You can always hire some extra help to start you off from scratch – but that can be costly. Or start re-hashing that “old faithful” structure you use time and again – fine, but sometimes trying to do that can take longer and create more problems than starting from a clean sheet. It all takes time and resources. This app is an alternative that can allow you to quickly create lines of the basic, common-all-garden code and structure quickly and cleanly to allow you to work up into a full model by adding the specialised stuff like macros, stunning dashboards or PivotTable reports.
How’s it done?
You define the model time structure (monthly, quarterly, semi-annual and annual). Then you identify your major transaction cycles. A transaction cycle starts with the original driver moves on to the initial accounting and income or cost recognition through the creation of receivables or payables and final cash settlement. In the app they are grouped as revenue, costs, fixed assets, financial items and capital items. These are realised as sets of calculation lines, termed “modules”, which contain all things that are needed to derive the main P&L, cash-flow and balance sheet impacts of a particular cycle. Each module is a mini-financial-model in its own right. There are variations in the main module structures to reflect the impact of inventories or finance-related elements.
Once you have all your modules prepared there is a facility to join them together to create basic Statement of Surpluses and Deficits, Cash Flows and Balance Sheet. These statements can then be used to feed output report structures that meet the particular reporting requirements of your business or modelling exercise. You can then go on to refine the particulars and add data inputs, further cross-checks and output reports from within a ready-made framework. Summarising the main features:
This method is a little different from the classical approach to creating a financial model which concentrates much more on the “data-calculation-output” theme. This app takes a subject, say “Fixed assets – packing machines” and creates everything about that subject on one set of spreadsheet lines: from initial purchase and capitalisation to the cash liquidation of creditors and depreciation. Everything you need to see laid out in simple code in around 50 lines together with basic integrity checks.