The Ideal Business ERP Software for Financial Planning and Analysis

Nov 23, 2021
Nandinee Biswas

We’ll know effective financial planning is the key to greater security for the future. A well-crafted business plan has both immediate and long-term benefits. It ensures that all your revenue and expenses are well-managed so that you do not have to depend on external funds.

A traditional way of financial planning and analysis (FP&A) involves scheduling related tasks and activities such as updating, reviewing, and forecasting budget plans only a few times in a fiscal year. The covid-19 pandemic has disrupted this paradigm.

Now, businesses are always looking for ways to keep their financial data up-to-date in order to mitigate risks. Against this background, modern ERP software for financial planning and analysis has emerged. The system is embedded with artificial intelligence (AI) and machine learning that provide organizations with a gamut of benefits ranging from real-time monitoring to greater compliance.

On that note, let us take a close look at what is financial planning and analysis software on the cloud, its components, and pitfalls that you should be aware of while selecting a solution.

How Does Gartner Defines Cloud Financial Planning and Analysis Solution?

A cloud-based financial planning and analysis solution is designed to support your company’s finance budgeting, planning and forecasting efforts. It does so by modeling, collaboration analytics and performance-reporting capabilities to increase its ability to manage performance, linking corporate strategy and execution.

An ERP software for financial planning and analysis compiles the business data and analytical processes, facilitating your finance teams to access real-time data collected to make more factual and reliable plans to allocate budget and forecast their business strategies.

The advanced FP&A solution supports artificial intelligence, machine learning, and predictive analytics to create an understanding of how well you projected your business performance and measures your success relative to that projection.

What are the Defining Components of Financial Planning and Analysis ERP Solution?

The primary challenge your FP&A team faces is data collection and by relying on spreadsheets, they often end up struggling to keep up with their growing list of responsibilities.

An advanced planning and budgeting ERP system is integrated with appropriate tools to automatically pull accurate and real-time information from a centralized database. This accessibility boosts collaboration and accountability, making it easier for your FP&A professionals to get meaningful output. The less time your finance team spends searching and aggregating data, the better, as they would be able to invest more time in analyzing and creating reports, resulting in swifter planning cycles, more accurate forecasts, and better company-wide and departmental planning for long-term success.

Components of financial planning ERP include:

Financial budgeting and planning

The financial budgeting and planning tool utilizes historical data to estimate expenses for supporting business activities and revenues that would be generated across multiple departments in the future. Because budgeting is done recording and analyzing business data, information authenticity is important. Any mismatch due to human error could drastically affect the process and easily destroy the validity of your budget strategies.

The automated financial planning and analysis system ensures data accuracy to empower you with an error-free budgeting and forecasting process.

Financial planning ERP

Integrated financial planning

This tool combines the financial planning components of all business processes, such as sales, marketing, and workforce, with corporate finance to give you complete confidence in your financials.

Leverage the connected reports to create and manage your operational budgets and attain a more holistic view of your organization’s financial performance. With the latest plans, budgets, and forecasts at your fingertips, you are able to make better business decisions faster.

Financial forecasting and modeling

The tool provides best-practice capabilities, unmatched flexible, and end-user-driven corporate planning and modeling initiatives to quickly build sophisticated plans and models, and create accurate forecasts to improve cash flow over the short and long term.

Management and performance reporting

The easy-to-use performance reporting tool takes management reporting to a new level of inclusion. Its collaboration capabilities and elaborative approach to incorporate and explain operational and financial results transform the traditional accounting statements into more insightful, decision-ready reports.

AI capabilities

The AI-enabled financial planning and analysis tool use predictive analytics and machine learning (ML) to identify data anomalies, patterns, or insights, or the use of chatbots or natural language processing to return data from queries.

Pitfalls to Keep an Eye on and Avoid While Choosing a Financial Planning Solution

A financial planning and analysis solution is meant to support the office of finance’s efforts to manage financial planning, budgeting, modeling, and performance reporting. It is expected to quickly help your business navigate the unexpected economic condition and improve financial decisions and performance.

According to Gartner, “By 2024, 50% of new financial planning and analysis implementations, upgrades and replacements will be sourced from core financials vendors, due to superior integration and product bundling.”

However, not every financial planning and analytics system has similar capabilities. So, while choosing one, you need to avoid getting a software solution with the following issues:

Complex implementation process

Implementing a new financial ERP system is always a hectic task for any company and sometimes needs a huge amount of time.

Higher implementation time means a more expensive process, and it also disturbs the normal functionality of your organization for a longer duration. Therefore, it is important to consider getting a system that requires less time to deploy and would get you faster ROI once implemented.

Inconsistent customer support

We all expect an immediate solution to our software problems. Using the system would be challenging if the solution provider is unavailable to fix user issues, installation errors, and other technical problems immediately after a service or support request is made.

Restricted deployment option

Many financial software providers are limited to on-premise-only adoptions. This limits them to provide on-premise only systems and fails to offer service to their clients when they plan for an upgrade to the cloud or hybrid deployments.

Inadequate product capabilities

Although most of the financial solutions have similar product capabilities, some of them receive lower scores in certain areas, such as integrated financial modeling and complex financial budgeting and planning.

If you have a complex planning need, it is essential for you to carefully understand your requirements and compare them with the system’s current capabilities to ensure you choose a suitable software solution.

Lack scalability and flexibility

The scalability of financial planning and analysis software entails the system’s ability to adapt, change, and grow as your business goes for expansion. When the system does not support this scalability, it needs to be replaced with new software. This makes business bears the additional deployment costs.

Get the Financial ERP System you Need

At Focus Softnet, we offer the best ERP for financial planning and analysis in Singapore. The system is embedded with all essential tools and features to improve the accuracy and efficiency of your finance handling.

Fill in the form to register for a free consultation.

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