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AFP 2020 Blog
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The Need for Dynamic Financial Modeling

Jul 7, 2020

By Carl Seidman, Principal, Seidman Financial

In a new world full of constant flux, one truth is for certain—businesses are under increasing pressure to perpetually change. Those that fail to plan and stay agile will be the most vulnerable, while those that imagine their future, within the unknown, will be the best positioned for success.

When enterprises are actively able to contemplate possibilities before they occur and adjust to them accordingly, they operate from a place of foresight and not from one of reactivity.

FORECASTING IN REAL TIME

The recent shocks to our domestic and global economies, due to COVID-19, require reforecasting using flexible tools and methods. Further, this crisis has made it crucial to get the most important information into the hands of the right people. This means updating forecasts in real-time, with minimal manual intervention, and based upon actionable data and insights. Assumptions should be challenged and outputs should be immediate. All approaches must lead to more confident decision-making, while reducing risk for all those involved.

We know that reforecasting at quarterly, or even monthly, intervals means the company isn’t contemplating weeks of developments and new information. Dynamic financial modeling allows organizations to craft forecasts and plans with a range of possibilities and flex them according to their expectations about the future. This can and should be done all at a moment’s notice.

Dynamic planning models can update and expand with minimal work and zero formula errors, to reflect new data and insights that weren’t previously accessible. Using even the most fundamental spreadsheet modeling techniques, inexperienced and advanced treasury and finance professionals alike can effectively illustrate the future for their teams.

UNFORESEEN TECHNIQUES

Our AFP 2020 session on dynamic financial modeling be a burst of mesmerizing techniques, many of which are unimaginable by those who are used to forecasting manually. The skills learned will help make forecasting efforts quick, easy, accurate, and engaging, especially if you rely heavily on Excel. Implementation of dynamic planning can easily convince leadership of the possibilities, allowing for more time to be spent insights and decision-making, and less time being spent on the mechanics.

Don’t miss Advanced Dynamic Financial Modeling, which is part of the FP&A Track at AFP 2020. Register for AFP 2020  here.