6 fundamental features to look for in an FP&A software
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For decades, financial reports have relied heavily on Excel spreadsheets and templates. However, the modern era has transformed the way Finance teams operate, starting with how they now approach financial planning and analysis. Read on to learn more about the tools you can consider using to set up your business for success.
The need for an analytical solution arose long ago when companies began using large amounts of information to manage their businesses.
Over the past few years, the biggest challenge facing organizations have involved managing, processing, analyzing, and reporting vast quantities of data. Spreadsheet solutions became less efficient and effective as data volume and complexity increased, which led to the emergence of FP&A software.
When it comes to financial management, FP&A software is considered the backbone of many organizations. This is a tool that allows finance leaders to perform various types of analysis and calculations and derive real-time actionable insights from their company’s key performance indicators.
There are several reasons why FP&A software is essential. First, it helps businesses plan their strategies based on historical data and implement them correctly. Second, it provides valuable information that enables executives to spot problems early on and make smarter, more strategic decisions. Finally, it helps organizations identify opportunities, develop new projects, and create financial models and reports to measure business performance against targets.
FP&A software is not only a powerful tool for financial managers but also a great asset for every business team member. It gives everyone involved in the decision-making process the opportunity to analyze and interpret data to make better-informed business decisions.
Some of the competitive advantages of using FP&A software include:
Spreadsheet software was once the only option available for businesses looking to manage their finances. However, thanks to advances in technology, there are now many different types of financial management tools offered on the market; each providing unique features and functionalities for greater visibility into critical data.
While older legacy systems offered limited functionality, modern tools provide comprehensive reporting and financial analysis capabilities. Now all you need to decide on is if you want to manually run reports or utilize a tool that lets you automate these repetitive processes.
Understanding the FP&A software’s historical evolution may be necessary before choosing the option that best fits your business. Thus, to help you make your decision, the following are some important factors to consider (FP&A Market Guide):
The first generation of financial planning and analysis (FP&A) software was primarily used by a small number of business leaders because it was difficult to understand, adopt, and implement, taking an average of more than 6 months from start to finish, and requiring a significant upfront investment in hardware costs.
Additionally, this generation of FP&A tools frequently used heavyweight on-premise systems, which only very larger companies could afford to add to their tech stack because their TCO may exceed $1M in the first year.
The second generation introduced cloud-based FP&A solution options that offered improved scalability, better application integration, and were more user-friendly than previous versions.
These were far more affordable, which made it simpler for mid-market players to access. However, even though they were easier to implement than those of the past generation, they still required a high level of technical competence, therefore only a select group of key FP&A professionals chose to use them.
Furthermore, while they were less expensive than first-generation software, their TCO remained significant, ranging from $25K to $100K annually.
Modern FP&A software solutions are offered as a service, making them more cost-effective for companies of all sizes, with a TCO of $15K to $25K and an initial implementation cost of $10K or less.
Today’s solutions, which provide a user-centric approach with self-service features, ensure the fastest implementation times. They enable business planning, modeling, and reporting at the board level, and offer native ERP integrations, a quick return on investment, and cutting-edge capabilities like dashboards, analytics, collaborations, and automation to run a business.
Moreover, the single source of truth offered by this type of software aids organizations in resolving spreadsheet issues once and for all.
The financial services industry is undergoing a major transformation, driven by new technologies, regulatory changes, and an evolving customer base. The result: A need for greater sophistication in the way companies manage their finances.
If you are looking for a new-gen solution to meet today’s evolving challenges and manage all Finance from startup to growth, Abacum is here to help. Our advanced FP&A software enables finance professionals to build a fully integrated solution that includes accounting, budgeting, financial forecasting, reporting, and collaboration across all business departments.
Real-time monitoring, automated procedures, and predictive insights are used by our customers to increase operational efficiency and gain visibility into their daily activities.
Find out how Abacum solution can help your business make better strategic decisions faster and position the entire company for success.
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