Question: Have you been trained to build a financial model?

Forecasts get reviewed by management, boards, investors and potential investors. They drive the decisions that those parties take with regards the future direction of the company. Yet amazingly there is no industry standard for how to produce a cashflow forecast.

I find this quite incredible.

When you buy an Accounting System, the software is designed with rules and workflow to make sure you do the right things and do them correctly. It spits out your reports in the IFRS standard, quite probably, and you rely on them as the “Truth”….this is what happened last month, look, the system says it is so.

In addition you are trained to use the software to make sure you are doing it right.

Who shows you how to model a business. Who shows you how best to write formulas, how to linke cells, how to insert checksums. Sure there are courses you can go on and if you train with an accounting firm they will send you on a training course. Very few trained accountants then actually use this training in practice. When an accountant then finds himself in an FD position, he has to recall that training to produce, arguably the most important document that all the stakeholder need to rely on to make decisions.

I would love to know how many FD’s have been professionally trained to produce forecasts. If you have, let me know.