Financial Forecast Template

What a financial forecast template should include

A financial forecast template should answer one question: with these assumptions, what will revenue, profit and cash look like, and how much room is there if the assumptions are wrong? For a SaaS company that takes seven linked parts. Most of the free templates that rank for this search are built for businesses that sell units, and few model more than one case. That misses how subscription revenue is built and how much cash a slow year eats.

The eighth tab, Start here, explains each step and the method. The workbook leaves out a balance sheet on purpose. For most growing subscription companies, the decisions a forecast drives (hiring, spend, fundraising timing) depend on the P&L and on cash. If your lender or investor needs a balance sheet, add one that links to the Cash tab. To report the months that have already closed, use the profit and loss statement template, which has the same SaaS lines for actuals.

How to fill in the template, step by step

Fill in three tabs. The other five calculate themselves.

1. Assumptions, company. Enter the model start month, starting ARR, cash, open pipeline on day one, collection lag in months, hosting cost as a share of subscription revenue, services as a share of new ARR, commission rate, payroll tax and benefits load, the yearly salary increase, and AE quota, attainment and ramp months.
2. Assumptions, scenarios. For Low, Base and High, enter pipeline created per month, its yearly growth, dollar win rate, sales cycle in months, average new deal ARR, GRR and NRR. Then set the twelve seasonality weights from your own closed-won history. The check turns to "OK" when they average 1.00.
3. Headcount. One row per role, or per group of identical roles: department (COGS, S&M, R&D or G&A), people, salary, start date and end date. Mark quota-carrying AEs with Y so the Summary can test selling capacity.
4. Opex. Every cost that is not payroll: marketing programs, tools, rent, legal and audit, recruiting. Each line is either a fixed amount per month or an amount per person per month, with a yearly increase.
5. Read the Summary. The annual P&L for the scenario picked in Assumptions cell B5, the scenario comparison, and five checks: seasonality, the ARR bridge, the P&L tying to the Cash tab, scenario order, and roster rows missing a department or start date.

Financial forecast example: a $6M ARR SaaS company, three years

This is the worked example inside the example file. The company and every number are illustrative, made up to show the mechanics. It starts January 2027 with $6,000,000 of ARR, $9,000,000 of cash, $4,000,000 of open pipeline and 46 people by the end of the first year.

Step 1, new ARR. In the Base case, pipeline created in January closes four months later at a 22% dollar win rate, scaled by the month's seasonality. May's new ARR is $950,000 x 22% x 0.95 = $198,550. Before January's pipeline can close, the $4,000,000 of open pipeline closes instead, spread over the first four months: $1,000,000 x 22% = $220,000 a month before seasonality.

Step 2, the ARR bridge. An 88% GRR means existing ARR loses 1 - 0.88^(1/12) = 1.06% a month. A 101% NRR adds back 1.01^(1/12) - 0.88^(1/12) = 1.14% a month as expansion. Year one in the Base case: $6,000,000 beginning ARR + $2,544,300 new + $972,425 expansion - $901,825 churn and contraction = $8,614,900 ending ARR, 43.6% growth.

Step 3, the P&L and cash. The Base case, year by year:

The burn multiple is net burn divided by net new ARR: $3,301,568 / $2,614,900 = 1.26x in year one. Cash bottoms at $2.48M in September 2029, then turns up as the company reaches cash flow break-even.

Step 4, the scenarios. All three keep the same hiring and spending plan. Only revenue changes.

Two findings come out of the comparison that a single-case forecast would hide. First, the Low case runs out of cash in June 2029 on the same spending plan, so the plan needs a trigger: for example, if year-one new ARR tracks to the Low case by the end of Q2, hold the year-two hires. Second, the High case needs 102% of the selling capacity the hiring plan creates in year one. The upside is only real if AEs are hired earlier, because a new AE in this example takes 15 months to reach full productivity.

The formulas in the template, in Excel and Google Sheets

Every formula uses functions both apps share. Examples come from the Base case of the worked example.

The monthly loss and expansion rates are set so that a customer base with no new sales lands exactly on the annual GRR and NRR you entered after twelve months. Divisions are wrapped in IFERROR so the blank file shows zeros instead of errors. For runway in months on a single number, the cash runway formula is cash divided by monthly net burn.

How do you forecast revenue for a SaaS company?

Build it from ARR, not from last year's revenue plus a growth rate: new ARR from pipeline, minus what you lose, plus what existing customers add. That is the same bridge ORM uses for gross and net retention, and the ARR waterfall guide shows it month by month. Four details decide whether the revenue line holds up.

• Use a dollar win rate. Pete Furseth's example: a pipeline with an $80,000 average deal size where closed-won deals average $40,000. Most deals close for less than the amount in the CRM. Apply a count-based win rate to those pipeline dollars and the forecast shows twice the new ARR that actually closes. Divide won ARR by pipeline ARR instead.
• Split the quarter into its sources. Pete breaks every quarter into deals already in pipeline on day one, deals created and closed inside the quarter, and deals pulled forward from later quarters. Across ORM customers, only about 20% of the pipeline with close dates in the quarter on day one usually closes in that quarter. That is why the template closes open pipeline at a win rate, not at face value.
• Treat renewals differently from new business. Renewal amounts and dates are mostly known; new business depends on stage movement. The template carries renewals as a retention rate on the ARR base and new business as pipeline, so the two never share one probability.
• Add seasonality. Across ORM's customers, Q4 is usually the largest quarter, then Q2, Q3 and Q1, and the third month of a quarter is always the largest. The example weights follow that pattern. Replace them with your own two or three years of closed-won ARR by month.

For a long-range model built only on the ARR bridge, with rules for defending each growth assumption, read how to build a three-year revenue forecast. For the deal-by-deal view of the current quarter, use the sales forecast template.

