3-Way Forecasting: Automated Cashflow Forecasting Made Easy

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Here at Reach Reporting, we have developed a feature that disrupts the financial planning and analysis (FP&A) industry and changes the way that 3-way forecasting will be done moving forward. One of the biggest problems with setting this up is the time and expertise. Luckily, our tool does this for you.

Was that bold enough?

How about now?

What used to take days/weeks/months to set up now takes a couple of minutes and automatically updates moving forward. Some of you reading this might still need more information. So let me share the top 4 questions that we hear the moment we mention 3-way forecasting for the first time:

What is a 3-way budget?

A 3-way budget is a strategic financial plan that aligns three essential financial statements: the P&L, the Balance Sheet, and the Cash Flow Statement. It is typically set once a year. Unlike a simple revenue and expense projection, a 3-way budget considers the impact of budgeted activities on various financial aspects of a business. It allows organizations to evaluate the effects of their operational decisions on cash flow, assets, and equity over a specific period, providing a holistic approach to financial planning.

What is a monthly 3-way forecast?

A monthly 3-way forecast is typically an adjustment of your budget as the year goes on and is also a financial projection that integrates the three key financial statements: the Profit and Loss Statement (P&L), the Balance Sheet, and the Cash Flow Statement; otherwise known as the 3 financial statements in a financial model. This forecasting approach provides a comprehensive view of a company’s financial health, performance, and anticipated cash flow for each month. It helps businesses plan for future expenditures, revenue growth, and capital needs while ensuring alignment between these critical financial components.

What is a 4-way forecast?

A 4-way forecast is an advanced financial projection that encompasses not only the three main financial statements (P&L, Balance Sheet, and Cash Flow Statement) but also introduces an additional layer, often referred to as the fourth dimension. This dimension could include non-financial performance indicators, key performance indicators (KPIs), or operational metrics that further enhance the forecast’s accuracy and relevance. A 4-way forecast offers a more comprehensive understanding of the relationships between financial and operational aspects of a business.

What is a 3-year cash flow forecast?

A 3-year cash flow forecast is a financial projection that predicts a company’s future cash inflows and outflows over a period of three years. This forecast provides insights into how cash will be generated and utilized, helping businesses make informed decisions about investments, financing, and operational strategies. A longer-term perspective allows organizations to identify potential cash crunches, allocate resources effectively, and plan for sustainable growth.

Ultimately, a 3-year cash flow forecast is an essential element of both a 3-way and 4-way forecast. It contributes to a comprehensive understanding of a company’s financial health, operational efficiency, and overall strategic planning.

Now, let’s list some of the reasons WHY you would want a 3-way forecast.

Future-Proof Your Business

Set your business up for success by getting a true reflection of your financial health. With Reach Reporting’s three-way forecasting, you can confidently say yes to growth opportunities and make informed decisions that drive success.

Clear Business Projections

Our platform provides clear cash projections, enabling you to make better business decisions. We help you become proactive with your cash flow and identify potential issues and shortfalls before they become problems.

Save Time & Effort

With Reach Reporting, you can set up workflows to automatically sync with your financial data and send reports straight to your inbox. Our platform saves you time, so you can focus on what matters most – growing your business.

Fast & Easy Reports

Three-way forecasting can be complex and time-consuming. Reach Reporting simplifies the process, allowing you to spend less time forecasting and reporting, and more time taking control of your business.

3-Way Forecasting in Reach Reporting

  • Truly Integrated 3 Statement Model: Seamlessly combine your Profit and Loss (Income) Forecast, Balance Sheet, and Cash Flow Forecast into a comprehensive, integrated forecast.
  • Future Cash Flow Projections: Project your cash flow for up to 3-5 years ahead, providing a clear view of your company’s financial position.
  • Automated Report Generation: Sync your financial data and generate reports with ease, enabling you to focus on making data-driven decisions.
  • Customizable Dashboard: Visualize your key metrics, track financial health, and identify trends with our customizable dashboard.

Next Steps

To learn more, visit our features page to see all of the things that Reach is doing for businesses like yours.

320+ reviews on the QuickBooks Online app store can tell you exactly how it is going to go with Reach Reporting.

Thanks for reading. Happy automating!

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