What separates good companies from the best? From hiring decisions and developing a great company culture, to product competitiveness and a knack for marketing, almost everything boils down to great decision-making.
Business leaders are required to make hundreds of key decisions throughout the year, and none are more critical to an organisation’s future health and success than monetary ones.
Fortunately, great software has made it easier than ever to collate all the financial data needed to make accurate predictions to support the right decisions into one place – and there are plenty of software options available on the market, too.
But before we look at how software can enhance a company’s financial forecasting, let’s first take a look at what financial forecasting entails.
Financial forecasting combines data from numerous sources and assesses income and expenditure, both historical and projected, to give a clear picture of an organisation’s financial health. It’s a critical process which supports operational planning and gives business leaders oversight and clarity as to any future financial problems or to support investment plans.
The term itself encompasses numerous elements of monetary foresight, including:
The phrase is often interchanged with financial statement projections, though there’s an important distinction between the two.
Whilst financial forecasts are ideal for revealing what is most likely to happen in the future based on historical and anticipated organisational performance, financial statement projections are a more concise model of predicting future performance to highlight working capital requirements.
In general, software makes it easier to run forecasts and supports better decision making. But there are some specific areas where the right financial tech can go above and beyond too.
Here’s a look at some of the core benefits of using software for your financial forecasting.
There’s nothing more frustrating for business leaders and finance professionals than trying to forecast future financial performance from fragmented data or different sources of information.
Finance software is fantastic at collating different areas of a business into one space, from different revenue streams to all your varying cost sources too – including payroll, invoices and taxes.
The quality and value of your forecasts are only as trustworthy as the accuracy of the data supplying them.
Relying on manual processes to predict future performance can lead to miscalculations and omitted data. Instead, finance software ensures that all important aspects are incorporated, right down to the smallest invoices or hidden expenses (those office tea bags start to add up!).
Making the right decisions at speed isonly possible when all the information you need is available 24/7, from wherever you’re located.
Relying on different team leaders providing updated financial forecasts from their own areas of the business is inefficient, and in an increasingly competitive global marketplace, inefficiencies when it comes to decision making can let competitors gain an upper hand.
The best financial software will make it seem as though you’ve hired an extra team of analysts to spend all day prying into the darkest corners of your organisation’s finances!
The increasingly widespread adoption of AI into business software is helping business leaders to make better decisions and identify threats down the line. In fact, great software will alert you to future potential revenue drops based on historic performance, and can assess whether predicted expenditure during that period will outstrip income.
These insights are essential, especially for organisations with streamlined management structures and slimmed down finance departments, and free up more time to focus on making the best possible decisions to support future success.
Knowing how the right software can support with financial forecasting, and help your organisation make better decisions, is one thing. Having the time and internal resources to find and adopt the right software is another.
Business leaders and busy department heads often lack the time to scour the marketplace to find a best-fit solution, both for their immediate and longer-term needs.
That’s where Phase 3 comes in. Our award-winning financial software consultants are specialists in helping businesses just like yours to determine their software requirements, find the best solution, and then onboard that platform into your everyday working practices.
For a pain-free process that will allow you to focus on reaping the benefits of your new financial software, speak to the Phase 3 team about your plans today.
Laura’s role as Head of Marketing sees her continually looking for new opportunities to tell the world how great Phase 3 is.
