3 Best Budgeting Software and Buyers Guide
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Budgeting software is a tool that businesses use to allocate, track, calculate and manage their annual budgets. It aims to make the budgeting process accurate, dynamic and fast, with a reduction in the turnaround time.
The tool makes it easy to calculate and analyze financial data and forecast expenses. It removes manual errors attached with spreadsheet-based budgeting like miscalculations and inaccurate data entry. It provides characteristics like cash management, forecasting, and “what-if” scenarios.
Budgeting Software: Advantages
Businesses can utilize this software to track and manage finances based on the overall expenditure. Here are a few benefits of budgeting software:
Plan for future changes:
The software utilizes “what-if” scenarios to plan for future changes. The situations may have budget shortfalls, revenue fluctuations, price ups and downs, and many potentially positive and negative scenarios. Analyzing the scenarios provides business to understand the financial impact of every event.
Budgeting software provides complete transparency in financial transactions and data. This is done using features such as real-time reports, audit trails, and visually descriptive graphs and charts. Many of the solutions provide a unified view of multiple projects and related expenses, documents, images, and videos.
Adapt quickly by being agile:
The software offers businesses dynamics despite economic fluctuations or market remains unconfirmed. Organizations can accommodate the needed changes and keep the budget plans updated using features like rolling forecasts, which re-forecasts the budget every month or quarter. These timely and constant updates ensure that the estimates are accurate and relevant.
Often, different people handle different parts of the budget. In such cases, budgeting software prefers employees to collaborate on the exercise. It eases the budget approval process, and help improves communication with all the teams.
Budgeting Software: Features
Collect numbers and track the company’s cash flow.
Simulate potential financial outcomes and provides necessary provisions for the future.
We are using historical and current data to provide predictions. Offer a realistic idea of the business is future endeavours.
Manage the client company’s financial requirements and increase collaboration between multiple departments and projects on a unique tool.
Profit and loss statements:
Record the revenues, costs, and expenses over a definite period to gain a bright prospect of a client company’s financial aspect.
Budgeting Software: Pricing
Most of the products available in the market are priced on a “per month” basis. These can be divided into three pricing tiers based on the starting prices. The premium product is priced higher and has some unique features like rolling forecasts, document version control, and asset planning. Some of the leading providers also give free and open source versions of the solutions.
Considerations while buying Budgeting Software
Review the user licenses:
Most of the providers clearly show the product’s monthly or annual costs based on the number of users. Some may show on-premise solutions and sell at a one-time fee for a user license, while cloud solutions charge a per-user monthly fee. Although options could have extra costs like for integration, data storage, and backup, the review of services, total costs, and frequency of payments remain with the client.
Check for ease of use:
A user-friendly outlook is essential to simplify client operations. The software must have an interactive and intuitive dashboard. An easy-to-use dashboard saves a lot of time and effort needed to plan and execute the budget. This is only possible with characteristics like simple yet effective charts and graphs those highlighting different statistics.
Make forecasting a core feature:
The forecasting feature provides an estimated expense, sales, and other variables that impact the cash flow. It can decrease operational costs and capital expenditure to help companies foresee future issues based on data. The capability is found in complex algorithms which helps in planning for long-term success.
Assess integration capabilities:
The accurate budgeting software can help businesses get data imported from their systems like HR, accounting, ERP, or the general ledger. Consolidating all the data in a single database gives a chance to budgeting software to collect the latest, updated information. This helps improve budgeting correctness & accuracy by allowing for greater collaboration with different teams or stakeholders.
Budgeting Software: Trends
AI may plan a budget now:
Many businesses believe that artificial intelligence (AI) has great potential in making annual budgets. AI can offer real-time insights, provides accurate forecasts, and suggest informed financial decisions. It can spot anomalies and risks with adaptive learning ability. AI algorithms can self learn and make budget planning more efficient.
Predictive analytics for accurate forecasts:
Accurately forecasting the expenses may be tricky for a human if they use spreadsheets. Predictive analytics can play a crucial role in estimating costs for the coming year. The feature emphasizes on historical data to compare cash flows and expense ratios more accurately to identify the critical drivers for late-payments and predicting the probability of such situations.