3-Statement Model Setup for Advisory
This use case describes how an accounting or advisory firm can standardise the way it sets up three statement models for clients in Model Reef.
The aim is to have a repeatable pattern that team members can follow each time a client engagement requires a planning or advisory model.
When to use this pattern
Use this pattern when:
You want all advisory models to share a common backbone.
You want to minimise the time it takes to onboard a new client onto a 3 statement model.
You expect colleagues to move between models and quickly understand the structure.
This pattern is also a foundation for other use cases such as forecasting packs, board reporting and valuations.
Architecture overview
A standard advisory model should include:
A clear branch structure, even if you start with a single entity.
Complete variable sets for revenue, COGS, Opex, staff, tax, assets, liabilities and equity.
A central assumption library for global drivers.
Clean three statement outputs and at least one summary dashboard.
You can then adapt this base to different client types by modifying branches and drivers.
Define your firm standard layout
Before building anything, agree a firm standard for:
P&L structure:
Revenue groupings.
Cost of sales.
Opex buckets.
Balance Sheet layout:
Current vs non current assets.
Current vs non current liabilities.
Equity and retained earnings.
Cashflow layout:
Operating, investing and financing classifications.
Cash Waterfall presentation for advisory discussions.
Document this standard and stick to it across models.
Build a clean base template model
Create a template model called, for example:
Template - Advisory 3 Statement Base.
In this model:
Create a single branch, for example
Entity, under the root.Build variable skeletons for:
Revenue categories (for example core products or services).
COGS or direct cost lines.
Opex lines (for example marketing, rent, professional fees).
Staff (separate variables for major roles or teams).
Tax, assets, liabilities and equity as required.
Set up a small central assumption library containing:
Inflation or escalation rates.
Wage growth.
FX if relevant.
Tax rate.
This template does not need client data yet. It is your starting frame.
Configure three statement outputs
Check that the template produces valid financial statements even with placeholder numbers:
P&L shows all planned categories in the desired order.
Balance Sheet balances and shows cash derived from the Cashflow Statement.
Cashflow Statement and Cash Waterfall behave as expected for simple test values.
Fix any classification or mapping issues at this template stage so they do not repeat across clients.
For reference, see Financial Statement Rules and Cash Waterfall Model related guides.
Add a basic advisory dashboard
In the template, create a simple advisory dashboard with:
Revenue and EBITDA over time.
Cash balance and net debt over time.
A few KPIs such as revenue growth and EBITDA margin (even if populated with placeholder data).
This layout will be cloned with the model and adapted per client.
Turn the template into client specific models
When starting a new advisory engagement:
Clone the template and name it for the client, for example:
Client - XYZ - Advisory Model.
Adjust currency, fiscal year start and period range as needed.
Import client historical data using:
Xero or QuickBooks integration where available, or
PDF or Excel import where the client provides accounts that way.
Replace placeholder variables with client specific series and drivers.
Because the structure is already set, most of the work is mapping and assumption refinement rather than building from scratch.
Use the same pattern as you add branches
If the client has multiple divisions or entities:
Add branches following your standard pattern, for example:
Group.Retail.Wholesale.Online.
Clone relevant variable sets into each branch.
Maintain the same category structure so consolidated outputs stay standard.
The underlying three statement logic does not change as you add complexity.
Keep the template up to date
As you learn from client work:
Improve the template model with better variable design or dashboards.
Add new assumption types to the central library where you see repeating patterns.
Avoid making one off changes in client models that would be better incorporated into the standard template.
Over time, the template becomes a high quality internal asset that makes new engagements faster and safer to deliver.
Troubleshooting
Related guides
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