Financial forecasting helps SaaS companies project future revenue, expenses, and cash flow to guide hiring, investment, and fundraising decisions. In subscription businesses, MRR cohort data and renewal rates make forecasting more precise than in transactional models.

Example: A SaaS company uses a bottom-up financial forecast, modeling new business pipeline, expected churn, expansion revenue from existing customers, and hiring plans to project $8M ARR by year end, with a 12-month cash runway at current burn rate.