You’ve got a workbook with dozens of tabs. There’s a sheet for revenue calculations. Another for debtor balances. A few P&L extracts. Some assumptions hidden away somewhere. And a tab called “Final_Final_V3” that nobody has dared touch for months.

From your perspective, it just about does what you need it to do. You know which cells to update each month. You know where to look when an error appears. And you know which parts of the workbook can safely be ignored because they were created for a one-off exercise 18 months ago and haven’t been touched since.

So, the model works.
Or Does it? The real test isn’t whether you can use it. The real test is whether someone else can.

The danger isn’t usually obvious. Models that evolve over several years often become dependent on the person who built them. New calculations are layered on top of old ones. Temporary workarounds become permanent. Additional tabs appear for one-off scenarios and are never removed. Over time, what started as a useful forecasting tool becomes something that only one individual truly understands.

The impact goes far beyond inconvenience. If the only person who understands the model is unavailable, reporting can slow down, forecasting can become unreliable and important commercial decisions may be delayed while people try to work out how the spreadsheet actually works.

Key person dependency isn’t just an HR issue; it can become a financial risk.

The challenge becomes even greater during a refinancing, investment or sale process. Lenders, investors and buyers increasingly expect financial models that are transparent and easy to follow. If assumptions can’t be traced or calculations can’t be understood without lengthy explanations, confidence in the outputs quickly starts to erode. Before long the model only makes sense to the one person who actually has to make it work. And that’s a risk worth addressing before someone else discovers it.

If you’re unsure whether your financial model would stand up to scrutiny from colleagues, lenders or investors, speak to Daniel Booth or Ben Whitworth about building a model that’s as resilient as the business it supports.