Advivo Accountants and Advisors share insights into why 3-way forecasting is important for your business’s financial stability.
Successful businesses need a strong strategic foundation and detailed data and insights to make the right business decisions. Your business is dynamic, so your planning and forecasting environment should be as well. When you want to be confident about cash position, when you want your business to be attractive to potential investors and lenders, and when you want to bring financial stability to your business, now and in the future, implementing a 3-way forecast is highly recommended.
What a 3-way forecast does is combine all three key financial reports into one consolidated forecast. It links your Profit and Loss (P&L), balance sheet and cashflow 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. This also makes a 3-way forecast beneficial when approaching banks and investors for financial support, as it provides accurate and robust information that explains the future prospects of your business model.
At Advivo, as part of our Financial Management Services, we have introduced a new tool which is the Future Fitness 3-Way Report™. This report provides a projected Cash Flow, Profit & Loss and Balance Sheet. By implementing 3-way modelling correctly, the Future Fitness 3-Way Report™ would be in sync, giving you a clear picture of your anticipated profit, the funds that should be in your bank and even your business’s overall net worth.
Creating a manual 3-way statement can be complex and time consuming. Our experienced team of accountants and advisors at Advivo make it easy for you to focus more time growing your business and less time forecasting and reporting, by integrating seamlessly with our Future Fitness 3-Way Report™, to give a true reflection of your financial health with clear, accurate cash projections.
Contact us today.