Our business modelling expertise helps companies make decisions with confidence. We bring our technical skills – in spreadsheets, databases and programming – and our business skills – in audit and accountancy – together to build sophisticated models that answer ‘what if?’ questions for management.
We are adept at gathering the right information – from interviews, process reviews, existing data sources – and building robust spreadsheet-based models that allow management to see the impact on cashflow or the P&L of different scenarios. For example, our clients may be concerned about the profitability of particular contracts – the headline revenue might be high, but does it make money? Or, they may be under pressure from a regulator or a lender to prove they have sufficient cash to meet their obligations in an unexpected event.
Whilst sophisticated and built to good modelling practice standards – eg, ICAEW: 20 principles for good spreadsheet practice – our models deliberately focus on the outputs required by management and other stakeholders, the inputs that management must provide and the key assumptions that must be made. This ensures our models meet the particular and complex needs of stakeholders, whilst providing a clear and transparent path from input to output.
Development of customer invoicing/billing solution, energy sector organisation
Our client was implementing a new financial recording and reporting system. However, the invoicing needs of its major customers were highly complex and it was not feasible to develop a single invoicing process that would deal with all customers. We worked closely with our client’s sales support and project teams to understand the needs of their key customers and develop an Excel based solution that enabled them more accurately and quickly to generate client invoices and supporting documentation.
- Are you concerned that some divisions or contracts may not be as profitable as you’d like?
- Do you need to prove to regulators that your business can cope in an unexpected event?
- Are you considering a deal and don’t know whether it will make money?
User developed spreadsheets and databases – often produced as workarounds – can quickly become embedded in business processes and crucial to the successful operation of an organisation. Yet these business-critical applications are not owned by IT; they sit outside the control environment and are usually unsecure, untested, undocumented and not auditable.
Tales of relying on poor spreadsheets are legendary; Kodak, for example, re-stated their 2005 results by $9m after ‘too many zeroes were added to an employee’s accrued severance’ when calculated on a spreadsheet. More recent examples implicating poor spreadsheet practices include JP Morgan & the “London Whale” and the failed West Coast Main Line franchise bid.
Spreadsheets are likely to become ever more crucial in the current climate – eg being the platform for cash flow forecasts, loan covenant calculations etc – but they can easily be manipulated to hide the truth.
Our consultants have significant experience in reviewing and auditing – as well as building – business-critical spreadsheets.
We can give you confidence that your spreadsheets, databases and models operate as expected by:
- Cataloguing, mapping and risk-rating all spreadsheets – to confirm the extent and criticality of spreadsheets in the business;
- Bringing spreadsheets into the control environment;
- Reviewing the design of models against good practice (including ICAEW: 20 principles for good spreadsheet practice);
- Comparing the operation of models against business rules;
- Identifying potential errors – such as hidden fields, white text and inconsistent formulae;
- Documenting spreadsheets and the associated business rules; and
- Independently re-perform the spreadsheets’ operation.
Assurance over calculations relating to a FTSE 100 organisation’s pension scheme
After the external auditor highlighted some possible risk around pension specific calculations DataConsulting were engaged to build a robust audit model to help provide assurance over the calculations. The model was developed using Excel and incorporated an easy to use interface and the generation of three key exception reports. Additionally the model undertook some basic data quality checks on the data to highlight issues such as duplicates and missing information. The organisation was pleased with the model and no material issues were detected.
- Have informal spreadsheets and databases become critical to the operation of your organisation?
- Are spreadsheet-based calculations being relied upon by external parties – such as banks, auditors and regulators?
- Have your internal or external auditors raised concerns over end user computing?
We make use of the extensive capabilities of readily available software, such as Microsoft Excel, Microsoft Access, Microsoft SQL Server – as well as web-based technologies such as ASP.NET – to deliver rapid and significant improvements to business processes.
Tactical data solutions come into play when your existing software doesn’t provide you with the functionality you need, or your business processes have become fragmented, inefficient and time-consuming.
Development of SAP segregation of duties ACL application, FTSE 100 company
The client had no reporting in place to give visibility of their staff members’ responsibilities when accessing the main SAP ERP system. DataConsulting were able to identify the key data extracts required from the SAP system and developed reporting which highlighted clear breaches of good segregation of duty practice. These included the ability to create vendors as well as raise purchase orders, receipt goods or services and approve payment of invoices.By giving the client a thorough understanding of their current issues, DataConsulting’s reports helped feed into the client’s longer term approach to ensuring adherence to segregation of duty policies.
Re-creation of payroll forms, local government organisation
Our client needed to re-create samples of monthly and annual payroll forms to support its audit testing, but could not accomplish this using its existing legacy systems. We created a flexible solution whereby relevant data was extracted directly from their legacy systems using ACL. The data was then passed to Excel where it was manipulated, formatted and presented so that pdf versions of the relevant payroll forms could be generated automatically on demand.
- Are business processes taking longer and longer to complete?
- Do business processes require significant copying-and-pasting between spreadsheets?
- Is management information not meeting your needs, in terms of content and time to complete?
- Are issues raised by auditors over spreadsheets or databases embedded in a process
While the majority of analytics are most effectively carried out using software designed for the purpose, there are times when the right tool to use is just at your fingertips – Excel.
Excel has emerged from being a ‘half-baked’ option that can only cope with 65,536 rows and 256 columns. The worksheet can now [in theory] extend to 1,048,576 rows and 16,384 columns (not that you’d ever want to fill them all).
True, there is no audit trail, source data may not always be ‘read-only’ and users can (and probably will) find ways to break any but the most carefully constructed spreadsheet.But there are ways to mitigate some of these issues. And there have been some significant changes which have made Excel a much more serious contender. Consider recent functionality enhancements: Tables and PivotTables; PowerPivot and PowerQuery. Excel is not a threat to ACL, but its capabilities should not be ignored.
Development of continuous monitoring duplicate payments detection system, FTSE 250 company
The client, operating a Shared Service Centre to process over £1.5bn invoices per year, suspected that invoices were being paid twice, or in excess of that. Requirement was to develop a duplicate payments application for inclusion in the business as usual payments process. DataConsulting implemented a solution which became an effective monitoring control in the client’s payment process. It now prevents numerous duplicate payments from occurring and was commended by the client’s external auditors
- Do you need to use Excel to perform data analysis?
- Do you need to compare results from another data analytics tool (say ACL) for audit independence?
- Don’t have a lot of data but need to perform data analysis?
For further information about our training and consultancy options, please visit our contact us page.