Modeling is a time-intensive process. Creating financial models can take days, weeks, or even months to complete. Without the right tools and techniques, modeling can also be extremely challenging. Financial modeling is an important part of any company’s financial management processes.

It helps businesses analyze different variables to make more informed decisions about their future investments and operations. However, financial modeling is a time-consuming process that requires substantial effort and concentration from the modeler. But how can we make the whole process easier?

What if there were some automated tools that could streamline this process? Well, there are! Today we will discuss 6 ways to maximize your use of automation and excel in financial modeling with the help of various different tools and tricks.

 

Create a basic Data Model First

To get started with your model, you will first need to understand what kind of data you will be working with and what variables need to be included in your model. When you are just starting out, you don’t need to include every little detail. Instead, you should create a basic data model that includes the most important variables for your model. This will help you focus on the important areas of your model and prevent you from getting lost in the details before you need to.

 Later on, you can use these variables as a basis for creating entirely new data models. This will make it easier for you to create new models as you will not have to start from scratch each time.

 

Calculate the most important variables before modeling

Once you’ve created a basic data model, you need to go through each variable and calculate the most important figures to include in your model. This will save you a lot of time later on and make it much easier for you to build your model.

For example, if you want to create a financial model to analyze a company’s cash flow, you will need to calculate things like the projected revenue and expenses, the number of employees, and more. There are plenty of different variables you might need to include in your model. Some of them might include revenue, cash flow, expenses, and more.

To calculate these figures, you can use various online tools for financial models like CFO® Excel Financial Modeling Software or Zoho Finance. These tools have various built-in functions and formulas that will make calculating the most important variables for your model much easier.

 

Use macros to automate tedious tasks

Macros are a great way to automate tedious tasks and streamline your overall workflow. You can use macros to automatically create certain calculations and to repeat them as many times as necessary. This type of automation is a great way to save time and effort, especially if you are working with long models.

For example, if you are creating a cash flow model, you might need to create a separate cash flow forecast for each year in your model. This can be a tedious task that takes a lot of time and effort. Instead of doing this manually, you can use macros to automatically create these forecast figures and save yourself a lot of time and effort.

 

Use programming languages to automate even more

If macros don’t provide you with enough functionality and automation, you can also use programming languages to automate more of your model’s processes. This type of automation is particularly useful for larger models that require several calculations and inputs from various different areas.

 Programming languages like Python, R, Java, and SQL are great for automating large models and saving a lot of time and effort in the process. They even have the ability to access and analyze data from various different sources and databases, which can make your model even more effective.

If you have some programming experience, you can use one of these languages to automate even more of your model’s functionality and processes. This can help you reduce the time and effort required for your model and make it easier to complete.

 

Automate everything with APIs

APIs can automate pretty much every single part of your model. They can integrate with different data sources and even perform certain calculations on their own. With the help of APIs, you can create fully automated models that require no user input whatsoever.

 If you are creating a model that relies on data from other sources, APIs can be a great solution. You can use APIs to automatically extract data from various different sources and then integrate it with your model. This will make your model more effective and efficient and allow it to rely on up-to-date, real-time data.

 

Automated Excel functions and macros

Excel functions are a great way to streamline your model even more. By adding new functions to your model, you can include new features and make your model more robust. You can also create macros that can make your workflow even faster and more efficient. For example, you can create a new function that will automatically calculate your company’s debt-to-equity ratio.

You can also create macros that will allow you to copy and paste large amounts of data much more quickly and easily. With these functions and macros, you can improve the functionality of your model and make it easier to complete. This can help you save time and effort and make financial modeling a lot less stressful and challenging.

 

Define the scope and objectives of your model early on

Before you begin building your model, you need to understand what its purpose and objective is. This way, you will be able to focus on the most important aspects of your model and won’t have to waste time working on things that are not relevant to your model. Furthermore, you will be able to choose the right tools and techniques for your model and know how to best utilize the benefits of each one.

By understanding the scope and objectives of your model, you can also better organize your model and make it easier to navigate and understand. This will make your model easier to complete and will allow you to spend less time fussing with it.

 

Utilize Excel functions to streamline your workflow

If you want to improve the overall functionality of your model and make it easier to complete, you can add new Excel functions that will make your model more robust. You can add new functions to your model in order to make it more robust and to save yourself time and effort in the process.

For example, you can add a function that will automatically calculate your company’s debt-to-equity ratio. You can also add functions that will make it easier for you to copy and paste large amounts of data. By adding new Excel functions to your model, you can improve the functionality of your model and make it easier to complete. This can help you save time and effort and make financial modeling much less stressful.

 

Summing up

Financial modeling is an important part of any company’s financial management processes. It helps businesses analyze different variables to make more informed decisions about their future investments and operations. However, financial modeling is a time-consuming process that requires substantial effort and concentration from the modeler.

But how can we make the whole process easier? What if there were some automated tools that could streamline this process? Well, there are! Today we will discuss 6 ways to maximize your use of automation and excel in financial modeling with the help of various different tools and tricks.