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Business Modelling

Spreadsheet based modelling plays a very important role in the majority of businesses with the availability of Microsoft Office products and the relative ease of use of applications such as Excel, meaning that anybody can create a ‘model’ from the most simple single page example to the extremely complex utilising elements of automation provided by Visual Basic for Applications (VBA).

We have found that the use of spreadsheets is most prolific in area’s such as accounts preparation and reporting, pricing decisions, investment decisions, budgeting and forecasting and whilst these models can provide business leaders and decision makers with flexible tools in order to make informed decisions, in-house built models can suffer from a lack of quality, robustness and reliability as well as non-existent version control, all of which could have a severe impact on the quality of decision making. In fact, a report published in 2014 by the Institute of Chartered Accountants in England and Wales (ICAEW) on good spreadsheet practice determined that approximately 90% of spreadsheets contain errors. Some material errors have been well publicised alongside the embarrassment and in some cases, the financial losses that have arisen as a result.

Many spreadsheets simply evolve over time without well-structured design or integrity checks and in most cases are poorly documented. Making a minor change can often take a long time or have unexpected consequences resulting in errors from incorrect calculations or input assumptions. 

The 2014 ICAEW report identified 20 key principles of good practice related to spreadsheets, their creation and their ongoing usage. VFD adopts these principles or, if providing an advisory function encourages all of our clients to do so to help reduce risk in spreadsheet models. The ICAEW principles in summary;

The Spreadsheet’s Business Environment

Designing and Building your Spreadsheet

Spreadsheet Risks and Controls

VFD models for your business can help take the worry away from spreadsheet creation allowing your team to concentrate on their day jobs or if you simply require an expert review of key models in use within your business and a professional opinion to give you the assurance you require to validate your decision making we would be a happy to provide the support you need.