It's hard to argue with the notion that financial modeling software can feel overwhelming for many accountants.
Yet with the right tools, accountants can transform financial planning and analysis into a seamless, intuitive process.
In this comprehensive review, we will demystify the top financial modeling platforms for accountants. You'll discover user-friendly solutions that integrate essential modeling capabilities, scalability, and robust security to streamline accounting workflows.
Introduction
Financial modeling is an essential skill for accountants, providing the ability to analyze financial data, forecast future performance, and inform business decisions. As the responsibilities and opportunities within the accounting profession continue to evolve, leveraging the right technology is key to unlocking enhanced efficiency, deeper insights, and better outcomes.
This article explores the capabilities of leading financial modeling platforms to assess how they equip accounting professionals with sophisticated yet intuitive tools to elevate their financial analysis and modeling proficiency. We examine the specialized features offered within each solution to align with the distinct needs and applications for different accounting roles and settings.
By evaluating the standout options available today through an accountant's lens, we aim to uncover the best financial modeling software for supporting and advancing the work of accounting professionals. Equipped with these insights, accountants can determine the ideal technology partners for enabling more strategic financial management within their organizations.
Do accountants do financial modeling?
Accountants can build sophisticated financial models as part of various business functions. While investment bankers and equity analysts are primarily associated with financial modeling, accountants develop models for:
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Due diligence - When evaluating a potential merger or acquisition, accountants will model the target's financials to analyze performance trends, growth opportunities, risks, and valuation.
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Transaction advisory - During deals like debt refinancing or capital raises, accountants support building integrated financial models to assess options and negotiate terms.
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Valuations - Accountants frequently build discounted cash flow (DCF) models and other valuation models to establish or critique a business's equity value for transactions, litigation, financial reporting, and other needs.
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Tax planning - Accountants may create projections focused on the tax impact of different corporate actions like R&D spending, executive compensation, or multi-national structures.
So while bankers grab the headlines for big deals and overnight financial models, accountants apply equally rigorous modeling across a range of accounting, audit, tax, and advisory contexts. Core modeling skills in Excel combined with deep accounting expertise empowers accountants to provide unique counseling to enterprises.
Which is better CFA or financial modelling?
Both obtaining the Chartered Financial Analyst (CFA) designation and mastering financial modeling skills can lead to rewarding finance careers. While the paths are different, they actually complement each other well.
A CFA provides expertise in financial analysis, valuation, portfolio management, and investment decision making. The program covers a broad range of financial concepts and principles. Earning a CFA demonstrates deep technical knowledge and analytical prowess.
Financial modeling involves building spreadsheet models to analyze financial performance, forecast scenarios, and make data-driven business decisions. Expertise in financial modeling shows hands-on financial skills and attention to detail. Models help quantify business situations to drive insights.
Together, CFA and financial modeling offer hard and soft skills that open up positions like:
- Investment banking analyst/associate
- Private equity analyst
- Equity research analyst
- Portfolio manager
- Quantitative analyst
- Corporate financial analyst
The CFA provides the theoretical foundation and industry knowledge, while financial modeling translates that knowledge into practical, applicable models.
Pursuing both a CFA and financial modeling skills results in a powerful combination. The CFA covers the conceptual, while models showcase the practical. Having expertise in both areas signals advanced financial competencies on paper and in practice.
Overall, both paths potentially lead to finance leadership roles. Together they unlock maximum career opportunities at the intersection of financial theory and modeling. The choice depends on one's interests and professional goals.
What is the best source to learn financial modeling?
For those looking to advance their financial modeling skills, Udemy offers some of the most comprehensive and beginner-friendly courses available. A few highly-rated options include:
UDEMY BEGINNER TO PRO IN EXCEL
This course provides a complete A-Z guide to building financial models in Excel from scratch. It covers core concepts like linking worksheets, using formulas and functions, building 3-statement models, discounted cash flow (DCF) analysis, sensitivity analysis, scenario modeling, and more. With over 12 hours of video content, it's one of the most extensive training programs for financial modeling using real-world case studies and examples.
