Speed is good, but accuracy is everything

FINANCIAL MODELLING EXPERTS

Author:

Danny Leitch

Published:

16 Dec 2014

Comments:

3 Comments

Category:

Advice to new modellers.

Virtually every modeller that I have ever worked with (and I would include myself) starts out with the same issue. It is a misunderstanding of the relative importance of speed vs. accuracy.

Most new modellers are keen and enthusiastic and want to impress by turning work around as quickly as possible. They will rattle through a model at super-fast speed, jam in a load of inputs and then move on to the next one.

A fast turnaround is great, but what if the model is not right?

If the model goes to your manager for review, any positive impression from the quick turnaround will be more than undone if they find it strewn with errors and have to spend their valuable time resolving them. It will not take too many incidents like this before your manager loses confidence in you and your work altogether.

Worse, if the model makes it out to senior management (or a client) with errors, this can cause significant reputational damage if not financial loss.

In the world of modelling, once credibility is lost through errors, it is very difficult if not impossible to get it back.

Speed is good, but accuracy is everything.

If you are a new modeller, make sure this does not apply to you. Give yourself time to do things properly and review your own work. As a rule of thumb, allow double the amount of time you think a modelling task will take you in order to give you time to do it in a considered manner and review your own results.

If your manager is regularly coming back to you with errors, this is harming your reputation as a modeller, you are not taking enough time to do things properly.



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Danny Leitch
Danny Leitch no longer works for F1F9 but we really liked his blog so we have kept it.