About This Template
An integrated three-statement model is the gold standard for financial planning at a growth-stage company. It links the P&L, balance sheet, and cash flow statement so that every change in one statement flows correctly through the others. A change in revenue assumptions flows through to the P&L, then to retained earnings on the balance sheet, and then to the cash flow statement — automatically, without manual recalculation.
This template is built for founders, CFOs, and finance managers at seed-to-Series B stage companies. It is structured as a 24-month monthly model with annual summaries, and covers the full range of planning assumptions — revenue drivers, headcount, COGS, opex, capex, working capital, financing, and tax. It is a starting point: the cell structure and logic are set up correctly, and you enter your own assumptions in the yellow input cells.
The model ships with illustrative assumptions pre-populated so that it calculates and displays sensible outputs on download. Replace all yellow cells with your own figures before sharing with investors or the board.
What's Included
Sheet 1: InstructionsA full model overview including the cell colour coding guide, a description of each sheet's purpose, the order in which to work through the model, and a list of the most common errors and how to fix them. The balance sheet check methodology is explained in detail.
Sheet 2: AssumptionsThe central assumptions engine that drives the entire model. Structured into eight sections:
- Revenue Drivers: Starting MRR, monthly growth rate by quarter, churn %, expansion revenue %
- COGS Drivers: Cost of goods sold as a percentage of revenue by revenue stream
- Headcount: Current FTE by department, planned hires by month, average salary by department, employer NI rate, benefits %
- Opex: Each cost category either as a percentage of revenue or as a fixed monthly amount
- CapEx: Asset name, purchase month, amount, and useful life for depreciation
- Working Capital: DSO days (debtor days), DPO days (creditor days), inventory days where applicable
- Financing: Existing debt balance, interest rate, repayment schedule, new funding tranches and timing
- Tax: Corporation tax rate, R&D tax credit percentage, losses brought forward
Monthly columns for 24 months with annual summary columns. Revenue lines by stream, COGS by stream, gross profit and gross margin %, then opex broken out by people, marketing, technology, G&A, and D&A. Subtotals for EBITDA, EBIT, interest, profit before tax, tax, and profit after tax. All rows link from the Assumptions sheet.
Sheet 4: Balance SheetMonthly snapshot of the balance sheet position. Assets section covers cash, accounts receivable, prepayments, gross capex, accumulated depreciation, and net capex. Liabilities cover accounts payable, accruals, deferred revenue, and debt. Equity covers share capital, share premium, retained earnings, and current period P&L. A check row at the bottom confirms the balance sheet balances to zero.
Sheet 5: Cash FlowMonthly direct-method cash flow statement. Operating activities: EBIT plus D&A adjustments plus working capital movements. Investing activities: capex. Financing activities: debt drawdown and repayment, equity raised. Net cash movement, opening cash balance, and closing cash balance, with the closing balance linking back to the cash line on the balance sheet.
How to Use This Template
- Start with the Assumptions sheet: This is the only sheet you need to edit. Fill in your revenue model first (starting MRR, growth rate, churn), then headcount, then the remaining cost lines. The P&L, balance sheet, and cash flow will update automatically.
- Understand the colour coding: Yellow = input. Do not touch blue formula cells. If you need to add a new revenue line or cost category, copy an existing row and adjust the label — the formulas will follow the same pattern.
- Verify the balance sheet: After entering assumptions, check that the balance sheet check row is zero in every month. If it is not, the most common causes are a working capital formula error (check that AR and AP movements in the cash flow match the balance sheet movements) or a financing entry that has not been captured in both the balance sheet and the cash flow.
- Check for common errors: Negative cash balances (the model will not stop you going negative — this means your model is projecting you run out of money in that month); D&A in the cash flow not matching the accumulated depreciation movement in the balance sheet; tax being applied in months before the first taxable profit.
- Build scenario variants: Save three copies of the model — Base, Downside, and Upside — and vary only the yellow Assumptions cells. This is the standard format for presenting financial projections to investors.
Frequently Asked Questions
Why does my balance sheet not balance?
The most common causes are: (1) a working capital movement in the cash flow that does not match the corresponding balance sheet movement — check that the AR change in the cash flow equals the closing AR minus the opening AR on the balance sheet; (2) a CapEx entry that is in the cash flow but not on the balance sheet, or vice versa; (3) a new financing line (debt or equity) that has been captured in one statement but not the other. Work through the check row column by column — the first month it breaks will isolate the source of the error.
What's the difference between EBITDA and cash flow?
EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) is an accounting measure of operating profitability. It excludes non-cash charges (depreciation) but does not account for working capital movements, capex, interest payments, or tax. A company can have strongly positive EBITDA and still be cash-negative if it is investing heavily in capex or has long debtor days. Cash flow is the real measure of cash generation. For a pre-profitable company, the number that matters most is net burn — the net cash consumed by operations each month.
How do I model a fundraise?
In the Assumptions sheet under the Financing section, enter the expected equity raise amount in the month you expect to receive the funds (not the month you start the process). Enter it as a positive number in the "Equity raised" row. This will flow to the cash flow statement as a financing inflow, and to the balance sheet as an increase in share capital or share premium. Model three scenarios: the fundraise completes on time, it completes three months late, and it fails entirely. The third scenario tells you when the company runs out of cash under the no-raise assumption.
How granular should revenue assumptions be?
At seed stage, a single revenue line with a growth rate and churn rate is often sufficient. At Series A, investors typically want to see the model broken out by revenue type (e.g., subscription vs usage vs professional services) with separate growth and churn assumptions for each. The more mature the company, the more granular the revenue model should be — but granularity should always be justified by real data, not imposed for the appearance of rigour. A model with 10 revenue lines all growing at the same rate is less credible than a model with three well-supported revenue lines.
