Simon Selkrig, Strategize Financial Modelling, email@example.com, Montreal, QC
The creation of a financial spreadsheet or model may seem a daunting task for most. It is important to write a game plan or have an idea about the information output requirements for users. That way you will better understand your information needs.
A base financial spreadsheet or model should have the following:
The Lookup worksheet stores in the customized tables for drop-down inputs in the financial model, for example a lookup table with the months of the year, which is used in the Assumptions worksheet to stipulate the financial year-end of the financial spreadsheet.
As I discussed in 10 ways to improve your financial spreadsheets, it is vital to keep things uniform, simple and concise. There are two prime factors why stakeholders of a financial spreadsheet or model send it to the scrap-heap; even after someone has spent a lot of time developing the spreadsheet. First, users may not understand how the spreadsheet works and where it is sourcing information from. Adopt a logical process flow with a user guide, and place all external sources in the Model Import worksheets.
Second, users may not trust financial outputs, i.e. they may view the spreadsheet to be an audit risk. Once again a user guide would help, but more importantly implementing comprehensive Error and Alert checks across the spreadsheet, would both mitigate against such audit risk concerns.
The development of a financial spreadsheet or model should be kept simple, clear and concise. The user should be able to readily understand the spreadsheet, and refer to a user guide, if need be. Users of the spreadsheet must have total confidence in the calculated outputs of the spreadsheet. Hence there should be a comprehensive roll-out of error and alert checks to verify and validate outputs across the financial model or spreadsheet.