FINANCIAL MODELS FOR THE DECISIONS AHEAD

Inherited a spreadsheet?
Understand what it does.

A scoped review of an existing financial model’s structure, calculations, assumptions and usefulness for the decision ahead.

Defined scope. Documented assumptions. A model you can understand and use.

Explore a worked example ↗

ACA

Kishen Patel, BFP ACAICAEW Chartered Accountant

Agree the review boundary.

Identify the model version, intended use, software, outputs and known concerns. Decide whether the work covers selected calculations, the overall structure, commercial assumptions or a defined set of reconciliations. A scoped review is not automatically a formal model audit or assurance opinion.

Look for logic, not just formula errors.

Checks may include broken references, inconsistent formulas, hard-coded inputs, circularity, signs, date alignment and external links. A formula can be syntactically valid and still implement the wrong assumption, so the review should consider how the calculations work together.

Test changes through the outputs.

Change a key assumption and trace its effect on cash, debt, profit and other relevant outputs. Investigate results that do not move as expected. Review whether scenarios switch consistently and whether balances roll forward without hidden plugs.

Repair with a clear record.

Where remediation is agreed, document material changes, remaining issues and limitations. Preserve an original version and explain update steps at handover. A full rebuild may be more appropriate than patching a model that no longer fits the business, but that decision should follow the review.

Choose the review depth around the decision

Start with the consequence of a wrong result. A monthly planning workbook and an acquisition funding model may need different review procedures, evidence and documentation.

Calculation review: identify the sheets, formulas and reconciliations to be tested.
Commercial review: assess whether assumptions reflect the business and available evidence.
Scenario review: trace changes through cash, funding requirements and decision outputs.
Handover: agree an issue log, repair responsibilities and retesting of agreed changes.

Record the exact file version reviewed. Changes made afterwards can alter the findings, so retain a baseline and identify when a further review is needed.

Questions about this scope

What should I send before a financial model review?

Start with the model’s purpose, software, deadline and known concerns. Once secure sharing and scope are agreed, provide the relevant file, source assumptions and supporting records you are authorised to share.

Can you review only part of a model?

A limited scope may be possible, but dependencies on other sheets and external files need to be understood. The findings must make the review boundary clear.

BEFORE WE BUILD

Your modelling
questions.
Answered.

Can you fix a model somebody else built?+

You can enquire about an existing model if you are authorised to share it. We first assess the file, intended use and scope; access restrictions or missing inputs can limit the work.

Does a review certify that every forecast is correct?+

No. Forecasts depend on assumptions and uncertain future events. Review findings apply to the agreed procedures, version and scope, rather than guaranteeing future results.

MAKE YOUR NEXT DECISION A CLEARER ONE

Need a financial model?
Let’s connect the numbers.

Discuss my model ↗

A clear brief. An agreed scope. A useful next step.

CONSULT EFC · PRACTICAL GUIDES

Go deeper before your next decision.

The assumptions register behind a useful financial model

Make a financial model easier to challenge and maintain: document input sources, owners, confidence, scenarios and the decisions each assumption supports.

Read the guide ↗

Why a growth financial model can show a cash shortfall

Explore the gap between profit and funding needs through debtor days, stock, supplier terms, hiring and investment in an integrated financial model.