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Can your business have its cake and eat it too?
How Target, Actual and Forecast views can change the way you run your business
Decision Consulting | August 2026
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Target, Actual and Forecast walked into a cake shop.
Target pointed to a scrumptious looking chocolate cake with buttercream frosting, berries and shaved chocolate on top priced at $40 and said I want that.
Actual opened the wallet and said I have $20.
Forecast looked at them both and said OK let me quickly work out how to find the balance so we can have the cake.
While Forecast was opening her bag, another voice piped up from behind them. "Hello, how big a piece am I getting?" asked Tax, who had silently joined the group.
Forecast looked up and in a voice that was colder than the cool temperature of the shop replied, “you'll get your piece once we've properly worked this out".
For most businesses this is the reality. These three markers, Target, Actual and Forecast, tell a business owner where they want to go, where they are now and where they are likely to end up.
So, how can a business owner use these three markers to improve the chances of getting the outcome they want?
Target
Remember the New Year resolutions?
Those fabulous plans to eat healthy, get fit, save money...basically end the year in a better place than we started?
Targets are the financial numbers of a business’s plan - essentially the equivalent of those New Year resolutions. They are aspirational and full of good intentions, but like forgotten New Year resolutions, they achieve very little unless progress against them is regularly tracked.
The scrumptious looking chocolate cake with all the bells and whistles that we’d all love to devour.
Actual
This is the reality.
Unlike Target, Actual doesn't care about your intentions. It only reflects what has already happened.
The number that’s showing in the weighing scale, how many push ups you can do, what’s in your bank account today.
From a business’s point of view, this is what is showing in your cashflow statement, P&L and Balance Sheet today. No amount of fabulous plans or resolutions will change this reality if the actions taken so far haven't been aligned to the aspiration.
The $20 in hand.
Forecast
The Google Maps of finance.
It shows where you're likely to end up based on the route you're currently taking and allows you to explore different ways of getting closer to your target.
For this to be really effective, it needs to be updated on a regular basis to measure how its tracking.
Like Google Maps, a forecast becomes more useful when it's updated with current information. If circumstances change, it doesn't judge you for missing the turn. It simply shows you the new route.
How to find the balance $20 to get the cake.
The benefit of using live or current information is that it will give you the best options to course correct if there are unforeseen obstacles in the path. The downside is that it will require more resources – whether it’s funding, or people or time.
As with all decisions regarding resources, it will come down to the opportunity cost. How strongly do you want to have that chocolate cake?
For most growing businesses, with so many competing priorities on their resources, the focus can naturally fall on actuals.
What has already happened, and the actions needed to be taken as a result of it.
How many people are currently employed and the resulting compliance obligations;
What is the profit of the business and the resulting tax obligations;
What is left over after all of that and how much the owners can take home.
Reactive, with limited options to make decisions.
However, having a target and a forecast that tracks progress towards it, changes the landscape. It brings the financial consequences of today's decisions forward, while there is still time to act. Instead of finding out at year end where the business ended up, owners have an opportunity throughout the year to ask: are we still heading where we intended, and if not, what can we change?
So how do you put this into practice?
It doesn't have to start with a sophisticated financial model. Start with the outcome you actually want from the business.
What revenue are you aiming for? What level of profit would represent a good year? How much cash do you want to retain in the business? What do the owners want to take home? Are there investments you want to make, people you want to hire or debt you want to reduce?
That gives Target something more meaningful than simply “grow revenue by 10%”.
Then look at Actual.
Where is the business today? What has revenue actually been? What margins are you achieving? What are your current staffing and operating costs? How much cash is available? What commitments have already been made?
Then Forecast gets to work.
Using what you know today, project forward. Start with the things that really drive your business rather than trying to predict every individual expense perfectly.
For a service business, that might include:
expected client revenue and pipeline
pricing changes
staff numbers and salaries
utilisation or billable capacity
major operating costs
planned investments
loan repayments and other cash commitments
Perfection isn't the goal here. What matters is knowing where the business is likely to end up if nothing changes. The answer to that is often far more useful than people expect. Perhaps Target wants the $40 cake, but Forecast can see that continuing on the current path will only get the group to $30. Now there is a decision to make.
Do we find another $10 by increasing sales? Can pricing change? Is there spending that no longer creates enough value? Do we delay something else? Do we decide the cake isn't worth $40 after all?
That is where forecasting becomes useful. It turns a financial gap into a set of choices.
And this is also where Tax should come back into the conversation.
If the forecast indicates the business is heading towards a stronger profit than expected, the owners can explore their options without waiting for the tax bill to arrive. Knowing earlier gives the owners time to speak with their accountant, understand the likely tax implications and consider the legitimate options available to them before the year has already played out. The accountant still provides the tax advice. The forecast simply gives everyone more time to have the conversation.
How often should you forecast?
There isn't one answer for every business.
A business experiencing rapid growth, tight cashflow or significant change may benefit from updating its forecast frequently. A more stable business may need less. The important thing is that the forecast is updated often enough to influence decisions. A beautifully constructed forecast that is opened once a year is little more than another Target. A simple forecast that is reviewed regularly can be an extremely powerful management tool.
Target tells you where you want to go. Actual tells you where you are. Forecast tells you where you're heading.
Used together, they give a business owner something far more valuable than another financial report.
They give them time.
Time to change pricing.
Time to reconsider a hire.
Time to invest.
Time to speak with the accountant.
Time to change course before an unwanted financial outcome becomes an Actual.
And perhaps, with a little planning, enough time to make sure everyone gets their fair share of that chocolate cake.
About the author
Anushka is the Founder and Principal Consultant of Decision Consulting, a boutique finance advisory practice working with founder-led small and medium service businesses across Australia. With over 18 years of senior finance experience managing large, complex cost portfolios, Anushka helps business owners understand where their profit is really coming from, why cash feels tight, and what their numbers are actually telling them. She is CPA (Australia) and CIMA (UK) qualified.
Enquiries: hello@decisionconsultingau.com
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