How Financial Management Solutions Can Benefit Your Company
Financial management solutions provide comprehensive capabilities designed to dramatically improve all aspects of financial planning, management, control, and analysis. Financial management solutions streamline and automate all finance and accounting-related processes and activities including budget creation, allocation, and management; cash flow analysis; accounts payable and receivable; management of capital equipment and other assets; performance management; and financial reporting. It also helps improve the accessibility, accuracy, and timeliness of critical financial data.
Many financial management solutions also are also designed to facilitate compliance with Sarbanes-Oxley, BASEL II, and other financial regulations by providing complete audit trails and rules-based financial controls. Many of them enable financial planners to simulate potential scenarios, such as acquisitions, so they can better predict how certain major decisions will impact the company’s financial position.
Key Benefits for Your Company
With financial management solutions in place, a business can transform its financial operations from an administrative back-office function to a strategic asset by:
- Increasing accounts receivables and maximizing cash flow
- Identifying and understanding the factors that positively and negatively impact performance, profitability, and growth
- Speeding up closing cycles by automating all associated workflows and related report generation
- Reducing the time required for budgeting and planning.
- Minimizing risk by ensuring the accuracy of all internal and external financial reports and documents
- Implementing formal internal controls to facilitate compliance and improve corporate governance
- Leveraging more effective financial analysis to enhance strategic decision-making
- Enhancing performance management by measuring results versus objectives
Does My Company Need Financial Management Solutions?
The following questions can help a company determine if financial management solutions are right for them:
- Do you lack discipline and structure in your corporate financial processes and policies?
- Do you get conflicting financial information from various business units across your company?
- Is it difficult to consolidate and validate financial data for reporting purposes?
- Do any departments within your company practice renegade spending or fail to adhere to budget guidelines?
- Is forecasting a challenge?
- Do you have trouble monitoring the value of real estate, intellectual property, and other hard-to track assets?
If the answer to any of these questions is “yes”, then your company should strongly consider financial management solutions.
Common Features of Financial Management Solutions
Financial management solutions provide comprehensive capabilities designed to dramatically improve all aspects of financial planning, management, control, and analysis. While the modules and sub-modules will vary greatly from vendor to vendor, all offer the following features in some form:
- General ledger to provide in-depth visibility and greater control over accounts receivables, accounts payable, payroll expenses, orders, and other standard financial transactions. Financial staff can also conduct quick, thorough consolidations, combining multiple ledgers from separate business units into a single financial statement.
- Controlling and budgeting tools that allow for more accurate internal and time accounting, cost accounting, product costing (i.e. cost of goods sold analysis), and enterprise and departmental budget creation and management.
- Cash Management to help assess and predict cash requirements, conduct reconciliations, and process and execute transactions that directly impact cash flow.
- Forecasting to help accurately anticipate future profits or losses, revenues, cash flows, and other important financial factors.
- Fixed asset management to enable more efficient asset portfolio management by simplifying the evaluation, acquisition, operation, maintenance, and valuation of fixed capital.
What to Look for When Choosing Financial Management Solutions
Because most companies today, even small and mid-sized ones, operate on a global scale, be sure to look for a solution that has in-depth support for international transactions, such as multi-currency and multi-lingual capabilities.
Additionally, a solution should support not only financial management, but financial strategy as well. Choose a vendor who offers comprehensive and intelligent “what-if” analysis functionality, so multiple business scenarios and conditions can be analyzed before critical strategic decisions are made. Given the sensitive nature of financial data, take a good, hard look at the security provided by each solution. This is particularly important for Web-based environments.
But most importantly, be sure to thoroughly assess the solution’s deploy-ability and usability. Since financial processes cannot be disrupted, even for a short period of time, financial management solutions must offer rapid implementation and minimal training, so users can get up and running as quickly as possible.