Introducing ActionPath
Your FHR shows where you stand financially. ActionPath shows you what to do about it. It is an interactive tool inside the FHR Exchange that identifies the financial areas most affecting your rating, recommends proven improvement strategies, lets you set realistic targets based on benchmark data, and projects how your FHR could move if you achieve them. You can then share the plan with your clients to demonstrate the specific steps you are taking to strengthen your financial health.
Where to find ActionPath
ActionPath is available on your account summary page as soon as your FHR has been generated. A banner at the top of the page shows your score on the FHR continuum and prompts you to use ActionPath to understand and improve it. A tab below the banner takes you into the tool.
ActionPath is available to all FHR Exchange members. Creating an ActionPath is available on Basic, Essential, and Pro tiers; sharing an ActionPath with your clients requires an Essential tier subscription or above.
The three-step framework
ActionPath operationalizes your rating insights through a three-step framework: configure your plan, share it with your clients, and demonstrate results by refreshing your rating.
Step 1: Configure your plan. ActionPath presents the financial areas impacting your rating, prioritized by impact, and lets you choose from 14 proven financial improvement strategies. For each strategy you select, you provide commentary, set a target ratio against industry benchmarks, and see the projected FHR impact of achieving it. For a step-by-step walkthrough, see How to Use ActionPath: A Step-by-Step Guide.
Step 2: Share the plan. Once your plan is complete, you can share it with your clients to demonstrate the specific steps you are taking to improve your financial health. Sharing replaces a single rating snapshot with a detailed, data-driven improvement narrative, making it easier to have substantive conversations during onboarding, renewals, and commercial reviews. Sharing requires an Essential tier subscription or above. See ActionPath Sharing Overview and ActionPath Sharing: A How-To Guide.
Step 3: Demonstrate results. Once you have executed against your plan, refresh your FHR to capture the impact. Measure your actual improvement against the projected improvement, identify any remaining opportunities, and update your ActionPath for the next cycle.
The 14 financial strategies
ActionPath organizes improvement strategies into five categories: revenue growth, margin improvement, operational efficiency, working capital, and capital structure. Each strategy maps to specific financial goals it can help achieve. Example strategies include:
Strategy | Description | Financial Goals Supported |
Sales Performance Optimization | Increase revenue by optimizing sales activities, territories, and addressing underperformance | Revenue Growth |
Gross Margin Enhancement | Increase what you retain from each sale through smarter pricing and more profitable product mix | Improve Gross Margin |
Operational Efficiency | Reduce fixed costs to improve operating leverage — from headcount to contracts to underutilized services | Improve Operating Margin |
Liquidity Buffer Creation | Build a financial buffer with credit facilities and cash reserves to meet short-term obligations | Improve Liquidity |
Working Capital Optimization | Accelerate cash conversion by improving how you collect receivables, manage payables, and control inventory | Improve Cash Flow |
The five strategies above are examples; ActionPath offers nine additional strategies across the same categories.
What makes ActionPath different
ActionPath is built around five principles that distinguish it from a generic improvement plan. It is data-driven, focusing your attention on the areas with the greatest projected impact on your FHR rather than the ones that are easiest to address. It is predictive, showing you the expected FHR improvement before you invest time or resources in execution. It is benchmark-calibrated, with targets grounded in real-world data from companies in your industry rather than aspirational numbers. It is actionable, with up to nine practical implementation suggestions for every strategy. And it is methodologically rigorous, built on established accounting and business principles rather than abstract recommendations.
Getting started
For a step-by-step walkthrough of building your first plan, see How to Use ActionPath: A Step-by-Step Guide. For an explanation of how the FHR projection is modelled, see How ActionPath Models the FHR Projection. For sharing your plan with clients, see ActionPath Sharing Overview.