Budgets & Financial Model automation

Optimise through automation!

Automation is key! 🗝️

One of the hardest challenges a fast-paced scaling start-up faces is the need to have Finance and Operational processes that are fit for purpose and continue to work as the business grows. This is particularly vital to budgeting and building financial models.

The key to optimising these processes is automation! 🤖

Where an excel sheet might’ve worked when there were just 10 employees, it’s very quickly going to become inadequate. Planning and forecasting are essential parts of building a roadmap for any company. It means unnecessary risks can be avoided and you can stay on track during more volatile months, something start-ups and scale-ups know can happen at any moment. 😅

These are going to be 2 areas in particular that you don’t want to mess up. Just some of their uses include:

  • Providing a solid basis for a company's financial identity
  • Allowing for better-informed business decisions, both operational and financial
  • Being an important source of data used to represent a company's finances to prospective investors or lenders

So how can businesses optimise these processes? The key is automation.

Many companies are still opting for the old-school route of using Excel or Google Sheets. 🧓 We can understand why they are chosen initially as they are well-known, readily available and inexpensive. However, there have been huge advancements in financial model software solutions. Designed specifically for this purpose alone, the software is user-friendly, reduces the risk of user error and automates many processes. They can also provide tools and insights that your standard spreadsheet can’t.

Read our case study with a Partner to find out how we automated their financial model using a software solution: Causal.

The case study 🕵️

One of our Partners at Quantico, who specialises in construction equipment rental, was growing at a rapid pace and struggling with building out a financial model to keep up.

They were using an Excel-based model that was difficult to manage and did not accurately reflect their current financial situation. Not only was the data in their budget out of date but the format was different than that coming out of their accounting software. As a result, it was hard to track actual spending and revenue against projected figures.

Our team wanted to ensure that the solution would not just be a simple budgeting tool. It would also provide them with

  • real-time reporting capabilities 
  • the ability to track their progress against those budgets

What we did 🧠

With this goal in mind, we began by overhauling the financial model used for business planning and strategy. The best approach was to rebuild their financial model from scratch. We knew that we needed to have a lot of upfront conversations. We needed to really understand how the current model was operating and what kind of short-term changes were being made that would impact the customer pipeline, customer database and sales.

We decided to integrate Causal to help automate many of the budget processes. For this particular case, we selected the software for a number of reasons, the main ones being:

  • It integrated well with existing software being used (eg Xero) to easily pull up-to-date actuals
  • We could connect it to Excel to link it to the current financial model in place
  • It simplified how to think about forecasting and models - using inputs and outputs as a guide
  • It was easy to model multiple forecast scenarios without complex formulae

With it, we were able to identify the true drivers of their customer pipeline and make better decisions about where to allocate resources. The end result was a much more robust and accurate financial model that saved our Partner time by identifying areas for key improvements going forward.

The result 🌟

By using up-to-date metrics and focusing on the most relevant data in relation to their business goals, we were able to develop a more accurate model that would greatly improve their decision-making process. In the end, with a more efficient budget and financial model in place, our Partner is now better equipped than ever to drive growth and success in their business.

Building up a financial model can often feel like a painful and lengthy process. However, with the right tools and approach, it can actually be quite quick and efficient. For us, the main process involved in building up the financial model was building out the budget, which took about 10 days of work over the course of a few weeks. Once we had finalised the budget, we then integrated the model with Xero and set everything up as required. By streamlining the financial modelling process with the right tools and approach, we were able to save time and get things done more effectively.

How did it help? 🎁

When the company first launched, the founder and CTO lacked adequate information about the data flows within the business. This made it difficult for them to fully understand where they needed to improve and optimise processes.

Overall, greater information for the founder was the key outcome of this project, as it gave them a better understanding of how their business functions and what steps need to be taken moving forward. This newfound knowledge not only benefited the founder and CTO but also the entire team, ultimately leading to more streamlined operations across all areas of the business.

Want to improve your Financial Modelling?

We have a free course as part of our FinOps Academy literally called ‘How to build a financial model’. One of the best parts of the Academy is you get to learn by doing. You’ll get to work with our fictional company called Clarity Ltd, using the realistic data provided to create an actual financial model with Causal. With our course, you’ll be:

👷 Building a financial budget and plan to forecast expected costs as your company scales 

🎨 Creating different scenario plans 

⚖️ Learning how to model for investors 

Once you’ve signed up, you’ll get free unlimited access to the course so you can refer back to it whenever you need it. You’ll learn how using a FinOps approach and the right software can not only save you time but can help your business make better-informed decisions. 

Prefer to grasp the theory first? Read through the FinOps Fundamentals and then put your new-found skills into practice with RealWorld FinOps. Sign up free of charge today!

At Quantico, we are a team of skilled FinOps experts who are excited to work with start-ups and help them scale. Looking to grow your start-up but struggling with financial modelling and budgeting? 

Our comprehensive services cover everything from automation and forecasting to cost tracking, enabling you to focus on what really matters: driving innovation and growth in your business. If you are a rapidly expanding company trying to keep pace, our team at Quantico is here for you.

Contact us today and let's get started!