FINANCIAL MODELLING CODE - A set of principles for robust financial modelling - ICAEW thought leadership

Sep 12, 2026

Spreadsheet financial models shape decisions across businesses of all sizes, yet many users rely on self-taught methods that can embed poor habits and errors. This guidance establishes broadly accepted, principles-based tenets for robust financial modelling, explaining model scope and purpose, workbook layout and user transparency, and requirements for consistency, clarity, and error reduction. It also covers practical calculation techniques, including limits on complexity, traceable references, avoidance of hardcoding, circular links, and unnecessary rounding, while advising sparing use of VBA and macros.

LanguageEnglish

CategoryGeneral

FormatPDF

Pages22

Reading Time8 min

AccessFree to download

Contents

Foreword

Introduction

Model definition and purpose

Understand the scope of a financial model

Determine the goals of your model

Layout and structure

Plan and assess the workbook layout

Make navigation simple

Make inputs easy to find

User interface and transparency

Include user guidance

Avoid duplication

Identify and separate forecast or dummy data

Don’t hide things

Consistency

Use consistent formulas

Use consistent placement

Clarity

Use clear formatting

Use clear and meaningful labels

Use clear units

Use a clear sign convention

Use easily understandable worksheet names

Use clear range names where appropriate

Document VBA code clearly

Error reduction

Review and test your models

Include checks

Include a master check

Consider including restrictions

Calculation techniques

Minimise calculation complexity

Build traceable references

Avoid hardcoding

Avoid circular references

Avoid unnecessary rounding

Use VBA and macros sparingly

FINANCIAL MODELLING CODE A set of principles for robust financial modelling ICAEW THOUGHT LEADERSHIP CONTENTS FOREWORD 1 INTRODUCTION 2 MODEL DEFINITION AND PURPOSE 3 Understand the scope of a financial model 3 Determine the goals of your model 3 LAYOUT AND STRUCTURE 4 Plan and assess the workbook layout 4 Make navigation simple 5 Make inputs easy to find 5 USER INTERFACE AND TRANSPARENCY 6 Include user guidance 6 Avoid duplication 6 Identify and separate forecast or dummy data 7 Don’t hide things 7 CONSISTENCY 8 Use consistent formulas 8 Use consistent placement 9 CLARITY 10 Use clear formatting 10 Use clear and meaningful labels 11 Use clear units 11 Use a clear sign convention 12 Use easily understandable worksheet names 12 Use clear range names where appropriate 13 Document VBA code clearly 13 ERROR REDUCTION 14 Review and test your models 14 Include checks 14 Include a master check 15 Consider including restrictions 15 CALCULATION TECHNIQUES 16 Minimise calculation complexity 16 Build traceable references 16 Avoid hardcoding 17 Avoid circular references 18 Avoid unnecessary rounding 18 Use VBA and macros sparingly 19 ACKNOWLEDGEMENTS Stephen Aldridge – Numeritas Levi Bailey – White Box Financial Rob Bayliss – Grant Thornton Tom Brichieri-Colombi – Mazars David Colver – Operis Roland Brook – Smith & Williamson Alexander Carse – John Laing Mike Copeman – Wolters Kluwer Daniel Emkes – Harrow School Glen Feechan – [needaspreadsheet.com](needaspreadsheet.com)[ ](needaspreadsheet.com)Joanna Hayes – Amberside Advisors Simon Hurst – The Knowledge Base Michael Hutchens, Modano Alistair Hynd – RSMAdam Lacey – Filtered Simon Livings – KPMG Adrian Maconick – Finsbury Solutions Sanjay Magecha – Financial Visibility Patrick O’Beirne – Systems Modelling John Tennent – Corporate Edge Irfan Umarji – The Royal Society Paul Wakefield – Paul Wakefield John Yeldham, Mazars For a full list of supporting organisations, please visit our Financial modelling code webpage. © ICAEW 2024. All rights reserved. If you want to reproduce or redistribute any of the material in this publication, you should first get ICAEW’s permission in writing. ICAEW will not be liable for any reliance you place on the information in this publication. You should seek independent advice. Trademark acknowledgements: Excel is a registered trademark of Microsoft Inc. FOREWORD Financial modelling is carried out by many chartered accountantsand other professionals and drives decision-making throughout the business world. Models to analyse simple data, forecast outcomes, and inform complex strategic choices can be found in businesses of every size and industry. There are various courses, standards and guides available that explain how to build models, each with their ideas about what the appearance, layout and functionality of a model should be. While there is much consensus among these methodologies, for both procurers and practitioners there is no universally accepted set of agreed principles for how to carry out financial modelling. Most existing methodologies were developed with particular sectors or practices in mind; hence, they are frequently detail-oriented and not accepted very widely. To address this, ICAEW has created this Financial modelling code to provide essential guidance to standard-setters, procurers and modellers on good practice. The guidance is principles-based, high-level and broadly accepted to encourage flexibility while maintaining best practice. It was formed from a review of seven methodologies and input from over a dozen financial modelling organisations. I commend the work of our Excel Community’s advisory group in creating this guidance and recommend it to anyone involved in the production or use of financial models. Alan Vallance, Chief Executive of ICAEW INTRODUCTION Spreadsheet financial models are ubiquitous in the business worl

FAQs

What is the purpose of this Financial Modelling Code?

It provides essential, principles-based guidance to standard-setters, procurers, and modellers on good practice in financial modelling. The Code aims to support robust, understandable models and reduce the likelihood of errors.

How should a financial model’s scope and goals be defined?

The guidance includes defining the scope of the financial model and determining the goals it is meant to achieve. This helps align the model’s design with its intended decision use.

Which practices does the Code recommend to reduce errors in spreadsheet models?

It recommends reviewing and testing models, including checks and a master check, and considering restrictions. It also advises improving clarity, consistency, and transparency to make errors easier to detect.

Sep 12, 2026

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