Financial Reporting Software
Financial Reporting Software Buyers Guide
Last updated: March 29, 2023
Finding a Financial Reporting Software Package for Your Business—Important Tips
You can have the most innovative idea for a business, but if you don’t manage your financial aspect correctly your company won’t last long in today’s competitive world.
An effective way to manage this challenge is continuously keeping an eye on all aspects of the business related to finances. This ranges from day to day expenses to more complex issues like tax and compliance. You also need to know if you’re getting returns on investments and don’t forget to monitor productivity in different departments. How else will you know which business decisions are the best at a certain time?
Doing all of this manually is unnecessary now that software can do much of it on your behalf. Get the bird’s eye view that helps you stay in control. That’s the purpose of financial reporting software.
The Reports You Need—Does Your Software Provide This?
Much of the value of a financial reporting software package lies in the data it can provide you with—the financial reports that will show you the figures you’ll base your business decisions on.
Getting a balance sheet is non-negotiable and showing your cash flow statements & profit and loss reports should always be included in your options. While it’s not vital for all businesses and industries, you can also ask vendors about the following reports:
- Expense reporting: This may not be relevant if you don’t have employees who travel on your company’s behalf.
- Asset depreciation: A new startup or e-commerce store may not require this, although it may be necessary when you’ve grown your assets.
- Accounts aging: A cash-only business may find this irrelevant.
The intricacies of your accounting system will determine the number and types of reports you require to make informed decisions.
How to Identify the Most Suitable Option for Your Business
The above facts are relevant to most businesses, but you can still narrow it down to the ideal software package for you by considering this:
- Tax laws that apply to you: Some industries must adhere to certain tax laws and even your reporting may have to comply with certain standards. Will your new software suffice in helping you manage this?
- Your industry: As mentioned above, your type of activities will determine which functions you need in your software. If you receive donations as a charity, can your software help you reflect the receipt and spending of this money? Also, don’t pay for tools you may never use; and don’t settle on a cheap product that’s irrelevant to your niche, without the freedom to customize it.
- Your preferred deployment: You’ll find software that can be accessed on the cloud and others will be on-premise. A cloud-based system is usually more accessible which makes it easy for users to work on it, even if they’re not on site. The different costs of these systems are often the reason why one is preferred above the other.
- Security: Keeping financial data secure is essential. Make sure the setup keeps your own and clients’ details safe. Contrary to common belief a cloud-based system is often more secure than an on-premise version.
- Business size: Your new software should suit the size of your business and small companies may not need as many features as large corporations. For a startup, it would be a waste of money to purchase an elaborate program. Just remember that your company may grow so look into options that offer you a bit more than you need at this very moment; perhaps you’ll need those features in a few years. Can you upgrade to a more intricate system, or will you have to purchase an entirely new system? Small businesses can also consider financial reporting software as part of other suites, instead of buying a stand-alone system. These suites can help with various aspects of the business and you’re ensured that the different sections are integrated. A bigger company may need a package specifically designed for its industry or activities, which may only be available as a stand-alone product. Also consider financial management systems which may have a financial reporting sub-section that matches your needs, especially if you’re shopping on behalf of a larger corporation.
Important Features in Modern Financial Reporting Software
Now, what will help you draw the necessary reports in a fast and user-friendly manner? The value of financial reporting software is that they can incorporate these features:
- User-friendly layouts should preferably be customizable for each user.
- You must be able to export your data as CSV files and even PDFs, so the data can easily be shared, reviewed, and utilized for decision making.
- Your new software must integrate with other relevant packages, such as payroll.
- Financial reporting is used by many role players so registering multiple users is a prerequisite
- The software must support the fields you require and allow a user to track the type of information that’s important to his or her role & decision-making responsibilities.
- A user-friendly experience such as using drag and drop tools ensures the learning curve will be short.
How to Budget for Your New Software
As you can see there are many factors to consider when determining which software will suit you best. The cost is inevitably a huge role player, but always consider this while keeping the other important features in mind. If you don’t pick a practical solution it won’t be value for money.
Luckily you have many different options in this software niche. You can opt for monthly premiums as low as $7/month/user while others can require up to $400/month/user, as you’ll see with Sage Inacct.
Flat rates of $49/month can apply but they can also go up to $1000/month.
Good news: free software is also available if you want to determine what your company needs before you pick a paid-for package.
Financial reporting software has the power to make or break your business. That’s why it’s one of the most popular types of software for modern business. And now you know how to identify the ideal product to help you stay one step ahead of the competition.
If you have advice for someone else trying to make wise business decisions, leave a comment below.