A few years ago, I built one of the most widely-used SaaS Financial Model templates. It was a popular resource among founders, CEOs, and startup finance leaders, and it has maintained a #1 rank on Google for years. I'm always thrilled when people tell me that they've built their own models on top of my template.

I lost the original model with the sale of my previous company, but it provided me with an opportunity to rethink and build it from scratch. Truth be told, the old model was long overdue for a major update. Even the most recent version from 2020 was based on logic I had developed years earlier and badly needed an overhaul.

If you’re looking to build a robust financial model that’s quick to update and designed to scale with your revenue into the tens of millions, this template is for you.

Or if you prefer a software approach, check out our financial modeling software Cloudberry.

Why Do I Need a Financial Model?

"A robust financial model was key to our success," said no founder ever.

Throughout my career, I’ve worked with numerous founders, CEOs, and startup leaders, advising them on financial modeling. Not a single one of these leaders attribute their company’s success to a financial model. Instead, you hear the usual suspects of an amazing team, stellar product, right market, and even luck.

Yet, many of these founders would readily admit that without an operationally focused financial model, their companies could have been in dire financial straits. By “operationally focused”, I mean a financial model that’s actively used for decision-making—not the one you build while fundraising and never update again.

I find it easier to understand the importance of an operational financial model by considering what can go wrong without one.

What if you miss your Q1 revenue goals but continue hiring as planned? Without a financial model, how will you know if you can catch up in Q2, or if you’re heading toward a cash crunch? Should you delay planned hires? What if they’re the salespeople you need to hit this year’s targets?

In my experience, an operational financial model helps you plan more effectively and navigate changes. It’s like using Google Maps for your commute: you know the route you want to take, but when traffic or roadblocks appear, you want to quickly find the best alternatives to get where you need to go.

Model Overview

This post features a new-and-improved model I have built from the ground up. I have been personally using various versions of it on my fractional CFO work to fund my new startup.

The model features an example company making $15M ARR and 50% year-over-year growth. The company is currently focusing on cash flow efficiency.

I had a few requirements in mind while building this model. It needed to be:

1. Easier to use so I could onboard new clients quickly and efficiently
2. Support QuickBooks classes to avoid major changes in my clients' books
3. Include missing features like vendor-level forecasting

First, we’re going to cover building your company’s financial statements—Profit and Loss, Balance Sheet, and Cash Flow Statements—and how to update them quickly and efficiently using QuickBooks exports.

Second, we will dive into building forecasts. We will start with simpler forecasts built directly on the PnL, and move onto more complex forecasts on separate tabs that feed back into the PnL.

Finally, we cover Reporting, key SaaS metrics, and how to build summaries of your forecasts. I have included a wide variety of pre-built reports, but you can also customize them or build your own.

Let’s get started.