10 Essential Features to Look for in Financial Management Software

FinTech is one of the fastest-growing sectors globally, expected to reach 5.8 billion digital payment users by 2027. If you are seeking to scale your fintech business, financial management software can be a game-changer for companies of all sizes. It helps you control financial transactions, budgets, accounts payable and receivable, invoices, taxes, and more. 

When considering a financial management software solution for your business, you should be aware of certain must-have features that can take your finance strategies from outdated to world-class in no time. The 10 most essential financial management software features we will discuss include the following:

1. Advanced reporting and analytics;
2. Ledger consolidation;
3. Workflow automation; Tax management;
4. Cashflow tracking;
5. Multi-currency management;
6. Forecasting and planning;
7. Accounts receivable and payable;
8. General accounting management;
9. Fixed asset management.

Let’s understand these features while looking for financial management software outsourcing.

1. Advanced Reporting and Analytics

Among all the potential features of financial management software, this one is perhaps the most crucial. Advanced analytic tools can change the way you run your business. You can monitor income statements, balance sheets, financial ratios, and cash flow statements and provide insightful analysis of your company’s financial state. 

Using this information, you can monitor trends, assess financial performance, identify potential risks such as income or expenditure risks, and make profitable investments. For instance, banks can analyze transactional data in real-time to spot patterns and anomalies that could indicate fraud.

The system should generate detailed financial reports with great accuracy, speed, and reliability. This tool aids in automating numerous report packages, cutting days off of your manual report processing time monthly.

If you want to analyze certain financial components, such as current and expected sales, profits, assets, etc., you may incorporate customized dashboards to provide a better financial picture. By selecting necessary categories, you can display data in tables, charts, or graphs to assess performance and examine weak areas. 

2. Ledger Consolidation 

Ledger consolidation gathers financial data from multiple ledgers or accounts into a single financial statement. So, if your company deals with multiple business units that maintain their own financial records, it’s crucial to pick a platform that simplifies financial management across all of them.

The process involves identifying and reconciling data differences between the various platforms, ensuring that all transactions are appropriately classified and recorded, even while working with several currencies. Among the many aspects you may monitor are assets, liabilities, capital accounts, revenue, expenses, etc. Having all of your financial data in one place can help you easily navigate transactions within your business units and quickly identify any fraudulent activity.

3. Workflow Automation

One of the most important features that your financial management software must have is workflow automation. It aims to speed up and improve the accuracy of various functions, such as establishing a budget, planning, invoicing and billing, managing expenses, and reporting. 

You can also create workflows using automation systems that assign tasks, send messages, route documents, and send alerts automatically if needed. This not only streamlines the process but also decreases the chance of manual mistakes.

By automating repetitive tasks, you can decrease the time needed to perform daily operations and free up yourself to focus on strategic planning and business expansion.

4. Tax Management

With constantly changing tax laws and regulations, it can be challenging to keep in mind all the taxes required and not miss the filing of declarations, taking into account the tax laws of each individual country. Additionally, small businesses usually don’t have a tax manager on staff. They frequently outsource their tax management, which is rather expensive.

So, the best option to effectively manage your taxes and avoid legal issues with the authorities is to look for financial management software that features tax management functionality. Tax management tools help fill out tax returns, track liabilities, manage tax payments, provide audits and reporting, and store system taxation settings to guarantee consistent VAT and sales tax collection. With good tax management, you will be able to calculate tax obligations accurately and stay updated on any changes to tax regulations.

5. Cashflow Tracking

Cash flow tracking will help you control your income and expenses, create budgets, and monitor cashflow in real-time. It’s a useful feature that can help you gain insights into your spending habits, identify areas where you are overspending, and take proactive measures to optimize company finances. In other words, you have the ability to audit your finances, be confident that your costs are meeting your financial goals, and ensure that you stay profitable.

For example, the profit tracker can provide you with a top-down perspective as to your company’s overall financial health and resource boosting. By monitoring your earnings, you can identify additional revenue sources and calculate the return on investment for every given purchase.

6. Multi-Currency Management

If you operate globally or have clients across various countries, you should definitely  choose  software that supports multi-currency management. This will help you handle financial transactions in various currencies without the need for manual calculations and conversions. For example, you can streamline the purchasing and selling of foreign currencies.

Additionally, you will be able to compute currency exchange rates, deliver real-time currency conversions, and create reports that show financial data in the currency of your choice. This makes it simpler for you to compare how your businesses perform in various markets and  effectively manage international financial operations. 

7. Forecasting and Planning

Financial planning software packages assist management by offering the capability to plan, analyze, and develop a financial strategy for your business based on various financial parameters, including profit and loss, balance sheet, and cash flows. The system can help you analyze historical financial data, forecast financial requirements and sources of funds, and develop a budget.

By properly forecasting your budget, you can identify promising opportunities to boost your business and point out potential difficulties, so as to avoid investment or credit risks. For example, you can plan a systematic approach to allocating financial resources to various business activities and investments, to ensure that resources are used in the most efficient way.

8. Accounts Receivable and Payable

It’s worth choosing financial management software that includes accounts payable and receivable modules. An accounts payable and receivable function that combines your expense data with your purchasing system will help you manage your cash flow.

• Accounts payable mode provides you with a systematized way to manage payments to clients and suppliers. You may automate the process of entering invoices, confirming their accuracy, and arranging payments by using a centralized system. To make sure that your team is following your money management policies, the software will let you set up payment approvals. 
• Using accounts receivable mode, you can monitor all of the money that clients owe you. You may automate processes such as creating invoices, reminding customers to make payments, and sending account statements. You can increase your financial performance by ensuring that payments are made on time, lowering the risk of unreliable debts. 

9. General Accounting Management

Need a single user-friendly platform that displays all the financial operations in one unified place? Search for financial management software that can streamline accounting processes and make it easier for you to meet regulatory standards. An accounting software features list includes:

• monitoring all daily accounting operations;
• managing audit and compliance requirements;
• creating financial statements;
• providing cost and revenue management;
• bank reconciliation; and more.

Choose customized accounting software that will meet the specific needs of your business. If you run a small business, you may only require basic features, such as invoicing and expense tracking. For a larger enterprise, you may need to develop advanced features such as a detailed chart of accounts to paint a transparent picture of a company’s entire financial health by separating out expenses, income, assets, and liabilities. 

For example, an online e-filing app can help users easily manage finances, invoices, payroll, and reports; track rental properties; and calculate and file HST (Harmonized Sales Tax) online.

10. Fixed Asset Management

Finally, your financial management software should handle fixed asset management. This feature will help you manage your company’s tangible assets, such as equipment, vehicles, furniture, etc., and intangible assets, like patents, trademarks, and copyrights.

A comprehensive system for managing fixed assets should include regular audits and assessments to ensure all assets are accounted for and being used effectively. You can track the assets’ value, calculate depreciation, and maintain their condition or status to ensure they continue to provide profit value to the company.

For instance, you may plan a budget that includes tracking depreciation of your assets or avoiding tax payments on things you’ve removed from your business.

In summary, seek out a solution that will provide a complete picture of your company’s financial health to make informed business decisions and identify opportunities for improvement. A custom fintech solution will help improve your management of daily financial operations, minimize human error, and reduce inefficiencies. As an outsourcing development partner, HQSoftware can offer high-quality services to help you develop top-notch financial management software that will keep your company profitable and safe. With deep expertise in financial software development, HQSoftware can develop a variety of products based on your unique requirements and within your budget.

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