The team at Blue Dragon are heavily invested in Microsoft Excel, Power Query and PowerBI to deliver quality financial modelling, data analysis and reporting to our clients. You can have all the funky formulas in the world, but this will amount to jack if you do not keep the end in mind. We ask a simple question at the start; What do we want to achieve with our modelling work? The rest flows effortlessly when we use the following 11 golden rules:
1. Define the outcome from the start and use this as the goal or target that you recalibrate through the project and at the end of the project.
2. Make the model readable by somebody who knows nothing of what it is about (how many times have you picked something up and spent too much time trying to workout what is going on).
3. It needs to be clear on the outcomes including an index with links to the important stuff.
4. It needs to be clear on how you arrived at the outcome including any assumptions you have included and contain an audit trail or breadcrumbs. And just on that, it also needs to group worksheets together for example, inputs, staging, outputs and summary. Don’t just have a whole lot of random worksheets that are untitled. Also, hide worksheets that are historical or potentially confusing … and use consistent conventions and colour coding!
5. It needs to contain error checking, repeat, IT NEEDS TO CONTAIN ERROR CHECKING. It also needs to have validation of source data or external data.
6. Make it variable, do NOT embed fixed values in formulas no matter how simple the model, things always need to be variable.
7. Highlight what data can and can’t be changed and even lock the cells that will break the model (refer rule 5).
8. Include details of who authored the model, date and version control.
9. Ensure you make it printable including headers and footers, use print ranges or make it clear that it is NOT printable.
10. Most importantly, always remember this is a model, it is not an ERP system and should NOT form a part of the operational part of your business. If it does, you are doing it wrong. Just sayin.
11. Finally stretch yourself, google it, reach out to others, have fun with it and enjoy learning something new.
The team at Blue Dragon can assist with all your financial modelling needs including 3-way forecasts, operating and capital budgeting, income tax planning, forecasting, data analysis, dashboards and investment analysis.
Blue Dragon Business Services are tax agents and virtual cfo’s located in Cooroy, in the heart of Noosa Hinterland. We service all areas of the Sunshine Coast and South-East Queensland including Brisbane, Gympie, Ipswich and Logan for tax, BAS and bookkeeping. We also practice as virtual CFOs, take on interim CFO engagements as well as financial management, reengineering and restructures including business turnarounds, transformations and expert financial modelling.
Take a load off your mind and call us for your obligation free consultation.
Let’s chat about your business today.
P: 07 5412 7111