The instructor, Chris Dacus, is a financial analyst with years of modeling experience. Students praise the course for taking them from basic to advanced Excel techniques step-by-step. It's best suited for those newer to financial modeling looking to develop fundamental and practical skills.
Financial Budgeting and Forecasting in Excel Complete Course
For those interested specifically in budgeting and forecasting models, this course by Mihir Shah focuses on budget variance analysis, revenue/expense forecasting, cash flow projections, and more core concepts. The content balances both theoretical and practical learning using case studies of varying complexity.
With concise 2-3 hour long modules, it's easier to digest for professionals looking to expand their budgeting and forecasting knowledge without an overly heavy time commitment. The course has a strong 5-star rating among students as an intuitive budget modeling resource.
Beginner to Pro in Excel: Financial Modeling and Valuation
Taught by finance professor Aswath Damodaran, this course quickly advances from basic to intermediate and advanced financial modeling techniques. Key topics include comparable company analyses, precedent transaction analyses, DCF models, LBO models, M&A models, and more.
Professor Damodaran is an award-winning instructor and expert in valuation and corporate finance. His course materials and teaching style have made him hugely popular on Udemy. For those with some financial modeling experience looking to take their skills to an expert level, this course is a top choice.
The courses highlight key concepts in an easy-to-digest way while providing the depth needed for real financial analysis. For any experience level, Udemy has a financial modeling course to upgrade Excel and finance skills. The platform makes training affordable, convenient, and impactful.
What is the best practice for financial modeling?
When building financial models, following best practices is crucial for creating accurate, flexible, and easy-to-understand models. Here are some of the most important best practices to keep in mind:
Use one row for each formula
Breaking down formulas over multiple rows makes models confusing and prone to errors. Keep each formula self-contained in a single row.
Avoid hard-coding numbers into formulas
Instead of using fixed numbers like "10%" or "$100" within formulas, reference cells that contain these values. This makes models easier to update.
Prioritize simplicity
Complexity invites mistakes. Opt for basic Excel tools over convoluted formulas whenever possible.
Maintain a consistent sign convention
Clearly establish if positive or negative numbers indicate cash inflows/outflows. Then adhere to this convention throughout the model.
Leverage Excel's grid system
Refer to cells based on their column and row number rather than naming each cell. This reduces chances of referencing errors.
Centralize all inputs
House all assumptions and drivers in designated input sections rather than scattering them throughout. Limit assumptions to one location.
By following standards like these, financial analysts can build models that provide trustworthy projections, flexible scenario analysis, and streamlined updates over time. Taking a disciplined approach from the start saves countless headaches down the road.
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Demystifying Financial Modeling Software for Accountants
Financial modeling software plays a critical role for accountants by enabling efficient financial analyses and accurate forecasts. As the responsibilities of accounting professionals expand, adopting dedicated tools for financial modeling is key to success.
What is Financial Modeling Software?
Financial modeling software provides a platform to develop financial models that simulate future performance. Key features include:
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Easy to use templates and frameworks to build models for financial statements, valuations, budgets, etc.
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Sophisticated functions to automate manual processes. For example, automatically flowing assumptions through integrated statements.
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Advanced analytics capabilities using AI and machine learning algorithms to uncover insights.
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Data visualization tools to present models clearly. For example, graphs to depict revenue projections.
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Collaboration features for accountants to work across teams and with clients directly in the modeling environment.
By utilizing these software capabilities, accountants can gain efficiencies, ensure greater accuracy, and spend more time on strategic initiatives.
Essential Financial Modeling Techniques for Accountants
Financial modeling software equips accountants with a versatile set of techniques:
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Sensitivity analysis - Assess impact on outputs by adjusting inputs and assumptions. Determine which variables significantly influence financial success.
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Scenario analysis - Model various hypothetical scenarios, like best/worst case projections. Prepare strategic plans to navigate diverse conditions.
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Waterfall charts - Visually demonstrate how an initial revenue cascades through various expenses layer-by-layer. Identify profitability drivers.
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Consolidation - Combine financial data across departments, entities, or holdings into an overall picture. Ensure consistency.
