Organisations big and small engage in building spreadsheet financial models to plan their cash flow, assess projects, or investigate acquisitions.

These models are often built ad hoc or without due planning, care and attention, and stories of faulty financial models are common. What’s more, procurers of financial modelling – whether from internal developers or from professional model-building organisations – often struggle to articulate their needs and make sure that they get a quality product.

While there are modelling methodologies and standards aplenty, these are often overly prescriptive or organisation-specific. So ICAEW’s Excel Community has worked with a broad swathe of modelling organisations and experts, taking a half dozen methodologies and paring down to the commonly held, widely accepted beliefs about what constitutes good modelling. Thus, we’ve created the Financial Modelling Code.

This code lets procurers set a neutral best-practice standard for any model they requisition, and provides a basis for good practice for any organisation carrying out their own modelling, whether big or small. The recommendations are high-level and closely aligned to ICAEW’s Twenty Principles for Good Spreadsheet Practice, allowing for each individual modeller to apply their own judgment on how their model should look and feel.

• Get an understanding of what distinguishes good financial modelling from bad.
• Inform a conversation about best practice with a modeller you are considering hiring.
• See how your own modelling practice compares with the consensus opinion.

• If you want to find out how your organisation can join our list of supporters, please contact us at excel@icaew.com

• Read our related series of articles - Introduction to financial modelling