As essential as it is, financial management faces critical accounting challenges. Tax cuts keep rising and Job Acts are being implemented, with some channeling negative energy to accounting. Cybercrimes are on the rise as so many people are jobless today and this questions the limited skills owned by accountants. Additionally, technology brings about many changes that the accountants need to keep abreast with to offer quality client service, but sadly, sometimes their skills prove to be limited.
These and some other challenges necessitate the need to engage a financial software development company for its financial management services. This article details how financial management software can be used to overcome critical accounting challenges.
Financial Management Software For Financial Planning
Regardless of your company’s size, the scope of operation, or financial horizon, financial planning is a must-to-do. Some of the top companies that have taken financial planning to the rear seat have regretted it because of the timelessness of data, decentralized decision-making, and illegitimate data sources. The installation of financial management software is a game-changer. With financial software such as Acumatica, you will have financial reports and personalized dashboards availed through a shared centralized database.
This provides a single version of the truth and maximizes accuracy. Financial software also uses artificial intelligence which ensures that data is gathered and stored instantly and electronically, ensuring real-time information. Automation has also been adopted for repetitive financial activities such as approving limits, reconciling bank transactions, and financial managerial data reporting. With such service automation, the workflow is pretty smooth.
Adapt Cloud-Based Storage For Your Data
Looking for a manual from a heap of files isn’t an easy task; neither is looking for a file whose name you don’t remember from a computer. Worse off, sometimes the system completely log jams or slows down because the file it tried to import or export was so large that it could not accommodate it. This is one of the critical accounting problems that can be solved through the use of financial management software.
Cloud-based storage is a new technique that financial management software connects with to allow the largest files characteristic of accounting to be securely stored, imported, or exported. This storage also allows the accountants to personalize dashboards and task lists to meet needs. Additionally, the software provides customized search filters that help you sort data from a single screen and improve your organization skills. Because they are efficiently designed to meet needs, the software handles even the largest files without a log jam.
Embrace KPIs Reporting
Without proper Key Performance Indicators (KPIs) in place, a financial system can crash down due to severe losses incurred or lucrative opportunities that were missed. This is worse when those KPIs neither exist nor are being reported. Financial management software creates KPIs and uses them to report the financial unit’s performance.
Critical decisions such as operating cash flow, working capital, and share distribution require fine-tuned data that the standard required reports may not provide. With software like Quickbooks, special reports tailored to the institution’s structure are generated. Irrespective of the divisions, subsidiaries, products, and services in place, financial management software generates special reports which improve the organization’s analytical abilities and aid in decision-making.
Try out An Enterprise Resource Planning (ERP) tool to project cash flow
One of the most terrible nightmares accountants have is cash flow projection. What makes this nightmare scarier is the fact that the market’s volatility determines the sales and so the cash flow is completely unpredictable. Demand, supply, and competition in the market keep shifting uncontrollably. Disruptions such as what the pandemic has brought in also will keep featuring.
What’s the point? As a financial unit, you need the help of a financial software development company now than ever before. Such an agency will use an ERP to couple finance identities with business intelligence tools and take your financial management to the next horizon. Predicting your business’s future is made easier with customer & vendor management, billing tools, and customized reporting. Consequently, you no longer have your bag in your eyes because the cash flow projection nightmare is gone!
Employ financial management software to keep abreast with security and compliance
In the list of accounting’s critical challenges, are security and compliance issues. The pandemic has led to the loss of jobs by millions of people who now turn to vices like cybercrime. Clients’ data can be easily exposed, leading to major losses to the financial unit. Compliance is also an issue since the policies of a nation may just change abruptly.
If the company does not comply with the new standards, hefty fines can be imposed on them, thus predisposing the business to losses. Worry not, financial management software is the answer to all this. Kissflow Finance & Ops Cloud are examples of financial software that securely stores your data in the cloud. The data is encrypted with keys end-to-end to limit access only by those with the right decryption keys. ERP can be used for compliance because of the ASC 606 revenue recognition standard that keeps the financial team on its toes with new compliance policies.
Embrace Inter-Company accounting features
Change is inevitable and growth is adorable. As your financial system grows, silos and subsidiaries arise. Although they run independently, there is a need for a channel that connects them to the parent unit. This creates a challenge in accounting- how can the independent sub-companies be joined to the parent company? The inter-company accounting tool then becomes critical and its lack subjects the unit to errors and inefficiencies that jeopardize the financial management.
Through the application of financial management software like Zoho Finance Plus, functions that reconcile the subsidiaries’ statements to the parent body are provided. Such functions include Field Service, Distribution Management, Financial management, and Project Accounting. These features provide real-time updates and make the system more efficient and effective.
Financial management is a necessity for our Technology operations yet it faces many critical challenges that put its operations at risk. Cash flow projection is difficult due to market dynamicity, cybercrimes are on the rise, compliance is an issue with the ever-changing financial policies, subsidiaries grow and present a reconciliation challenges with the parent body, and operations and major decisions require more sophisticated reports.
To manage these challenges, the application of financial software is vital. The article discussed some of the ways financial management software can be used to overcome critical accounting challenges.