Benchmarks to sanity-check a SaaS forecast

Use your own history first. Use benchmarks to spot an assumption that needs a reason written next to it.

The worked example spends well above the sales and marketing median in year one (57% of revenue), which is why it burns $3.30M. That is a choice a board can accept when the burn multiple stays near 1x, and one to revisit fast if new ARR tracks to the Low case. The Maxio gap is the strongest reason to show three scenarios: the median company planned nine points more growth than it delivered.

What Pete Furseth checks before a forecast goes to the board

Pete Furseth, ORM's COO, works on forecasts and capacity plans with B2B SaaS revenue and finance teams. These are the checks behind the template's design.

• Show a range, not one number. "A good forecast should not pretend there is only one possible outcome." Pete wants a low case, an on-target case and an upper bound, so the board sees the expected outcome and the risk around it. That is the Low, Base and High layout.
• Make it consistent and traceable. A number on one slide should be the same number on the next, or come with a reason it changed, and every figure should drill down to how it was built. In the template every output traces to a yellow input, and the Summary checks that the P&L ties to the Cash tab.
• Expect the assumptions to break. The most common reason a forecast misses is that something in the business or the market changed and the model kept running on old assumptions: a new competitor pushes deal sizes down, tighter capital lowers win rates, uncertainty stretches sales cycles. Those are the scenario drivers, on purpose.
• Hire ahead of the revenue. It can take a seller 15 to 18 months to confidently hit quota, and assigned quota is not productive quota. The template counts AE capacity with a ramp, and the example flags that the High case needs more ramped AEs than the plan hires. For ramp curves by role, use the sales capacity planner.
• Write the assumptions down and say it early. Pete wants ramp rates, addressable market, average sales price, win rate and days to close documented, with the reason each one changed. If the model says the number will not be hit, communicate it. "Bad news does not get better with time."

Financial forecast, budget or projection?

A forecast is what you expect to happen, updated as actuals come in. A budget is the spending plan you commit to for the year. A projection usually means a longer or scenario-based view, such as a five-year model for investors. The template is a forecast that holds a budget: the Headcount and Opex tabs are the spending plan, and the scenarios show how far revenue can fall before that plan stops working. ORM's glossary covers forecast vs budget and the revenue projection in more depth, and the annual operating plan is where year one of this forecast should land.

Common financial forecast mistakes the template catches

• Revenue from a growth rate. "Grow 40%" is a target. New ARR from pipeline, win rate and cycle is a forecast you can check every month.
• Counting ARR as revenue. ARR on December 31 is not the year's revenue. In the example, $8.61M of ending ARR goes with $7.20M of subscription revenue in year one.
• Even months. Splitting new ARR evenly makes January look behind and December look ahead. The seasonality weights fix that.
• Salaries without the load. A $120,000 salary costs $146,400 a year at a 22% tax and benefits load in the example.
• One case. Without a Low case, nobody sees the month the cash runs out until it is close.
• Hires counted at full speed. A new AE books little in the first months. Capacity has to be created before the revenue it supports.

ORM's take: the template shows the shape, the forecast keeps it current

A financial forecast template makes the plan explicit: this revenue, from these drivers, with these people, burning this much cash. It cannot tell you in week six that sales cycles are stretching or that deals are closing smaller. Pete separates the two jobs. Planning puts the right people in the right seats. Prediction is about execution: what is in the pipe, what will show up this quarter, and what will close. Pete also describes where doing all of this by hand ends up: a Sales Ops team maintaining "37 spreadsheets with 12 tabs in each."

ORM plans capacity from your own ramp and productivity data, then forecasts new and expansion revenue against that plan and updates it as the quarter moves, so the revenue line in a model like this one stays current. ORM targets 95% forecast accuracy on the forecasts it builds.

Common questions

How do I create a cash flow forecast?

Start from the cash in the bank today, then add what you expect to collect and subtract what you expect to pay, month by month. For a SaaS company, collections follow revenue by your payment terms and most costs are payroll. The Cash tab in this template does that for three scenarios and shows the first month the balance would go below zero.

How do I create a budget forecast in Excel?

Put every assumption on one tab, build revenue from drivers (pipeline, win rate, retention), list headcount by role with start dates, add other costs by department, and let a monthly P&L add it up. Keep inputs in colored cells and formulas everywhere else. This template follows that structure, and the formulas table on this page shows each formula in Excel and Google Sheets.

Can you provide an example of a financial forecast?

The example file on this page is one. An illustrative SaaS company starts with $6M of ARR and $9M of cash. In the Base case ARR reaches $8.61M in year one and $15.87M by year three, and cash bottoms at $2.48M. In the Low case, with the same spending plan, cash runs out in June 2029. Every number traces back to a yellow input cell.

Is there a free Excel template for financial projections?

This one. The download is a standard .xlsx file with eight tabs and no macros, so it opens in Excel and in Google Sheets. There are two versions: a worked example with illustrative numbers and a blank copy with the same formulas. No email is needed. It is built for subscription software, so revenue starts from ARR, pipeline and retention instead of units sold.

Should a financial forecast cover 3 years or 5 years?

Three years covers what most SaaS companies need: month by month for year one, coarser after that. Investors sometimes ask for five, but years four and five rest on assumptions nobody can test yet. This template runs 36 months. For a 5 year projection, extend the annual growth rates and label the outer years as a projection, not a forecast.

How often should you update a financial forecast?

Compare it with actuals every month and re-forecast at least every quarter. Update sooner when a driver moves two months in a row: win rate, deal size, sales cycle or retention. Pete Furseth, ORM's COO, sees the same failure again and again: the market changed, and the model kept running on last year's assumptions.

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