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Por Nicolás Rielo

Gestión de Servicios en TI y Divulgador de IT & Finance

Even if you have never considered it, a huge percentage of the growth of any organization is anchored to the use of efficient and competent financial planning software. This type of program has an essential virtue: it allows management to generate intelligence on the economic health of the company and correct deviations quickly and easily.

According to the prestigious consulting firm Accenture, in the short term (less than 5 years) 80% of internal and external financial services in organizations will be “delivered by integrated multifunctional management software.”

We know that for a better strategic decision-making process it is essential to have complete, real and reliable information about the day-to-day business. This is, without a doubt, another of the facilities that hiring a financial management software would provide us over continuing with our excels or partial management systems.

It is that, whether we are talking about a start up or a small and medium-sized company, it is necessary to periodically place on a table the accounting, tax, financial information of the last weeks or days. And, consequently, carefully analyze what we are placing our capital in, the sales outlook, macroeconomic estimates, context, and everything that appears on the radar of our finances.

According to a BlueDraft study carried out in 2019, 78% of SMEs in LATAM consider the digital transformation of finance as “an achievable dream”, but only 15% declare that they have already achieved their objectives related to this. What stage is your organization in?

Advantages of using financial analysis software

Financial analysis, as we know, is the systematic and in-depth review of this type of information through indicators and techniques that help us to know the current degree of profitability of the business, as well as its projection over time. Relying on financial analysis software for this management gives us several advantages:

  • It helps us to have centralized financial management.

We can have the company’s finances under control just by accessing a single platform and not through various systems (such as an ERP, a CRM, the wonderful and eternal spreadsheets in Excel, soldiers of a thousand battles of all SMEs, etc).

In this sense, according to our same study cited above, 64% of small and medium-sized companies in Latin America continue to base their financial management mainly on the use of Excel.

  • We grow in speed and efficiency.

The high degree of maturity that financial analysis software has today allows us as a Finance area to carry out administration tasks faster, with fewer human errors, with better communication and with greater efficiency (more productivity in less time with the same quality of work).

In addition, competent financial management software allows us to automate tasks. In Finance and Accounting (especially) there is a huge number of repetitive tasks where the human hand does not add value and is wasted.

Does repetitive tasks sound familiar to you? Surely there are many in your organization and you keep awake to automate them! Well, a management system for corporate finance accompanies us in the process of automating accounting and financial tasks, resulting in a large amount of staff time available for better value tasks.

  • Provide scalability to your financial operation.

What do we mean? Let’s think about this: your business may be fine the way it is. With your Excel sheets you carry out the operations of your business. Now, have you thought about what will happen with this model when sales triple and you have to increase the staff of the financial team? What if the market does not give you the time to adjust internal processes and regulations to make this leap?

Worse still, how do you change the culture of the organization to a new model overnight if it is based on Excel or industry software systems that interact with each other through human communication? As you can see, using financial analysis software, scalability occurs naturally and quickly: in any case, you will have to acquire a few more licenses and rethink operational issues.

  • Improve the quality of your presentations.

Financial analysis software makes it easy to generate reports and graphs with aesthetics and functionality that are superior to what Excel can give you. You will be able to present reports and projections in a simple and easy-to-read way for a non-expert audience on all economic and financial aspects, from payments to suppliers and collection of invoices to payroll or tax issues.

Without a doubt, a software program with these characteristics is a fundamental tool when it comes to diagnosing the status of a company. It is the perfect support staff for the execution of the Deming circle in the finances of your business, be it a start-up or a company with more than 100 employees.

Characteristics of a financial analysis software

In general, the term “financial analysis software” is used to designate a software that brings together all the procedures within an organization related to financial, economic and accounting or management aspects. In other words, it is a type of application that transcends the functionalities of an ERP, a CRM or a simple billing and stock system.

Among other issues, and unlike an ERP, CRM, or BI, a financial analysis software will help us with:

  • Facilitate the diagnosis of the economic situation of the business, by allowing us to know the reality of the company’s financial status through data analysis. Any of these systems should provide us with access to on-demand reports on balances. These must consider all items: assets, liabilities, debts, capital, OPEX, CAPEX, investments, sales, etc.
  • Manage access to information by area. An ideal software should help us obtain information through area filters. For example, so that we can know the financial performance of the Human Resources and Marketing area together with their managers.
  • Provide support to audit processes. The use of software greatly speeds up the audit processes. The digital transformation has changed these tasks forever, allowing today to carry out audits of all kinds of working capital, debt assessment or leverage, in an agile, fast and, above all, safe way.
  • Stimulate intelligence in decision making. The last point, but not the least important: mature decisions made on data analysis and using the scientific method are knowingly more effective than decisions based on intuition and bias. To be able to make decisions in this way, with empirical evidence in hand, we must make use of reliable information and quick and simple retrieval. A good financial analysis software provides us with all these features.

The Plika solution: ideal for increasing the value of your company’s finance area within the organization

On the other hand, the instrumentation of a financial analysis software in the management of a business mainly favorably affects three fundamental topics:

  • improves risk management, especially if it allows us to perform predictive analysis,
  • stimulates growth hand in hand with innovation, since making business decisions based on information allows us to design new strategies and evaluate possible fictitious scenarios (What If simulation),
  • it increases our profitability, since we can detect unnecessary expenses, improve the profitability of the investments to be made, etc.

At this point, we want to invite you to get to know Plika’s Financial Planning and Analysis solution, which offers you all these functionalities in a Software as a Service that adjusts to the needs of your business through its starter, growth and enterprise.

Using the Plika solution, you can obtain all the company’s real-time information such as balance sheets, income statements, cash flow analysis at any time of the month. Additionally, you can set alerts to be notified in eventual scenarios (desired and unwanted).

With a strong commitment to automation, you will be able to replace repetitive tasks carried out by company personnel in financial and accounting aspects with digital tools that will do the same job faster, more efficiently and ruling out human error.

Plika’s FP&A software adjusts to the requirements of your company: it is so versatile that it can be customized to be used in startups, small and medium or large companies.

We invite you to learn more about the solution through our YouTube channel or through this same site. Of course you can contact us without obligation or cost to answer any questions about the product or price.

Final notes

In this blog post we have reviewed a little about what financial analysis software does, what are the advantages of using it and how an FP&A solution can more than satisfy this demand.

Another widely used alternative in this exercise is the use of Excel, which can play this role for a time in your company and even be complementary. However, the functionalities of FP&A software are clearly superior.

A recent study on the North American market showed that already more than 50% of firms between 5 and 250 employees in the United States use a specific computer system for planning and budgeting.

As your company grows, it is advisable to evaluate the implementation of a complete financial analysis software. It is an investment that will return benefits to you promptly and, what is better, you will see them concretely.

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