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Built in financial functions - are available in spreadsheets as well as AFMS. However they may not be available in
database oriented financial packages, or G/L report writers. Look for the ones you are most likely to use for your
planning models and reporting systems:
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NPV |
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IRR |
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Loan |
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Depreciation (straight line, declining balance, unit of production) |
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Tax table lookup |
Depending on your specific industry and modeling needs, you might need specialized
date manipulation functions to calculate elapsed time between dates in order to compute interest costs.
Also, what about Income Statements vs. Balance Sheets? Why is it sometimes difficult to work with a mixture of
Income Statement line items and Balance Sheet line items in the same model? Converting from year to date numbers
to monthly numbers involves a different calculation for the Income Statement. A good AFMS package is aware of the
difference, and gives you a way to distinguish between the two. Then time period arithmetic can be written generally
- e.g. apply this summation logic to income statement lines only.
Also, what about Better / Worse variance reporting? It is common in financial reporting to show variances to plan,
or variances to last year. The new CFO, Jack, likes to see "Better" variances shown as positive numbers,
and the "Worse" variances as negative numbers. The only way to do this and have a prayer of not screwing
things up, is to be able to designate a variable as being either "Positive Better" - e.g. Sales, Net
Income - or "Negative Better" - e.g. Expenses, Tax Rates. The AFMS is able to make these subtle distinctions. |
