Why You Need an Operational Model – And How to Master It

In project finance, the model used to close the deal is rarely the one that guides the project through its operational life. Once financial close is achieved, the focus shifts from structuring and negotiation to performance, compliance, and forecasting. That’s where the operational model becomes essential.

What Is an Operational Model?

An operational model is a financial model used post-financial close to monitor, manage, and forecast the performance of an asset or project. Unlike a deal model, which is built to support the transaction process (e.g. pricing, structuring, and lender negotiations), an operational model is:

• Dynamic: It incorporates actual financial data and adapts to real-world changes.
• Forward-looking: It supports reforecasting and scenario analysis.
• Stakeholder-focused: It meets the reporting needs of lenders, investors, and regulators.

Why Isn’t the Deal Model Enough?

Deal models are often built under tight timelines and tailored to the needs of the transaction. They typically:

• Lack the structure to incorporate actuals or historical data
• Contain legacy calculations only relevant to financial close
• Are not designed for ongoing updates or stakeholder reporting

As a result, continuing to use a deal model post-close can lead to:

• Inaccurate forecasts
• Inefficient reporting
• Increased risk of errors and miscommunication

Key Considerations When Building an Operational Model

Transitioning from a deal model to an operational model isn’t just a technical exercise; it’s a strategic one. Here are some of the key modelling considerations:

1. Incorporating Actuals
   • You’ll need to integrate historical financial data from accounting systems and ensure it aligns with the model’s structure. This includes:
     • Creating interfaces for data imports
     • Converting accounting data into forecast-ready formats
     • Reforecasting based on actual performance
2. Cleaning Up Legacy Calculations
   • Many elements used to close the deal, such as structuring assumptions or placeholder debt schedules, must be removed or replaced. This includes:
     • Identifying and removing redundant sections
     • Freezing debt terms and repayment profiles
     • Updating depreciation and tax calculations
3. Enhancing Reporting
   • Operational models must meet the needs of multiple stakeholders. This means:
     • Properly incorporating key metrics like DSCR to consider historic actuals
     • Aligning outputs for lender and investor monitoring requirements
     • Building in robust checks and audit trails, particularly when reforecasting inputs
4. Testing and Validation
   • Confidence in the model is critical. You’ll need to:
     • Implement checks to validate historical data
     • Compare forecasts against actuals
     • Ensure data ‘rolls forward’ properly

Learn How to Do It Right: Deal Model to Operational Model Mastery

To help professionals navigate this transition with confidence, Forvis Mazars is offering a 1-day intensive course:
Deal Model to Operational Model Mastery

This hands-on training will equip you to:

• Understand the structural and functional differences between deal and operational models
• Apply best practice techniques to convert models accurately and efficiently
• Incorporate actuals and historic data from accounting systems
• Adapt models to reflect signed debt agreements and stakeholder reporting needs
• Implement rigorous testing to ensure model integrity

Who Should Attend?

This course is ideal for:

• Analysts, Managers, and Associate Directors
• Project sponsors, advisors, and lenders
• Anyone responsible for updating, reviewing, or building operational models

📅 Course Details

Deal Model to Operational Model Mastery | Forvis Mazars Financial Modelling

• Date: 22 September 2025
• Location: Sydney, Australia or Digitally (via Teams)
  • More information: daniel.brooks@forvismazars.com

• Date: 8 October 2025
• Location: Singapore, Asia or Digitally (via Teams)
  • More information: daniel.brooks@forvismazars.com

• Date: 23 October 2025
• Location: London, UK or Digitally (via Teams)
  • More information: kanika.sakhuja@gif.mazars.com

Want a Preview?

Check out our free webinar on operational models to explore the topic in more depth and see why this skillset is becoming essential across the industry.