As accounting professionals adapt to rapid changes brought on by AI and automation, strong financial modelling skills are more relevant than ever.
Take Judith Singh FCCA. She was working in property development in the UK, building operational models to meet budgeting and forecasting needs when she decided to take a deep dive into the discipline of financial modelling.
‘I wanted to raise my ability to solve diverse business challenges’
She says: ‘Being able to build, understand and analyse financial models is vital for finance professionals making critical decisions. I chose to develop my financial modelling skills for a number of reasons. I wanted to improve my model-building proficiency under time pressure. I wanted to raise my ability to solve problems when faced with diverse business challenges. I also wanted to explore more contemporary Excel techniques.
‘This was especially valuable to me, as I am open to working in new sectors and in other financial modelling and accounting roles in the future.’
Rigour and insight
Accounting professionals today are increasingly expected to go beyond reporting historical results. They need to provide insights that drive strategic decisions, manage risk and generate meaningful value for their clients or across the business. Developing deep financial modelling skills can help. It enables professionals to translate complex data and assumptions into structured tools that support forecasting, valuation, scenario planning and decision-making.
Financial modelling sits at the intersection of technical expertise and business strategy. It requires multidisciplinary skills including analytical rigour and insightful interpretation, which makes it as much an art as a science.
‘If your work involves looking forward, it involves modelling’
Dave Hallwood FCCA, CFO of Trinity1 Capital in the UK and a qualified financial modeller, says the great skill of modelling is being able to analyse how the business model works and what the business needs.
‘No matter what area of accountancy you work in, if it involves looking forward, it involves modelling,’ he says. ‘Be it a startup, scaleup, merger, acquisition, exit or steady state in a small, one-person entity or a truly global firm, you can add value to the business. You’ll know the right questions to ask to enable you to build an easy-to-use model that will help make a decision or game plan possible.’
Beyond the basics
In financial modelling, the integrated ‘three-statement model’ is the foundational tool. Building a three-statement financial model from scratch will help the finance professional develop the more sophisticated kinds of financial model often seen in corporate finance deals, including mergers, leveraged buyouts and valuations.
More intensive modelling assignments require a high level of problem solving, systematic thinking and abstraction. You need to apply your existing modelling knowledge in novel ways to solve complex challenges.
Building and interpreting very technical models adds significant value
Individuals who can build and interpret very technical models add significant organisational value. They can guide the decision-making process, which is vital for propelling themselves into roles of strategic influence and leadership. They will be able to navigate complex scenarios and sensitivities, including multijurisdictional tax issues, sophisticated capital structures, strategic timing decisions and operational budgeting complexities.
As Hallwood says: ‘I doubt there’s a single business out there that wouldn’t value someone who can do that for them.’
More information
ACCA is working in partnership with Financial Modeling Institute (FMI) to offer members the opportunity to gain the Advanced Financial Modeler (AFM) and Chartered Financial Modeler (CFM) accreditations. AFM is a level 1 certification that enables learners to quickly and efficiently build a three-statement financial model from scratch, while FMI describes the level 2 CFM as the only accreditation based on real-world financial modelling challenges.
