How to Evaluate FP&A Tools for Your Finance Department
Enterprise organizations can’t achieve effective financial planning and analysis (FP&A) without the use of modern FP&A tools. The capabilities of these innovative solutions unlock efficiencies and performance power to help finance departments deliver more value to their organizations.
FP&A may be just one part of a larger, more complicated finance infrastructure, but the right FP&A tools can deliver benefits across the full spectrum of financial activities and unlock new strategies that can help departments outside finance optimize their own strategies to generate higher returns for their efforts.
But the software you choose will determine exactly how much of this value you’re able to realize. Not all FP&A tools were created equal, and an outdated or limited solution can hurt your company’s performance both now and in the future. Here’s a look at the top criteria to consider when evaluating FP&A software.
Range of Features
Performance matters when choosing FP&A software. In general, finance departments should seek out solutions that offer dynamic modeling capabilities, and financial applications that cover the core principles of FP&A:
- Revenue
- Expenses
- People
- P&L
- Cash flow
- Balance sheet reporting
But speed, accuracy, and efficiency also matter. Workflows and collaboration tools should be offered within FP&A software to facilitate faster task completion and accelerate the time to close for financial planning and analysis activities for your entire enterprise.
Automation should also be available in as many aspects of FP&A as possible.
Not only does increased automation accelerate workflows and planning processes, but it also ensures greater data consistency, which leads to fewer data errors. The result? Fewer hiccups during the planning process.
The more you’re able to automate, the more valuable your FP&A processes will be.
CPM or EPM Support
Finance departments traditionally haven’t had a central role in managing performance and strategies across their entire organizations. But as the data acquisition and consolidation process becomes more comprehensive and fluid across departments, FP&A has become a more heavily relied-upon tool for measuring success and identifying strategic changes that could yield better performance, both within specific departments and across entire organizations.
Financial data isn’t the only type of data used to support corporate performance management (CPM), but its comprehensive, validated data offers insights that were previously unavailable to decision makers.
The ideal FP&A tool will be integrated into a larger suite of financial software solutions that support all aspects of enterprise finance operations, resulting in high-quality data that drives deep insights and elevates performance management for the entire company.
Read More About Why Tool Integration Is Key to FP&A
Learn MoreEase of Integration
If you’re adopting an FP&A tool that doesn’t belong to a suite of financial solutions, you’ll need to make sure that the software integrates seamlessly with consolidation, tax, and other core software platforms.
Even if the FP&A solution comes as part of a financial suite, additional integrations will be necessary to realize its full value across the organization. For example, FP&A software may need to integrate with fleet management technology to provide accurate modeling that helps businesses plan for potential changes in the price of fuel. Similar uses of this software can take place in any department within an enterprise organization, but only if the software is able to integrate with the core technologies of those departments.
Is It Built for Your Future?
The long-term value of FP&A software needs to be considered before you invest in a solution. The biggest factor in finding a future-proof FP&A solution is seeking out a platform that offers the latest and greatest technology on the market.
This means looking for solutions that offer automation and machine learning to drive faster results, deeper insights, and better modeling for your business. It also means finding a solution that offers broad integration capabilities, and the ability to customize and adapt features on the fly.
No one can predict the future, but change is all but certain. The more flexible your FP&A tools are, the more equipped you will be to handle whatever change comes your way.
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