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The Financial Model Template Trap: Beyond Basic Spreadsheets

Brian Campbell
Posted on
December 1, 2020
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A one-size-fits-all financial model template might sound like a good resource for saving time and getting control of your numbers. But it doesn’t exist. What you really need is something flexible that captures every unique aspect of your startup and makes it easy to collaborate with stakeholders—and that kind of financial model can’t live in a spreadsheet.

Financial model templates promise a one-size-fits-all solution for startup leaders who want to take control of their numbers. There’s just one problem: one size never fits all.

Imagine buying a one-size-fits-all suit. It would probably take dozens of alterations to make it sort of fit you. You make the pants a bit longer, bring in the waist, shorten the jacket’s arms, and keep making changes until you have some kind of Frankenstein suit that still doesn’t look quite right.

That one-size-fits-all financial model template you’re thinking about downloading? It’s a trap that will put your startup in a similar situation.

Spreadsheet-based templates don’t eliminate the most time-consuming parts of financial modeling. If you want to save time and improve decision-making, you need a solution that captures the uniqueness of your startup. One that connects to the systems you use to run your business and can easily be updated and shared with your leadership team.

The Problems with Spreadsheet-Based Financial Model Templates

If you’re looking for a financial model template, it’s because you want to short-circuit the complex and time-consuming process of building a spreadsheet from scratch. But trust me when I say, it just doesn't work. No matter how great that financial projections template looks on the surface, you’re going to spend countless hours tearing it apart to account for the assumptions that are unique to your business.

The problems with downloadable templates stem from the fact that they still force you to do your modeling in spreadsheets. Even if you take the time to tear a revenue model template apart and make it reflect your business, you’re left with a confusing spreadsheet loaded with assumptions that make it difficult to collaborate with other business leaders.

This level of complexity has consequences, including:

  • Error-Prone Modeling: With so many interwoven financial assumptions and hardcoded cells, all it takes is one mistake to cause a ripple effect that throws off numbers across the model.
  • Limited Collaboration: By the time you finish building out your bespoke financial model, you’re the only one who can understand all the assumptions powering the outputs. This makes collaborating with key business stakeholders frustrating or altogether impossible.
  • Inability to Track Performance in Real Time: It could take days to pull your actuals into a spreadsheet-based financial model, making it impossible to answer critical performance questions at the pace your business demands.

Strategic finance requires a more dynamic financial model that automatically updates with actual data and reflects the ever-changing assumptions across your business in real time. These things just aren't possible in a spreadsheet.

Strategic Financial Modeling Starts with Intelligent Building Blocks

With Mosaic, you can create financial models using intelligent building blocks—four distinct components connected to and powered by your underlying business systems.

Our Headcount Planner syncs with your HR system to pull in your employees and their salaries. The Top-Line Planner links to your CRM data and sales pipeline. The Expense Planner pulls from actual accounting records from your income statement. And the Balance Sheet connects to your cash balance. These elements speed up financial modeling and support strategic, real-time decision-making by automating 80% of the work that it usually takes to build and update your financial model.

High-growth startups can’t waste time updating financial models with actuals from ERP, HRIS, CRM, and billing systems every time someone wants an updated projection. You could go straight into these systems to get some basic data in the moment, but individual data sources on their own aren’t enough to support strategic financial decision-making.

Strategic finance starts at the intersection of the ERP, HRIS, CRM, and billing systems that support your business. Mosaic’s intelligent building blocks weave data from these connected sources together to go well beyond the financial modeling capabilities of your basic spreadsheet template providing a financial modeling software that can be completely customized to your business.

Mosaic’s Headcount Planner Captures the Fully Loaded Cost of Employees

Mosaic integrates with your HRIS so that your financial model captures the fully loaded cost of employees. This visibility is crucial for testing assumptions in a SaaS startup because head count is the biggest driver of spend accounting for as much as 75% of total expenses.

The Headcount Planner pulls data from Gusto and other HRIS solutions to ensure that you always see updated information about your active employees—their names, departments, roles, start dates, salaries, benefits, taxes, and more. Right from this view, the Headcount Planner allows you to add information for people you think you might hire in the future. Below, you’ll see we added five forecasted hires to the sample model to provide a few financial modeling examples.

Mosaic keeps up with the latest actuals, matching new employee records with forecasted hires in your financial model. When the Headcount Planner recognizes that new records match one of your forecasts, it will slot the employee into your actual head count so that your model stays in sync with the business.


Mosaic’s Top-Line Planner Maximizes Customer and Pipeline Visibility

A strategic financial model requires visibility into new and existing customers as well as data from your sales pipeline which live in your CRM.

Mosaic connects your financial model to CRMs like Salesforce and HubSpot to give you the building blocks necessary for accurate revenue forecasts. In the screenshot below, you can see how Mosaic leverages data from your CRM to help you build your top-line plan for next month, next quarter, or next year. You can see things like new bookings, the number of opportunities created, how they convert, the average length of your sales cycle, and the prices of each contract all in one place.

From here, you can change inputs likes sales price and number of opportunities to start testing assumptions in your forecasts. We’ve prebuilt a few best-practice templates for quota attainment and renewals/upsells to help you plan top-line scenarios based on your specific business model.

Mosaic’s Expense Planner Turns Accounting Data into Actionable Insights

Mosaic connects to ERP systems like Quickbooks to automatically map GL accounts into customizable categories that flow through to your financial model.

Without Mosaic, you’d spend countless hours going through and manually enter data for hundreds of GL accounts in a spreadsheet. A template might give you some generic categories and dummy accounts to work with, but these won’t reflect your business. Mosaic pulls actuals from your ERP in real time and frees up all that time you’d otherwise waste updating GL accounts in a spreadsheet.

Mosaic’s integration of ERP data establishes the structure of your financial model and gives you the flexibility to change assumptions at the account and department levels. For example, if your sales and marketing departments travel more than your G&A function, you can easily model that.

Within the Expense Planner, you’ll find prebuilt model methods, like per month value, per head value, and percentage of account. Mosaic automatically calculates historical averages that dynamically update saving you dozens of hours each month. You can apply these model methods to forecast for any GL account. For example, you can use the software to model payroll taxes as a percentage of salaries or commissions as a percentage of revenue.

Updating actuals for individual GL accounts is one of the most time-consuming parts of spreadsheet-based modeling. We wanted to automate that work so you can focus on strategic financial thinking.

Mosaic’s Balance Sheet Gives You Precise Control of Your Cash Flow

Mosaic’s Balance Sheet makes it easy to understand your startup’s cash collections and expenditures. Maintaining precise control of your cash and keeping everything balanced will make your financial forecasts more reliable and support your position as a strategic business partner. You can also easily add events like big software purchases or a capital raise to reflect cash inflows and outflows.


Because the Balance Sheet connects to the Headcount Planner, the Top-Line Planner, and the Expense Planner, you’ll see the cash impact of different assumptions, hiring forecasts, and scenarios in real time.

Don’t Settle for a Spreadsheet-Based Financial Model

Don’t settle for a spreadsheet-based financial model template that can’t keep up with your business. When you create models with our Strategic Finance Platform, intelligent building blocks give you the real-time insight and flexibility you need to make sure you’re always hitting your numbers — no matter how quickly your startup grows and evolves.

Want to try it out for yourself? Request access now, and see how easy it can be to embrace strategic finance.

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