Why Financial Management Software Is Important in Business
Financial management is about much more than managing the income and expenses of a business and also controlling cash flow. Financial management is about the proper use of all resources available to the business–from employees through to tangible and intangible assets, supplies, and even time–to help achieve the goals of the business.
An effective financial management system will help business owners:
- manage resources in line with current and future needs of the business,
- identify ways in which you can reduce or recover costs,
- recognise trends in using resources, business performance, and outside influences to make timely decisions affecting relevant aspects of the business,
- develop long-term plans for all sectors of the business.
More noticeably, business financial management software goes beyond profit-and-loss statements, balance sheets, cash flow statements and budgets. Without minimising the importance of these standard accounting reports.
The Downside of Traditional Accounting Systems
Traditional accounting software and systems focus primarily–if not only–on the nuts and bolts of accounting or bookkeeping. They help you take care of basic income and expense management; the double entry system, income statements, balance sheets, and statement of cash flows. And while these are adequate for new, small businesses, they aren’t capable of growing with your business.
Inevitably, as a business matures and the needs for better business management and oversight increase, other systems or software packages are introduced to capture and process new data. However, these rarely integrate with older systems, leaving you with valuable business data that is confined to silos, or needs to be manually captured in other systems before any analysis is possible. This not only hampers decision making within the business, it also increases the risks of mistakes being made capturing or analysing the data.
Why Modern Financial Management Software Is Critical for Modern Businesses
Enterprise resource planning (ERP) accounting software, whether cloud-based or deployed onsite, brings together a multitude of different systems from accounting through to payroll, inventory management, asset management, and more. Although some systems only apply to specific business functions, they all impact the business finances and contribute towards the business achieving its goals. And while you might have similar systems in place already, if they aren’t interacting with each other and updating data across the entire business structure in real-time, you’re not making decisions as fast as you could be.
Modern businesses need to react rapidly to changes in the market and customer behaviour, but to do so sometimes depends on having up-to-date and accurate data on sales and orders. And if your business operates across multiple sites or branches, not having a modern, powerful financial management solution in place puts you at a disadvantage to your competitors.
Move from manually updating multi-branch sales and orders daily, to having all sales and orders update in real-time.
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Why Real-Time Data Is Important
Real-time data is critical to large businesses, but it has also become more important for small and medium-sized enterprises. Some reasons for this include:
- Better inventory management. Whether you manufacture the products you sell or order them from suppliers, real-time updates on stock and raw materials on-hand ensure you can always replenish on time. Never sit with too much stock on-hand and never run out of raw materials that force a slowdown or halt on production.
- Improved customer service. From always being in stock of top selling items, to always having access to the latest pricing matrix, real-time updates allow you to serve customers faster. And real-time updates on sales and orders also allow you to pick up on trends and shifting demands and then adjust your business accordingly.
- Every single decision you make in your business depends on reliable data or information, and with real-time data, you know that your decision making is now influenced by more accurate data. Not what happened in your business last month or even last week, but what has happened today and in the last hour.
Our Tencia business financial management software solution is not only locally developed with Australian businesses in mind, it also gives you accurate, real-time data across multiple sectors of your business. And it does this, and so much more, at a cost affordable to both small and large organisations.
Evaluating a New Financial Management System
All businesses have different needs for financial management, so the top solution for one business might not be the best for your business. What is important for most business is a solution that:
- Can easily accommodate local regulatory requirements, particularly for tax and payroll purposes.
- Allows for simple, unified tracking of sales, expenses, and profits.
- Supports drilling down to the transaction level quickly for a deeper understanding of the business and for managing cash flow.
- Provides access to real-time data across multiple levels of the business, not just financial data.
- Includes tools for better stock management and forecasting, helping to reduce costs and out-of-stock situations.
- Provides access to tools that facilitate better business and sales analysis, enabling better and faster decision making.
- Makes it easier to plan and prepare for short-term and long-term changes in the business and the environment in which it operates.
- Has a local presence, making training and after-sales support easier to access, while also ensuring that changes to local regulations are implemented faster.
However, it isn’t enough to evaluate an alternative solution based on what it is claimed to be capable of; you need to see it in action.
Schedule an on-site demonstration of how Tencia accounting ERP software can boost your business financial management. Arrow Research Corporation has coverage in Melbourne, Sydney, Brisbane, Canberra, Perth and South Australia, and business and technology partners across the country.