Like a Financial Modelling Gym – Get Fit for Purpose

Financial Modelling is the foundation of business decision making, planning and forecasting.

It is at the HEART OF VALUE CREATION.

Accounting & finance is being disrupted like every other industry:

• More startups than ever before
• New business models
• Old business models needing to evolve quickly to stay competitive and relevant;
• Remote Working is changing the game further

There isn’t a single business today where someone doesn’t have to manage some event that causes UNCERTAINTY driven largely by shifts in technology.

We need to invest in better decision making to either expand, defend or simply maintain their market share.

Whether a business is expanding, defending or maintaining its profitability the need for some form of “what-if” scenario analysis is extremely helpful. As an example using a cash flow financial model to assess different business decisions and scenarios. 

No matter the size or stage of maturity, “decisions at speed” are highly valued and financial modelling sits at the core of business decision making.

Scenarios, sensitivities, simulations and building models to a best practice/standardised approach are all part of this skill.

Financial modelling is way more than just planning, budgeting and forecasting.

They are all simply points in time of the same model (assume it’s built well). Just because you can build a long-range plan, budget or forecast doesn’t guarantee you have great modelling skills. 

The demand for financial modelling skills still outstrips supply and good financial modellers are very hard to come by. Hiring them is a needle in a haystack search.  It’s the golden age for Finance if we decide to make it.

Finance is very well placed, assuming we have the right skills, (which most don’t have today), to look forward and hypothesise on these decisions quickly and efficiently.

Gone are the days when producing reports and numbers in the past was valuable, most of this can and has been automated. 

Business owners and stakeholders are expecting more and we have to deliver. Therefore to look forward the skill of financial modelling is vital. 

ROLES WHERE MODELLING IS A CORE COMPETENCY

•  Forecasting, Planning and Analysis roles (FP&A) – typically in medium to larger organisations

•  Corporate Finance both in Investment banks and within large organisations

• M&A – typically within Investment banks

• Business Advisory – this is very broad from SME to large organisations and investment banks.

• Specialist financial modelling firms e.g. Model Citizn and others that provide this service

• Model auditor – mostly within Big 4 accounting firms but there are a few other niche players in this space which also do model builds

• Finance Business Partner helping business stakeholders make better business decisions within medium to larger organisations

• Outsourced or Virtual CFO (still don’t like the term VCFO)

• CFO, yes CFOs still do back of the envelope calcs to chat to the CEO

• Strategic consulting has a heavy focus on “what-ifs” and scenarios. There isn’t a strategy consulting firm that wouldn’t do elements of financial modelling (not necessarily always 3-way).

This may also include operational and business modelling

•Commercial Finance assessing major commercial transactions and negotiations within organisations

• Pricing and Risk Analyst for key decisions that involve taking particular positions or pricing commodities or other instruments.

•Treasury and Financial Markets tend to be found either in banks or large multinational and international trading companies.

One BIG promise: you’ll walk in the door with a “vague idea” of what AI might look like. And just one day later, you’ll walk out with a REAL AI action-plan you can USE right away.

Execution is everything. This is your blueprint for future success…