Why modern manufacturers are ditching spreadsheets for financial modelling

Is your financial model future-ready?

In 2026, Australian manufacturers are being forced to look hard at whether their financial models are fit for the future – or quietly holding them back.

For many Australian manufacturers, financial models are not something consciously designed – they are inherited. Built incrementally over years, and often by multiple hands, these models can gradually evolve from a simple forecasting tool into something more unwieldy. What begins as a spreadsheet designed to answer one question can grow into a catchall solution expected to do everything, from operational forecasting to capital planning.

According to Tim Linke, Partner at RSM Australia, lack of clarity around intention is one of the clearest signs a model is no longer fit for purpose. Complexity creeps in unnoticed, logic layers stack on top of one another, and responsibility becomes diffused. The result is a model that few people fully understand, yet many rely upon for critical decisions.

The biggest thing that comes to mind is where the model is trying to do everything for everyone,” Linke said.
“Rather than having a clear, defined purpose, it’s evolved or mutated into a multi-purpose, catch-all tool which is incredibly complex.

“What we often see is a series of model owners, lots of authors along the lifecycle, and limited understanding of how it all comes together. That’s where performance issues creep in, but more importantly, so does risk.”

When spreadsheets stop being your friend

Excel remains the backbone of financial modelling across manufacturing – and for good reason. Its flexibility allows teams to build, adjust and interrogate forecasts quickly, and to share outputs easily with stakeholders. Used correctly, it remains a powerful tool. However without the right guardrails in place, it can quickly become a liability.

Linke describes Excel as a double-edged sword. Its strength lies in its adaptability, but that same flexibility makes it easy for errors, inconsistencies and undocumented logic to creep in. The danger point comes when spreadsheets start trying to replace systems they were never designed to be.

Rather than serving as a forecasting overlay, models can gradually morph into pseudo-ERP systems, attempting to track complex supply chains, inventory movements and operational detail. At that point, risk multiplies, confidence erodes and the model’s original purpose is lost.

“Excel’s greatest benefit is its flexibility, you can do a lot with it,” Linke said.
“But that also means it’s easy for risk to creep in, especially when the model’s purpose isn’t clearly defined.

“When a model starts trying to replace an ERP, particularly in a business with a big supply chain, that’s where problems arise. You want the ERP tracking what’s known, and then you extract from that system to do your forecasting and analysis.”

In a business environment increasingly shaped by global volatility, static forecasts are no longer sufficient according to Linke. Manufacturers need financial models that can explore a range of outcomes, from best-case to worst-case, and help decision-makers understand how sensitive the business is to change.

He said that scenario planning allows businesses to test assumptions against uncertainty, whether that uncertainty comes from supply chain disruption, geopolitical instability, regulatory shifts or sudden changes in demand. The value lies not in predicting the future perfectly, but in being prepared for multiple versions of it.

Effective scenario modelling starts with reliable historical data, typically drawn from an ERP or core system of record. From there, forecasting tools can overlay assumptions and test how outcomes shift across different scenarios, providing management with confidence and clarity.

“You take information out of your system of truth and then overlay the crystal ball, the ‘what if’ scenarios. That’s where modelling really shines,” Linke said.

“You can look at bookends – upside, downside, worst case, best case – and then think about what a more conservative base case looks like. It’s built on historical information, so there’s confidence in what you’re testing.”

Bridging the gap between finance and the factory floor

Linke believes one of the most common reasons financial models fail to influence decision-making is not technical – it’s cultural. When models are built in isolation by finance teams, without input from operations, they risk becoming disconnected from reality on the factory floor.

If operational teams do not recognise their own experience reflected in the numbers, confidence in the model quickly evaporates. At best, the output is ignored; at worst, it undermines trust between teams. For a model to succeed, it must reflect how the business works, not just how it appears on a spreadsheet.

Linke emphasised the importance of collaboration, ensuring key stakeholders across finance and operations are involved early and regularly in the modelling process. This alignment helps reconcile differing perspectives and produces outputs that are both technically sound and operationally credible.

Models live and die by experience,” he said.

“Finance might have a view of how things work, but if that doesn’t align with operations – where the rubber hits the road – the model just isn’t accepted.

“We’re really focused on getting key stakeholders into the room, so everyone has a seat at the table. Finance brings the numbers, but operations bring insight into how the business ticks.”

Technology, automation and the human factor

As manufacturers invest in automation, AI and advanced analytics, financial modelling must evolve alongside them. These technologies offer opportunities to improve efficiency, reduce manual processes and generate richer insights – but they are not a substitute for human judgment.

Linke sees modelling as a critical bridge between operational change and financial outcomes, helping businesses understand not just what technology costs, but what value it creates. The goal is not to replace people, but to free them from repetitive tasks so they can focus on higher-value, more human-centred work.

While tools continue to evolve, Excel remains central for many use cases, supported by more advanced platforms where appropriate. The key is selecting the right tool for the task, balancing functionality, cost and user experience rather than pursuing technology for its own sake.

“The question isn’t how to replace people,” Linke said.

“We look at what technology can do better, automate that piece, and then let people focus on more complex, more human-centric tasks that actually add value.”

A practical self-check for future readiness

For small- and medium-sized manufacturers with limited resources, becoming future-ready does not require rebuilding everything at once. Instead, Linke advocates an iterative approach, focusing first on areas of greatest risk or volatility.

By doubling down on the most critical 20 per cent of the business and modelling those areas with greater granularity, manufacturers can build confidence incrementally. Broader assumptions can remain higher-level, reducing complexity while still improving decision-making.

Ultimately, a future-ready model is one that decision-makers trust – because they understand how it works, what assumptions underpin it, and how it responds to change.

“The real self-check is whether the business is comfortable with the end-to-end logic,” Linke says. “Do people understand how the model works, or is it something that’s just evolved over time?

“The whole purpose of a model is to enable critical decisions. If the wind starts to turn, you want scenarios already thought through so you can pivot, rather than being caught behind the eight ball and playing catch-up.”

Building models that support better decisions

At its best, financial modelling is not about complexity – it is about clarity. Clear purpose, aligned stakeholders, disciplined assumptions and the ability to adapt are what separate future-ready models from legacy tools that constrain growth.

RSM Australia approaches financial modelling as part of a broader, end-to-end advisory offering, supporting manufacturers through accounting, audit, funding, grants and capital structuring, while helping modernise historical approaches in line with a rapidly changing landscape.

For manufacturers navigating uncertainty, the message is clear: a well-designed financial model is no longer optional. It is a critical capability for resilience, confidence and long-term sustainability.

This article was first published in the Manufacturers' Monthly