Value Gap Calculator

The Value Gap calculator is a valuable tool used to show clients (and prospective clients) what’s possible by demonstrating the gap between where their numbers are now and where they could be. 

There are two ways to access the Value Gap Calculator:

1. Through the Main menu > Value Gap Calculator.
   
2. When delivering a service via the calculator icon in the app bar.
   
   

When to use the Value Gap Calculator

This tool has many use cases and can be utilised when delivering the full range of advisory services, from introductory services to high-cost advisory services.

1. To prepare a Value Gap Analysis Report for a client who has paid for this service.
   
2. In the second half of the Annual Accounts Review Meeting to demonstrate what is possible (generate the report if a client has paid for it, otherwise position the price).
   
3. When delivering a Cashflow & Profit Improvement Meeting, where you'll go deeper in the tactics of how you execute the strategy improvements.
4. During the Prospective Client Meeting to show a potential client how you support your clients to improve their business.
   
5. As part of an Accountability Coaching meeting to establish relevant goals and actions and monitor progress.
6. When delivering a lead generation webinar. Attendees can tick a box requesting to pay for a Value Gap Analysis Report on their feedback form. 
   
7. To establish and shrink your firm's own value gap by determining the strategies that you could implement to improve your cashflow, profit and business value. 
   

Note

When a client pays for a Value Gap Analysis Report, we recommend using the Value Gap Calculator as part of delivering other advisory services to streamline the process and continue to add value. 

What does the calculator do?

Convert insights into opportunities

When you prepare Annual Accounts for your clients, you see opportunities that exist to improve their business. The Value Gap Calculator enables you input client data and model the impact of implementing simple improvement strategies on their cash position, profit, and business value.

Provides a visual aid for conversations 

Keep the conversation high level. The calculator is designed to model what's possible if the client adopts the strategies you highlight for them. The data you use doesn't need to 100% accurate, in fact, using estimates will still demonstrate the value gap that exists for your client. The most value for the client lies in having clarity over what KPIs they should aim to improve, and, if they commit to deeper advisory services with you, the tactics to do so.

Of course, the more accurate the data, the more accurate the scenario. Where appropriate, you can use the historic nature of data being used to position Management Reporting with a client, explaining that the demonstration is still relevant but having access to up-to-date financial information will provide more relevant data to use for decision making.

It applies the 5 Pillars of Value Theory to it's calculator formulae

The calculator formulae relate directly to the 5 Pillars of Value and how these impact cashflow, profit, and business value. 

Generates a Value Gap Analysis Report

The Value Gap Calculator produces a bespoke Value Gap Analysis Report that provides a detailed breakdown of the strategies you've recommended your client adopt, and the impact each change could have on their profit, cashflow, and business value.

It also includes an inbuilt disclaimer. This states that the potential cashflow, profit, and business value impacts of the strategies outlined in the report are estimates only. There may be existing circumstances that hinder the realisation of these improvements, and, while you'll provide valuable insights and recommendations, your team cannot accept responsibility for non-implementation of the strategies or for any unrealised improvements.

Tip

1. In a meeting with a prospective client, or where you don't have a client's data, use the example data included in the calculator to demonstrate the value and purpose of the calculator
   
2. We recommend incorporating the Value Gap Analysis Report into your standard compliance offering and charging an annual fee for this valuable tool, thereby increasing your overall client fees
   

Note

Using this tool enables you to develop the financial awareness of your client and position your high-value advisory services so you can support them to achieve more mind, time, and financial freedom.

How do you use the calculator?

In order to launch the calculator, you'll need to select your client. Then you can create and name a new scenario. You can also rename the calculator, with this name flowing through to the report output.

The Value Gap Calculator contains four distinct tabs and an impact summary that is visible from within all tabs. 

1. The Inputs Tab.
This tab contains five areas to input data: Profit and Loss, Balance Sheet, Other Financial variables, Team Members, and Customers and Sales.

Note

The Customers and Sales area is toggled off by default for simplicity (this corresponds to the detailed drivers toggle in the Profit Tab). 

2. The Cash Conversion Tab.

This tab contains three critical strategies related specifically to Cash Conversion that all impact the client's cashflow and cash conversion cycle (debtor days, inventory/WIP days, and payable days).

3. The Profit Tab.
This tab contains distinct sections: Sales, Gross Profit Margin, and Overheads, that have the potential to impact cashflow and profit. The Sales section has a toggle to turn on the ability for more detailed drivers, only use these if relevant to the client (if using detailed drivers, ensure you've inputted data in the Customers and Sales area in the Inputs tab) .

4. The ROI Tab.

This tab focuses on productivity; more specifically, revenue per FTE and the impact of this on effective hourly rate.

