Running a small business in Australia is never dull.
One month you’re balancing cash flow, the next you’re planning to hire — and before you know it, tax estimates are due. That’s when 3-way forecasting stops being an accounting term and becomes a practical way to bring calm and clarity to your numbers.
For Melbourne and Chadstone-based SMEs aiming to grow sustainably, secure funding, or strengthen financial control, a structured forecasting model is one of the most valuable assets you can build.
A 3-way forecast connects your Profit & Loss, Balance Sheet, and Cash Flow Statement into one integrated financial model.
Instead of viewing each report in isolation, it reveals how every business decision — from hiring to investing — affects both profit and cash.
As the Australian Taxation Office (ATO) notes, businesses that actively plan their cash flow are better positioned to meet tax and compliance obligations and avoid financial stress (ATO – Managing cash flow)
It helps answer the questions that really matter:
Are we profitable and liquid?
Can we afford that new hire or equipment?
What will our tax position look like next quarter?
How would a bank or investor see our numbers?
At 42 Advisory, we call this looking through the windscreen, not the rear-view mirror.
A smart model ties your operational choices directly to financial outcomes.
Examples:
Medical practice: project consulting hours, billings, wages, consumables.
E-commerce: model ad spend, fulfilment, and inventory cycles.
Gyms & studios: forecast class schedules, lease terms, and growth.
Crypto ventures: plan trading activity, fees, and tax implications.
At 42 Advisory, we help turn those assumptions into a story your numbers can tell — one grounded in data, not guesswork.
Cash flow — not profit — keeps businesses alive.
A 3-way forecast maps:
Receipts and payment timing
GST and PAYG instalments
Super and payroll obligations
Loan and ATO repayments
Capital and inventory movements
The result is a rolling cash view that shows when — not just what — financial commitments hit.
The ATO encourages SMEs to maintain 12-month cash projections to navigate seasonality and meet obligations with confidence (ATO – Cash flow projection guide).
Banks and investors expect structured, transparent forecasts. They look for:
Revenue stability
Expense discipline
Cash runway and break-even points
Sensitivity to sales or cost changes
The Reserve Bank of Australia (RBA) highlights that small businesses continue to face challenges accessing finance, particularly when lenders perceive uncertainty or risk in their financial information — emphasising the importance of clear and robust financial reporting and planning in improving credit outcomes. While credit availability has recently improved, lenders still weigh financial transparency heavily when making credit decisions, especially for smaller enterprises without extensive trading histories. Reserve Bank of Australia
A well-built 3-way forecast gives funders confidence that you understand your numbers, risks, and repayment capacity — exactly the credibility Melbourne lenders expect.
One of our recent clients — a new GP medical practice — had been operating for only six months when their leased property unexpectedly went up for sale.
Working closely with our debt advisory partners, we built a detailed 3-way forecast and 3-year financial projection based on just a few months of trading data.
This model formed part of a full-documentation loan application with ANZ Bank. Despite the short trading history, the strength and transparency of the forecasts satisfied ANZ’s credit criteria — resulting in a $2 million loan approval to purchase the property outright.
The practice — a 6-room facility — was able to secure ownership, continue operations uninterrupted, and position for future expansion.
This case shows that credible financial modelling isn’t just about numbers — it’s a strategic enabler that can transform a young business into a bankable one.
Assumptions change. Your model should too.
Each month, we update:
Actual sales and margins
New hires and wage changes
Rent adjustments or marketing ROI
Supplier cost movements
Loan balances and interest rates
This turns your forecast into a living decision-support system, not a static spreadsheet.
At 42 Advisory, we integrate this process into your Xero data flow, so insight becomes routine — not reactive.
Looking ahead creates opportunity, not just compliance.
A forecast lets you:
Anticipate PAYG and GST liabilities
Time deductions and asset purchases
Manage dividends and distributions
Plan superannuation and cash availability
Forward-looking tax planning isn’t about aggressive timing — it’s about strategic visibility. As business.gov.au outlines, regular financial forecasting helps small businesses remain compliant while improving cash retention (Business.gov.au – Forecast your cash flow).
We blend accounting, tax, and automation to engineer 3-way forecasts that adapt as fast as your business does.
Our system includes:
Tailored financial models aligned to your structure
Monthly assumption reviews and variance tracking
Scenario planning for funding and tax outcomes
Integration with Xero and cloud automation
Advisory support for banks and investor presentations
Intelligent. Calm. Precise.
That’s how 42 Advisory brings clarity to complexity — because sometimes, the smartest answers really do come from 42.
Whether you run a medical clinic in Chadstone, an e-commerce brand, or a tech startup, a 3-way forecast gives you:
The clarity to plan
The confidence to act
The control to grow
It’s not about predicting the future — it’s about engineering it.
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