ENTERPRISE PERFORMANCE MANAGEMENT SYSTEMS
10 Key characteristics to evaluating Budgeting software
Mid-size businesses have the same financial performance control and measurement needs as large corporations. However, they don’t have the time, or the money, to make a mistake in selecting a budgeting solution. CFOs of mid-size firms can make the most informed choice by looking for the following key characteristics as they evaluate budgeting solutions.
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Key characteristics:
- Implementation and ease of use Business and financial logic are built into clear data-entry screens, (not spreadsheets), so line managers enter data from everyday operations, and the system - relying on rules and parameters - takes this data and all data from every part of the business and creates Budgets, Forecasts, financial statements, and standard and custom reports.
- Data gap closes With every user’s data tied into the same relational database, everyone sees the same financial data, or whatever portion of the data they need to see - from operational details all the way up to consolidated financial roll-ups. Finance leadership and the C-suite have comprehensive information from every corner of the operation, updated in real time without manual collection and consolidation.
- Reporting takes centre stage The solution immediately turns data into intelligence through a comprehensive and easy-to-use report-generation capability. With no programming required, users produce desired reports at any level of detail.
- Collaboration flourishes There’s more collaboration between Operations and Finance. There’s also more collaboration top-to-bottom. Importing Actual results allows continuous comparisons to Plan - bridging the gap between the Strategic and Operational Plans. With all stakeholders viewing the same numbers, there is less chance of a cultural divide.
- Low-hanging fruit appears Since the numbers are real, and since they relate to each other across the organisation as well as top-down, it’s easy for managers to see where the greatest opportunities exist. Questions suddenly have answers. Who are the most profitable customers? Who are the most efficient managers?
- Reactive turns to proactive You don’t have to wait until Budget season to know whether you can afford something. You can move more quickly when opportunity strikes. Forecasts are no longer set in stone. When conditions change, Budgets can be quickly updated to reflect the new reality and guide a new action plan.
- P&L, Balance Sheet, and Cash Flow are available The P&L is a short-term look at what happened last month or last quarter. The Balance Sheet is an indicator of the underlying strength of the business. Cash flow tracks ability to cover expenses. All three reports are critical, and are easily available without programming, batch processing, or waiting.
- IT remains free for other priorities A limited software infrastructure means the Finance team can implement the solution with little IT support. Non-technical users can import data from other sources, create financial models and make changes, create statements, and run management reports.
- Existing account structure remains valid There’s no need to modify the chart of accounts because the solution can work with the current account structure directly. There is no need to truncate account names, condense accounts into fewer levels, or perform tricks to make the business fit the tool.
- Tool scales to the work The solution keeps pace with the company in both size and cost - it’s completely scalable, easily handling rapid growth or business contraction.
Such Budgeting solutions do exist, and choosing the right tool will enable a CFO to spend more of his/her time on the area of greatest concern - making informed business decisions based on reliable data.
Selecting the right solution will ensure that it is more reliable than spreadsheets, and more versatile than typical Budget point solutions or Accounting packages. In addition, it will offer out-of-the-box synchronised Balance Sheet, Income Statement, and Cash Flow reporting that update automatically based on Actuals or what-if scenarios.