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Variance analysis - Compare projections to actuals, quantify deviations, and reveal root cause issues. Tweak assumptions accordingly.
By mastering these techniques, accountants can provide vital intelligence to guide financial decision making.
Advantages of Adopting a Financial Modeling App
Specialized financial modeling apps have distinct advantages over generic spreadsheet software:
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Structured templates that dynamically link cells and flows calculations, minimizing errors.
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Real-time collaboration for accountants to work directly with team members and clients on the same living model.
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Version control to track all changes made to models, enabling easy rollbacks.
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Advanced analytics powered by AI to discover deep insights from data that humans could miss.
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Automated reporting to build standardized templates once and reuse for faster, consistent reporting.
By transitioning to a dedicated app designed for financial modeling, accounting teams can work smarter - not harder - while delivering greater value. The software pays dividends over time.
In-Depth Review: The Top Financial Modeling Platforms
Financial modeling is an essential process that underpins effective business planning, budgeting, forecasting, and decision making. As the backbone of financial analysis, a robust modeling platform can empower accountants to translate raw data into actionable insights.
In this comparative review, we analyze five leading options for financial modeling software:
Microsoft Excel: The Ubiquitous Financial Modeling Foundation
As a versatile, user-friendly spreadsheet program, Excel forms the basic building block of financial modeling for many accountants. With its simple grid-based interface and wide range of mathematical, statistical, and financial functions, Excel provides fundamental modeling capabilities that support:
- Quick and flexible creation of financial statements models like income statements, balance sheets, and cash flow statements
- Basic operational models to analyze trends and variances
- Summary dashboards using pivot tables and charts
For example, accountants can use Excel to build discounted cash flow models to evaluate potential investments or mergers and acquisitions. Excel's strength lies in its widespread adoption and ease of basic modeling - making it an accessible starting point for financial analysis.
However, Excel lacks true multidimensional modeling and advanced collaborative features offered in more robust platforms. It can quickly become unwieldy with larger, more complex models.
Quantrix: Revolutionizing Financial Modeling with Multidimensional Capabilities
Unlike Excel's two-dimensional grid, Quantrix introduces multidimensional modeling techniques that mirror real-world financial complexity. Using its cube-based interface, models can capture countless scenarios spanning any number of dimensions - from regional, product, channel and time-based reporting.
Quantrix revolutionizes modeling flexibility. Accountants can instantly adjust assumptions and gain insights into risk, opportunity and impacts across the business. For example, supply chain models can simulate product delivery delays, production bottlenecks and material price changes.
With AI-assisted modeling, scenario comparison, interactive visualizations and seamless Excel compatibility, Quantrix accelerates sophisticated analysis - making it invaluable for financial planning and consolidation.
Anaplan: The Collaborative Approach to Financial Modeling
Anaplan focuses on cloud-based collaborative planning and modeling. Using its user-friendly web interface, teams across finance, sales, operations and HR can collectively build unified, scalable models tailored to business needs.
Unlike siloed department-level tools and spreadsheets, Anaplan breaks down data silos - providing a “single source of truth” for the enterprise. Real-time synchronization ensures plans and forecasts stay continually up-to-date across regions, business units and users.
For example, sales budgets cascading from global targets down to regions can rapidly incorporate latest pipeline data. Teams get full visibility into impacts of changes before finalization. This collaborative agility, with built-in workflows and role-based access, is invaluable in fast-paced markets.
Though powerful, Anaplan requires IT support for large-scale deployments - making it best suited to mature mid-market firms.
Adaptive Insights: Intuitive Financial Planning and Analysis
As a cloud-based corporate performance management platform, Adaptive Insights unifies financial planning, modeling, reporting and analytics - providing the simplicity and power crucial for complex regulatory standards like ASC 606/IFRS 15.
With its user-friendly interface tailored for finance users, Adaptive Insights allows self-service modeling and rapid creation of individualized dashboards highlighting key measures like DSO, Gross Margin or Days Payables. Ready-to-use templates streamline specific financial models around P&L, balance sheet, payroll and headcount planning.
