A three-way cash flow (or 3-way forecast) is an integrated financial model that combines a company's income statement, balance sheet, and cash flow statement into one cohesive, dynamic, and connected projection. It ensures internal consistency across all three statements, providing a holistic view of financial health, liquidity, and future performance.
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.
A 'three-way' is a combination of cash flow, profit and loss, and balance sheet forecasts all integrated into one spreadsheet. Banks and all other providers of finance are increasingly requiring these from businesses before granting them finance.
How Do You Build a Three-Statement Model?
At a high-level, the 3S Process consists of three stages (Story, Strategy, and Solution), which are described in detail in the article. Stage 1: Story in the process is inspired by the Harvard Case Method to provide context for a problem. Stage 2: Strategy uses Design Thinking to produce candidate solutions.
An Example of a 3-Way Match
They verify that the quantity and details match those specified on the invoice — in this case, that the order is for 1,500 circuit boards at a rate of $3 each, totaling $4,500 altogether. Next, they check the PO and invoice against the order receipt (or receiving report).
The triple bottom line concept suggests that business outcomes cannot be measured by just the financial bottom line. Instead, they must also consider the well-being of people and the planet. This means organizations that adopt TBL frameworks are accountable to all stakeholders, not just shareholders.
Increased Chances of Human Error
Relying on human involvement to match invoices, POs, and receipts can raise the risk of data entry errors, misinterpretation, and accidental oversights. That, in turn, may lead to overpayments, missed payments, and discrepancies that take time to fix.
Cash flow is the movement of money into and out of a company over a certain period of time. If the company's inflows of cash exceed its outflows, its net cash flow is positive. If outflows exceed inflows, it is negative. Public companies must report their cash flows on their financial statements.
Common cash flow mistakes include improperly categorizing where funds are coming from, disclosure errors and forgetting to account for last-minute changes to your balance sheet. An outside accounting team or advisor can help you assess your processes and ensure more accurate cash flow reporting.
What is a 3-Statement Model? In financial modeling, the “3 statements” refer to the Income Statement, Balance Sheet, and Cash Flow Statement. Collectively, these show you a company's revenue, expenses, cash, debt, equity, and cash flow over time, and you can use them to determine why these items have changed.
A cash flow statement provides substantial information on the company's financial health and comprises three important sections: Cash Flow from Operations (CFO) Cash Flow from Investing (CFI) Cash Flow from Financing Activities (CFF)
The basic building block of a DCF model is the 3 statement financial model, which links the financial statements together. This DCF model training guide will take you through the steps you need to know to build one yourself.
The TBL dimensions are also commonly called the three Ps: people, planet and profits. We will refer to these as the 3Ps.
Sustainable development means meeting today's needs without compromising future generations. It balances economic growth, social equity, and environmental protection—aligned with the “triple bottom line”: people, planet, and profit.
"3Ps" (or "three Ps") refers to different sets of core concepts depending on the context, most commonly People, Process, and Product (for general business analysis), Planet, People, and Profit (for sustainability/Triple Bottom Line), or Product, Price, and Promotion (for marketing). These frameworks help evaluate business success, strategy, or impact by focusing on these key, interconnected areas.
3-way matching best practices
Who is responsible for a 3-way match? The buyer is responsible for verifying the purchase using a 3-way match before payment is released to the supplier. This ensures that each step aligns with the last from when the buyer creates the purchase order to when the payment schedule is finalized.
Benefits Of Three-Way Matching. Improved Accuracy in Payments: Validation: 3-Way matching ensures that each invoice is cross-verified against the purchase order and the receiving report. This validation process confirms that the billed amounts are correct and correspond to what was ordered and received.
However, the reality in 2026 is nuanced. AI is not replacing the CFO; it is retiring the legacy version of the role—the "Chief Spreadsheet Officer" focused solely on historical reporting and manual control. Modern finance demands more than accurate books; it demands strategic foresight.
What are the best AI tools for financial services in 2025? Top AI tools include DataSnipper, Workiva, MindBridge, Datarails, Cube, Ramp, Brex, Validis, Power BI with Copilot, and Alteryx. Each supports different needs—from automation and anomaly detection to spend management and ESG reporting.