Financial management software is becoming an increasingly important part of every organisation. It helps companies to manage and understand their business deeper from accounting to project management and strategic planning. When the financial management system malfunctions, the consequences will negatively affect the profitability and the success of the organisation.
"Get software that enables you, not controls you"
So whether you are deciding to adopt a financial management system or already have one, there are three areas you should consider in order to test its efficiency viz. reporting, systems integration, and functionality.
Generating a financial report from scraps of paper or multiple spreadsheets is not fun at all. Why is it such a difficult task to accomplish? Now take a look at your current reporting process, where financial information and transactions are recorded in multiple systems. In the creation process of a report, data from different systems must be gathered then extracted and analysed in a consolidated. These steps are very complicated and can easily cause data entry errors and meaningless information especially if it is being rekeyed into a spreadsheet. Thus, the reports generated manually usually do not provide a clear view of the business performance but rather a mess of confusing information, which is useless for decision-making process as it typically has errors and by the time its produced its too late anyway.
Solution: What you need is a financial software solution which allows you to import and export data quickly and easily. Data can be compiled from a variety of sources/systems and turned into relevant and complete financial information automatically. This activity should be relatively easy and require limited technical support. There are some specific functionalities in a financial software that you should look for:
- Ability to generate quality reports in real time.
- Ability to generate different types of reports on demand.
- Ability to visualise data.
- Ability to offer what-if analyses.
- Ability to adapt to changes in business structure, without changing.
- Ability to gather data from multiple sources automatically.
- Less support required from IT team.
Typically your financial software cannot provide all of the necessary functions for users so they tend to add multiple software applications in order to create their desirable integrated system. However, what they usually lack of is a platform that can integrate multiple systems at once. For instance, some functional applications like accounting or human resources require costly platforms to run and maintain and the problem is that these platforms cannot integrate with each other. Thus, when you maintain them as independent systems, integration must be done by manual entry, which is time-consuming and costly. More importantly, these systems often produce wrong information due to data duplication and fragmentation.
Solution: If you cannot adopt a system that offers a wide range of functions, then you should look for the one that acts as a single platform allowing multiple applications to integrate with each other smoothly. In detail, a financial software that can merge multiple system should be:
- A system that can host different applications/systems in a single platform.
- A system that can integrate data from multiple sources, reduce data duplication and fragmentation.
- A system that is flexible enough to allow no data to be stored outside of it.
- A system that can meet the requirements of a specific industry.
Think about your desirable financial system and what problems you are trying to solve or potential issues you might have to deal with in the future. Most people only seek for the system to address current problems but forget about their long-term needs. Since these financial systems are much cheaper than others, many organisations purchase them, which have very limited modules and functionality. Traditionally, financial software has basic accounting functionality which reduces the amount of information that can be retrieved and processed by users, meaning the attained data could be insufficient, incorrect or fixed. In practice, several companies try to shorten the information input by storing them in sub-systems. As this system is not fully integrated into the main financial systems, it normally causes data fluctuation and duplication.
Solution: There are plenty of software solutions in the market offering a range of modules and functions which can be easily configured to meet different demands. Some specific features of a fully functional financial system are:
- Apart from basic modules such as General Ledger, Accounts Payable, Accounts Receivable and Purchasing, it could have functions like Project or Job Costing, Inventory, Fixed Assets, Payroll, Human Resources, Financial Reporting and Analytics / Business Intelligence.
- The flexibility to adapt to changes in a business model without any impact on the organisational structure, purpose and business model.
When selecting financial software it is highly important to consider the 3 features mentioned above in order to help enhance reporting flexibility and efficiency. The financial software you choose should offer a more complete suite of modules with more extensive functions that your business need, and be able to provide open technology for better integration with other related systems.