Seamlessly integrating across existing IT ecosystems via pre-built connectors and an open API, Adaptive Insights modelling can auto-populate from source systems like NetSuite and Salesforce. Custom models and rules configuration provide flexibility while hiding complexity from end-users through simple spreadsheet-like views.
While feature-rich for most mid-market needs, Adaptive Insights trails heavier solutions like Oracle Hyperion in extremely large, global enterprises requiring significant customization.
Oracle Hyperion: A Robust Solution for Enterprise Financial Modeling
Oracle Hyperion brings enterprise-grade capabilities for global 2000 corporations dealing with extreme scale, complexity and performance needs in financial modeling and planning:
- Multi-dimensional modeling across countless hierarchies, dimensions, currencies, intercompany transfers and data sources
- Global consolidation supporting over 10,000 legal entities and sub-consolidations
- Tax reporting compliance across 130+ countries
- Integration adapters for major ERPs like SAP, Oracle, Infor and custom applications
- Financial close automation reducing month-end from weeks to days
- Built to deliver blazing calculation speeds supporting tens of thousands of users
With Hyperion, accountants gain tremendous modeling power and breadth tailorable to any business requirement - from driver-based planning to rolling forecasts to complex allocations. Collaboration features like commentary, workflows and task lists further transform planning cycles.
While extremely robust, Oracle Hyperion requires significant configuration and administration. With its premium pricing and IT dependencies, it remains the choice for complex global enterprises.
The best financial modeling platform depends on an organization's unique aspirations, challenges and stage of financial management maturity. As decision makers, accountants are central to matching available tools against evolving needs - enabling fact-based business planning powered by data-driven models and insights.
Key Evaluation Criteria for Selecting Superior Financial Modeling Software
Identifying the ideal financial modeling software for your business is critical to boost operational efficiency and insight. When assessing your options, several key criteria should guide your decision-making:
User-Friendliness and Learning Curve
The usability and intuitiveness of a financial modeling platform is pivotal. Models that are challenging for employees to learn reduce productivity and adoption. Prioritize solutions with:
- Intuitive dashboards, menus, and navigation
- Step-by-step tutorials and onboarding resources
- Responsive and knowledgeable customer support
Platforms like Quantrix earn high marks in user experience through features like interactive sheets, simple formula builders, and a shallow learning curve. Focusing on shortcuts and ease-of-use will maximize finance team output.
Comprehensiveness of Modeling Capabilities
Look for feature-rich software that empowers sophisticated modeling tailored to your use cases. Key indicators of depth include:
- Customizable financial statements and reports
- Scenario analysis with adjustable inputs and assumptions
- Forecasting tools for projections and simulations
- Drill-downs for understanding model drivers
For example, Cube Financial Modeling combines power and flexibility through modular statement building, variable sensitivity analysis using AI, and projection forecasting. Prioritizing robust functionality expands your analytical opportunities.
Scalability for Growing Business Needs
As your company evolves, your modeling software must keep pace. Seek platforms that scale, adapting as finance teams, data, and modeling complexity grows. Signs of scalability include:
- Unlimited model sizes without performance losses
- Easy integration of new data sources and systems
- Modular components to repurpose across models
- Automation features to save time as needs increase
Established tools like Quantrix handle scaling complexity smoothly, offering enterprise-grade features for large models, data connections, and automated dashboards. Future-proofing your modeling system is crucial as needs mature.
Seamless Integration and System Compatibility
Your financial modeling setup must integrate cleanly with other platforms for efficient system interoperability. Target solutions with:
- Native connections to data sources like SQL, Oracle, and enterprise software
- Open API for custom connections and embedded models
- Excel compatibility for access to legacy models and templates
With turnkey connectors across data sources and bidirectional Excel compatibility, Quantrix enables a unified modeling environment for cross-functional collaboration. Streamlined integrations between systems enhances productivity.
