whether you can afford to take someone on or whether a part of the business is performing the way it should.

For Stay On Track and Grow With Confidence clients, we meet regularly. If something comes up between meetings you can easily reach us and talk it through.

What changes when you get regular management accounts?

Most things that go wrong in a growing professional services firm don’t go wrong suddenly. They drift.

When you’re reviewing the numbers regularly, things that may have drifted get picked up while it’s still manageable. A service area that is underperforming shows up in the margin figures, and if debtor days are creeping up, that shows up in the cash section.

The growth analysis tells you whether the business is heading in the right direction over time, not just whether last month was better than the one before.

The bigger shift, for many of our clients, is in how decisions feel. When you’ve been through a Growth Report in the past few weeks, you’re making calls about hiring or investment with a current picture of where the business stands and the numbers to back it up.

When does a growing firm need Growth Reports?

The usual signal is when instinct no longer feels like a reliable basis for the decisions in front of you. The calls you’re making have more riding on them, and roughly isn’t good enough anymore.

It’s also when the limits of the existing accountant relationship become hard to ignore. The compliance work gets done, but nobody’s looking at the figures with you during the year, and there’s no real conversation about what they mean. If that describes your current situation, you’ve probably been ready for this for a while.

Why do I make a profit but have no cash?

This is one of the most common questions we hear, and it’s worth answering properly because it catches out growing firms more than almost anything else.

In a professional services firm, there’s often a significant delay between work being done and money coming in. Billing lags behind delivery and invoices take time to collect, but wages go out every month regardless.

A business can look profitable on paper while the bank account tells a different story. A Growth Report makes that visible, showing how work, billing, profit, and cash are feeding through the business together.

Growth Reports planning session

Growth Reports

Growth Reports are included in the Stay On Track and Grow With Confidence packages

Find out more about Stay On Track Find out more about Grow With Confidence

FAQs

Regular management accounts are the most reliable way to find out during the year. A bank balance tells you what cash is available right now, but that’s not the same as knowing whether the business is profitable. A profit and loss prepared quarterly or monthly, reviewed with someone who can explain it, gives you a current picture while you can still act on it.

Management accounts are financial reports prepared monthly or quarterly to help you understand how your business is performing during the year, rather than waiting until the annual accounts are finalised. At Benson Wood, we call them Growth Reports.

Management accounts for a professional services firm should cover profit and loss broken down by service line, gross profit margin, cash flow, and how quickly invoices are being collected. Client retention and new business activity are worth tracking alongside the financials because they show where the business is heading.

For a growing professional services firm, quarterly is the minimum that gives you a useful picture of performance. Monthly makes more sense when the decisions you’re facing are significant or the business is moving quickly.

A Growth Report meeting starts with the report sent to you in advance so you have time to read it. When you sit down together, your Client Manager goes through the figures with you and talks through anything that needs a decision.

Xero holds your financial data and keeps it up to date, which is a useful starting point. Management accounts are a prepared summary of what that data is telling you, reviewed with your Client Manager in the context of your business and your plan for the year.

The most important KPIs for a professional services firm are gross profit margin, debtor days, fee income against the annual plan and client retention. We also look at new business activity, leads coming in, proposals going out, and clients won.

Annual accounts are prepared after the year has ended, so by the time they arrive there’s nothing you can do about what they tell you. A Growth Report closes that gap.

Float is cash flow forecasting software that connects to Xero and projects what money is coming in and going out over the months ahead. We use it with Grow With Confidence clients to produce monthly cash flow forecasts.