Warning

As an improvement in ROI could be through increased sales or improved margin, you should use either Profit strategies or the ROI strategy, not both, as this could be duplicating or overstating potential improvements.

Enter your client's numbers in the Inputs Tab and work through the remaining tabs to identify improvement opportunities

You'll likely have most of this data available for your business clients, if not use pre-work to obtain additional data, or work with the client to include appropriate estimates.

After you've inputted data into the Inputs Tab, move through the Cash Conversion, Profit and ROI tabs and move the levers on the two or three strategies you think will have the biggest impact for your client. As you make changes, the Impact Summary will summarise the impact of your adjustments on cashflow, profit, and potential business value. Be sure to move the levers conservatively to ensure the potential impacts are achievable for the client.

Tip

1. When using the calculator, collapse the left navigation panel using the arrow at the bottom to free up space to view the calculator.
   

1. If you outsource or offshore compliance work, consider delegating the preparation of calculator scenarios (to have the Inputs tab ready) to your offshore or outsource team as part of them doing the accounts.
   

What if my client doesn’t have Cost of Sales and all expenses are treated as Other expenses? 

Payable days is based on Payables ÷ Cost of sales (or Direct costs) x 365 days. If you have a client where all expenses are treated as Other expenses, you can enter all expenses (except any truly fixed costs) into the Cost of Sales / Direct costs input field and leave the remaining fixed costs in the Overheads input.

Strategies

The Value Gap Analysis Report should highlight 2-3 strategies a client should adopt and no more to avoid overwhelm. Unless a client has paid for an improvement meeting or advisory service, you should not spend time unpacking the tactics or actions they should take to achieve this.

Tactics

Bridge the gap between strategy and execution.

The Tactics feature allows you to take your Value Gap conversations to the next level by providing practical, real-world examples of how clients can implement the strategies you’ve recommended.

Each strategy in the Value Gap Calculator has a curated library of specific tactics — concrete actions or initiatives that the client could take to bring the strategy to life. After selecting a strategy, simply choose the relevant tactics that align with your client’s situation. These tactics are automatically included in the Value Gap Analysis Report, offering a clearer and more actionable roadmap for the client.

Tactics provide additional clarity, helping the client understand how they can achieve the improvements being modelled. This increases buy-in, creates stronger alignment between client and advisor, and makes the value of your advisory services even more tangible.

Important Info

During the initial Value Gap analysis, focus on selecting the right strategies to show what's possible — not to deep-dive into execution. Use tactics to demonstrate the deeper "how" when the client has committed to working with you further.

Tip

Use the inclusion of tactics in the report to position your next service offering — e.g. Accountability Coaching — where you’ll unpack these tactics together, tailor them to the client's goals, and set actions in motion. See below section on your firm's value ladder for more detail.

Save a scenario or generate a report summarising strategies and their impact

When you've finished with your scenario, you can save this or generate a report using the buttons at the top right.

Saving a scenario allows you to prepare a client scenario with their data inputted for you to return later. This is helpful if using the calculator with a client during a meeting. In this instance, we recommend noting down your 2-3 strategies and the appropriate adjustments for each so you're prepared for the meeting.

Generate a report after you've adjusted the levers based the strategies you're recommending to the client. This documents the specific strategies you've looked at, and the impact of each, as well as those that haven't been adjusted (which can be considered at later stage). After generating the report, you can download and attach to Meeting Minutes before providing to your client.

Important Info

At any point, you can clear all data inputs, clear the improvements you've made, or reload the example data in the Inputs Tab. Simply click the ellipsis.

Note

1. It should take you approximately 6 minutes to use the calculator to prepare a Value Gap Analysis Report
   
2. You can save multiple calculator scenarios for a client
   

Enhance your advisory strategy

Introduce the 'The Now Where How' mindset

This mindset depicts what you should cover with the client when using the calculator - and - where your support should stop. 

The ‘Now’ is their current profitability and cashflow, the ‘Where’ is what's possible (what you'll demonstrate using the Value Gap Calculator), and the ‘How’ is the additional advisory services or support you can provide to help them get there.

Consider your firm's value ladder when positioning deeper advisory services

Position the services your firm provides that are most relevant for your client.  A likely progression from receiving a Value Gap Analysis Report would be to upsell the client to an Improvement Meeting, or an ongoing ongoing Accountability Coaching programme. 

Note

It's unlikely a client will adopt the strategies you set for them in their Value Gap Analysis Report if they don't have accountability.

Tip

Follow your client up in several months time to see how they're tracking and if they'd like further support.

Opportunity lost is the opportunity cost.  - Monika Singh

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