Security and Compliance Features
Protecting sensitive financial data should be non-negotiable. Only use enterprise-grade software with robust security mechanisms such as:
- Authentication protocols like single sign-on
- Granular user permissions and access controls
- Audit logging for monitoring system access
- Data encryption both in transit and at rest
- SOC 2 compliance certification
Quantrix checks every box, including 256-bit encryption, role-based access controls, and SOC 2 Type 2 attestation. Safeguarding your models and insights should be table stakes when choosing any financial solution.
By evaluating modeling software across these five categories, you gain assurance that your selected platform can deliver on key business needs around usability, analysis, scalability, connectivity, and security. Purpose-built tools like Quantrix provide the specialized financial modeling capabilities accountants require.
Choosing the Best Software for Your Needs
With so many options for financial modeling software on the market, it's important to focus on your organization's specific needs and size to determine the right platform.
Best for Small Businesses: Financial Modeling Simplified
For lean teams and small businesses, Excel add-ins like Quantrix offer an affordable but powerful way to build financial models without the need for extensive technical skills. These tools integrate directly into Excel to supercharge its native modeling capabilities. Key benefits include:
- Lower Cost: As Excel add-ins, these tools carry a much lower price tag than standalone modeling platforms. Quantrix licensing starts under $1,000.
- Short Learning Curve: The Excel interface and workflows will feel familiar. Focus efforts on mastering modeling best practices.
- Template Libraries: Access many pre-built model templates to accelerate the development process.
With strong modeling fundamentals, small teams can reap tremendous value from these simplified tools.
Optimal Choices for Midsized Companies
For larger organizations with more complex needs, robust platforms like Anaplan and Adaptive Insights provide flexible and scalable modeling capabilities. They facilitate collaboration across finance teams with features like:
- Cloud-Based Access: Build models in the cloud for access from anywhere. This also simplifies version control and permissions.
- Customization: Tailor models to capture all relevant operating drivers and metrics for your industry and business units.
- Audit Tracking: Understand all changes made over time with detailed activity logs.
Their advanced functionality can support highly customized models as operational needs evolve. And while more costly than Excel add-ins, they provide stronger governance for regulated industries.
Tailored Solutions for Large Enterprises
At the enterprise level, solutions like Oracle Hyperion enable deep custom modeling ecosystems fine-tuned to complex global business operations. Capabilities like:
- Consolidation Engine: Seamlessly integrate data across all departments, entities, currencies, reporting standards, and data structures.
- Unified BI Platform: Connect strategic planning, financial close, regulatory reporting, and more within a single, governed solution.
- Predictive Modeling: Leverage emerging techniques like AI/ML to build predictive financial and operation models leveraging Big Data.
These tools require significant investment and technical mastery but can streamline financial operations for global enterprises with multifaceted needs.
The optimal financial modeling solution depends largely on your organization's unique footprint and objectives. As needs scale in complexity, Excel add-ins, cloud platforms, and enterprise tools each cater to specific requirements. Focusing on current gaps and future ambitions will clarify the best direction to provide the right level of sophistication.
Final Analysis: Streamlining Accounting with the Right Tools
Choosing the right financial modeling software is crucial for accountants looking to maximize efficiency. The key is finding a solution tailored to your business's specific needs and use cases.
As the reviews have shown, Excel remains the most versatile option for basic financial modeling. However, for more complex analysis like Monte Carlo simulations or real-time collaboration, specialized software like Quantrix or Cube can provide significant advantages. AI-powered tools like PlanGuru also show promise in automating routine financial planning tasks.
Ultimately, there is no one-size-fits-all solution. The best approach is to carefully evaluate your unique requirements in terms of:
- The type of financial models and analysis needed (forecasting, budgeting, valuations etc.)
- The desired level of automation, customization and collaboration
- The volume of data and complexity of calculations involved
- Software and hardware compatibility with existing systems
- Cost, support availability and ease-of-use
Armed with this self-assessment, you can determine if an Excel add-on, niche financial modeling platform or intelligent software assistant is the right fit.
While the upfront investment in a specialized tool may seem unnecessary, the long-term productivity and efficiency gains for your accounting team are well worth it. Streamlining financial modeling allows you to focus on higher-value advisory services that drive business growth.
