Financial forecasting is a dynamics process that requires revisiting quarterly or at least every time a major event takes place. That said many businesses are still forecasting using Excel spreadsheets which makes it harder for them to react fast enough when something unaccounted for happens.
For most organizations wanting to improve their current forecasting process, they are quick to realize that the hunt for financial forecasting software is not an easy one.
There are hundreds of financial forecasting solutions in the market out there claiming to offer the sun and the moon for organizations. The reality is that not all budgeting and planning solutions are created equal. Some are just honestly better than others. What they say about the more expensive a software is, the better the quality is unfortunately not true when it comes to accounting platforms.
So when it comes to evaluating a financial forecasting software for your organization, here are 5 features that you should look for. These features outlined below will get you closer to having realistic forecasts or plans.
- Pre-designed templates
- The financial forecasting software you should purchase must offer pre-designed templates – cash flow template, income statement template, balance sheet template among other things.
Having these templates ready makes it easier and quicker to generate reports and read through them. These reports will then be useful in your forecasting.
- Automated P&L, Balance sheet, Cash flow reporting
- Forecasting your company´s cash flow statement is possible if you can accurately forecast your balance sheet. This means that for you to have realistic figures, you need an accounting system that will automatically generate these statements for you.
Performance Canvas Financials is cloud-based and is a complete FP&A software that can provide you with automated P&L, balance sheet, and cash flow for every budget period using your preferred method – direct or indirect.
Using a financial forecasting solution like Performance Canvas Financials will ensure you do not need to worry about calculating account balances since Performance Canvas Financials makes automatic journal postings.
- What if Scenario & Assumptions testing
- As you might know, there are 3 scenarios you should always plan for. Regular scenario, best scenario, and worst scenario. It is a good idea to always do what if analysis and to track your assumptions for each scenario so you will have full context for the changes in certain numbers. Your new financial forecasting software must allow you to adjust your assumptions easily and allow you to make changes quickly as the need arises.
- Automated Journal Entries
- Without this feature, it is almost impossible to calculate balance sheet account balances at each budget period accurately and comprehensively.
- Manual Entries into Future Periods
- Whatever financial forecasting platform you choose, make sure you can do manual entries into future budget periods because this is useful in forecasting needs, loans or retirement of existing debts.
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