Recently, the adoption of modernized advanced financial technologies, including big data analytics, accounting automation, AI-powered solutions, etc., have sped up. It has helped organizations to reduce costs, optimally utilize resources, increase efficiency, improve decision-making, financial risk management, and more. The quick adoption of financial technologies has prompted the growth of financial management software and solutions. In 2020, the global financial technologies market size was valued at $110.57 billion (about $340 per person in the US). Furthermore, it is expected to reach $698.48 billion (about $2,100 per person in the US) by 2030, growing at a CAGR of 20.3% from 2021 to 2030. The trends in financial technology adoption during the above period will combine APIs, artificial intelligence, blockchain, RPA, data analytics, and more. However, data analytics is expected to lead the financial technologies market in the coming years. The competitive landscape in the market has also increased and gotten more intense, making it challenging for organizations to choose financial software that can help them ace their financial management processes. Today, we explore the many factors you must consider before spending a part of your company’s finances on financial software.
Top 5 factors to consider while choosing financial software
The factors listed below will help you pick the ideal financial software, regardless of whether you are purchasing it for the first time or switching from your current unsatisfactory software.
1. Determine the problems or reasons
One of the biggest and most critical errors you can make while hunting for financial software is jumping right into researching potential software and interaction with solution providers for your business, without stakeholders agreeing on the reasons and problems you want it to solve. The best approach you should take before you begin looking for financial software is to internally look for and have active discussions regarding the nature of assistance your business needs. Furthermore, understand the problem, who it affects, how it affects different business processes, and how it can be resolved. You can answer the following questions to get a clear picture of the problem-solution:
- How long does the problem last?
- How many people are involved?
- What’s causing the problem?
- Is there a process to resolve the issue?
- How long does it take to resolve it?
- How are different areas of your business affected?
Budgeting is one of the most common problems facing common problems, particularly with small and medium scale businesses, where there’s a lack of human and financial resources.
2. Identify your requirements
Once you have completed the above step, and everyone has identified and agreed upon the common problems and their specifics, it’s time to map your journey towards financial software requirements. You should ask different departments more specific questions, including how to solve a particular problem, how fast it needs to be resolved, how different areas are impacted, and more. Talking to your teams will help you understand what the new financial software must do and how it must function to make its incorporation and implementation successful and worth the investment. Consider an example of budget-related issues in your company. You can ask the questions listed below:
- How will the new financial software change or improve the process?
- Which aspects of the process should you automate?
- Who will use the software and how should they do it?
- What other data sources and systems can the new software be integrated with?
- When will the results from the software be considered successful?
- Which features are a must-have, and which are luxuries?
When you have answers to the above questions, you will have a better understanding of the requirements of financial software.
3. Research potential financial software
Coming to the third step, you are ready to research the market for potential financial software. We have listed some of the tried-and-tested ways to ensure you are looking at available software at a broader level and not just one that you believe might be a good fit for your business requirements:
- Conduct thorough online and offline research to get familiar with the latest trends, developments, functionalities, and more.
- Download analyst reports on the types of financial software you are evaluating and analyst ratings of software in the category you are researching.
- Draw on your own experience and get up-to-date information on the solution provider you have worked with in the past.
- Reach out to your colleagues in your company to get their recommendations and opinions.
- Research your competitors and find out which financial software they are using.
- Visit the websites of the solution providers on your list, know their software better, read reviews and testimonials, read their white papers, reports, case studies, and more.
As you research different financial software, solution providers, and software packages, you can begin by keeping track of the ones which seem like the best potential fit to meet your business requirements versus ones that don’t. At this stage, you should also begin researching into implementation partners. While most enterprise-level businesses have an IT department that can help them with software setup, implementation, incorporation, and deployment, a software partner can help in optimizing the configuration. Furthermore, software implementation partners can reduce project risk, streamline the deployment process, accelerate the timeline for getting the software running, and generate maximum business value.
4. Finalize your budget
When all’s done, it is time to re-visit your budget and finalize it. You should take a considerable amount of time in re-confirming the budget before you can spend it on the purchase of the financial software. Some software are particularly designed for enterprise-level businesses, requiring every functionality you can think of. Furthermore, these software packages are priced accordingly and may be out of reach for your company’s budget. More importantly, you should also factor in the total cost of ownership (TCO) at this stage. The total cost you will have to pay to see the financial software successfully implemented, and not just the initial cost of purchase. You will have to pay for the purchase of a license for software or subscription to a cloud-based service. Furthermore, the total cost of ownership will also include the cost to effectively use the financial software and offer continuous support, can include training, integration with other software, management of the solution and purchasing implementing future product upgrades, and more.
5. Make the final decision
By now, you have invested a significant amount of time in identifying the problems you are trying to solve, defining your business requirements, reconfirming your budget, and evaluating potential software and vendors. Now, you can list the top financial software choices and vendors that you believe would be a good match for your company. With a list in hand, you can start reaching out to the sales team of potential vendors. It would help you further move towards your goal of acquiring the most ideal software. You should not shy away from talking about the price of the software and how much you are prepared to spend. If you don’t discuss the pricing plans, you would only be wasting your time with a software provider whose pricing is nowhere near your budget. Request the sales team of potential vendors to schedule demo sessions. It would be for the top five to ten financial software options, which come with must-have requirements for your business. You should also consider whether it is easy to use the software and determine the type of training level your employees would require to operate it at its maximum capacity. If the software is difficult to use, it might hamper user adoption and efficiency, regardless of whether it meets the business requirements. The software wouldn’t deliver the desired results if it cannot be operated effectively. Lastly, you should consider all the selection criteria for your new financial software and choose the one that fits your company’s budget and matches your business requirements.
What are the different types of financial software?
Listed below are the primary types of financial software a business can incorporate to achieve financial efficiency:
Billing and payment software
No business, regardless of size and industry, can operate without billing and payment software. All businesses have customers and suppliers. Thus, receiving and making payments are inevitable aspects of all businesses. The billing and payment software takes care of most manual and repetitive tasks, speeding up the process, eliminating the chances of human errors, managing online payments, and more. Furthermore, it also enhances financial management by generating various automated reports, offering insights into the overall financial performance, and more.
Expense management software
As the name suggests, the software manages all expenses of a company. You also get access to detailed expenses reports. You can also automate money transfers, identify cost-saving opportunities for different departments, get access to and control of financial data in real-time, integrate expense reviewing parameters, and more.
Investment software
With crucial market data and predictions, the investment software helps you make more informed investment decisions for your business.
Financial planning software
The software makes the process of financial planning less challenging and more seamless. With the financial planning software, you can better plan allocation of resources and improve your sales strategies.
Insurance software
Insurance companies have revolutionized how customers browse insurance plans, make online payments for premiums, compare different insurance plans, apply for claims, and more, with the insurance software.
What makes us your ideal financial solution partner?
We bring you a great deal of flexibility in choosing a finance and operation support model as per your business requirements. As a financial consultant, we work to have a strong grasp on your business’s strengths, eliminate weaknesses and suggest tailor-made solutions for a particular problem, along with handpicked support schemes. More importantly, we provide end-to-end solutions that help you streamline an array of operational and financial management processes.