Bespoke financial models: Building tools as unique as your business

Financial models are more than just numbers on a spreadsheet—they are dynamic tools that drive informed decision-making and provide clarity for business planning. 

Tim Linke, RSM’s National Financial Modelling Lead discusses how bespoke financial models tailored to specific business needs offer unparalleled value in navigating today’s complex business landscape.

Mastering financial modelling: Practice makes perfect

The quickest way to learn financial modelling is through hands-on experience. “Practice, practice, practice,” Tim emphasises. “It’s about building ‘scar tissue’—learning by doing, and having mentors to guide you along the way.” While there are numerous resources available, including online templates and courses, nothing replaces the insights gained through real-world application. 

For professionals looking to build their skills, Tim recommends exploring the Financial Modelling Institute (FMI), a global leader in financial modelling certification. Its multi-tiered certification process offers a robust mix of theory and practical application, making it a trusted benchmark for expertise in the field.

Where to start: Templates vs. bespoke models

Online marketplaces provide financial model templates that can be a good starting point for beginners. However, Tim cautions that these off-the-shelf solutions often lack the customisation required to address unique business challenges.

“A bespoke financial model is purpose-built, designed to meet specific project requirements,” Tim explains. “It allows for scenario analysis and risk assessment, enabling businesses to make informed decisions based on their unique inputs and outputs.”

The process of building a model for a new business project

Before opening Excel, it’s critical to understand the project’s goals and requirements. Tim advises starting with these key questions:

• What does success look like for this project?
• How can a model help quantify that success?
• What are the essential inputs and drivers to consider?
• What outputs and reporting will support your decision process?

Once these foundational elements are clear, the focus shifts to creating a tool with flexible levers and inputs. “A robust and transparent financial model connects key data points, enabling users to test scenarios and make informed decisions,” Tim says.

For guidance on effective financial modelling, RSM offers tailored financial modelling services, ensuring tools are built to align with your specific business needs.

The benefits of learning financial modelling

Developing financial modelling skills offers numerous benefits:

• Industry insights: Gain a granular understanding of how businesses and industries operate – You need to get under the hood and deep dive on how things actually work, before you can model it.
• Problem-solving: Distil complexity into actionable insights by identifying key drivers – Whilst there may be some personal bragging rights that come with crafting elaborate formulas, the real art is creating simplicity and transparency.
• Scalability: Use core skills across various projects, from capital structuring to long-term forecasting – Not quite a one-size-fits-all, but each model gives another trick or tip in a modeller’s toolkit
• User-friendliness: Build intuitive models that stakeholders can easily use to support decision-making – It’s an exercise in frustration if your solution nails the ask, but the end user doesn’t understand how to use it.

“Financial modelling gives you the ability to design tools that simplify complex scenarios,” Tim notes. “It’s not about adding ` complexity—it’s about creating clarity.”

The future of financial modelling: Technology and collaboration

Technology is rapidly transforming financial modelling, with advancements in automation and analytics making models more efficient and reliable. Tools like Python, Power Query, and advanced Excel techniques enable professionals to build smarter, faster models.

Collaboration is also key. “Engaging stakeholders early ensures the model meets their needs and provides actionable insights,” Tim advises. By partnering with experts, businesses can unlock the full potential of bespoke financial modelling.

Ready to build your financial model?

At RSM, we specialise in creating tailored financial models that address your business’s unique challenges. Whether you’re planning a new project, evaluating risks, or seeking better decision-making tools, our team is here to help.

Explore more about our bespoke financial modelling solutions or craft your skills with global leaders like the Financial Modelling Institute. With the right tools and expertise, your business can turn data into actionable insights, ensuring success in today’s competitive market.
    

 FOR MORE INFORMATION

Contact your local RSM office to find out more about financial models.