https://www.calxa.com/3-way-forecasting/

When do I need a three-way forecast?

When you and your management want to be confident about your cash position.
When you want your business to be attractive to potential investors and lenders.
When you want to bring financial stability to your company, now and in the future.

What is a three-way forecast?

A three-way forecast, also known as the 3 financial statements is a financial model combining three key reports into one consolidated forecast. It links your Profit & Loss (income statement), balance sheet and cashflow projections together so you can forecast your future cash position and financial health.

Because your cashflow forecast is driven by the real-time data in your balance sheet and profit and loss statements, the report has accounting integrity. For this reason, a three-way forecast is also beneficial for banks and investors.

In addition to providing granular financial forecasts that explain the future prospects of your business model, three-way forecasts are accurate, robust and provide the best possible insights for your future financial position.

Why is three-way forecasting important for a business?

A three-way forecast is important for a business as it highlights future financial situations enabling you to ensure that the business can afford to pay suppliers and employees.