Financial forecasting is a critical part of your business; using the software can make it more efficient. Enabling decision makers to make quick decisions based on the information provided.
What is financial forecasting?
Financial forecasting is one of the ways that companies can look at their financial future. But using historical data like cash flow, sales, expenses, revenue, and other monetary data, there is minimal guesswork.
Although there is always room for adjustments based on outside factors and things that might influence the business performance.
A forward-focus mindset is achievable with financial forecasting as it will become part of hiring, budgets, and potential revenue.
What is financial forecasting software?
Its budget decides the real capabilities of a company – it tells which department they can and cannot do, as well as if they can have new members join their team. Your budget should always lie at least one step ahead of your current financial standing.
Financial forecasting software speeds up this process by taking all of the information and compiling it. Running thousands of sums to give you the most precise forecast. It reduces the chance of human error too.
Why should you use financial forecasting software?
No matter how big or small your company is, you’ll get a few critical benefits by switching to software for financial forecasting.
Free up time
The people who deal with the company finances will be spending a large portion of their time looking over data that pertains to forecasting. A reliable financial forecasting software can help to reduce the time spent looking over these figures – and free them up to tackle other tasks within their job role.
There is some risk associated with all parts of your business, but your finance shouldn’t be somewhere that this is allowed or expected. When you have access to a forecast created by software, with no room for error, you will be able to highlight the best places to invest your company money to get the most significant rewards.
Better decision making
You can’t make good decisions based on insufficient data. When software handles the calculations, it can reduce the likelihood of incorrect assumptions by more than 90%.
There is a knock-on effect from the bad financial forecast because decisions will be made based on those figures, and the grasp on realistic finances will spiral out of control.
How can you choose the right financial forecasting software for your company?
The first consideration is who will use the software and how much control they need. Here are the other things to consider when selecting the right financial forecasting software for your company.
What do you need from the software? Do you need to run long-term forecasting, short-term project-specific forecasting – or perhaps a combination of the two? Also, consider how granular you need to have the data; a drill down can be a game-changing tool.
Your interface should be intuitive and customizable – so that no matter who uses the software, they get the most from it. Stakeholders will have a dashboard that shows them what they need, while the CFO will have one for them.
Cloud-based financial forecasting software is more desirable because it allows for hybrid working and remote access, and the dashboards are accessible from any device.
However, the follow-up to that should be software that offers a high level of protection to prevent data leaks and breaches.
Your financial forecasting software should offer on-demand reporting compatible with multiple file types. Within reporting, there should be scheduled reporting, so you know that you have a recurrence pattern to rely on. Some level of editing, user-defined formulas (where required), interactive filtering, easy-to-use drag-and-drop UI, and more.
Siloed software can be a time-consuming nightmare, so when looking for the best financial forecasting software, look for those that integrate with your other software. Integration means importing your historical data and exporting it into your preferred file type is easy.
There should be a minimal difference (if any) between the actual values and the predicted values. Accuracy is of the highest importance when choosing the right financial forecasting software.
Before choosing any software, you must have the opportunity to book a demo and talk to a sales agent. Testing customer service is in the best interest of your company in terms of the service – and what you can expect in the future. And the demo will help you decide if the software is best for you.
Financial forecasting software can significantly impact how your company operates in the future and is an asset to your business.