What are the benefits of using a Financial Management System (FMS) in an organisation? Should you even invest in an FMS?
An organisation using modern-day financial accounting software can gain a lot of benefits. Let’s have a look at some of them:
Streamlined financial and accounting operations
One of the most notable benefits of using an FMS is that it streamlines financial and accounting operations. By doing so, the finance department gains more time to focus on other important functions like increasing revenue, improving customer service levels and reducing operational costs.
Ability to automate routine tasks and processes
Finance professionals use an FMS to automatically handle the majority of their existing financial processes, saving themselves time. Financial management systems also make it possible for finance staff to perform multiple functions at once, thereby being able to move work faster and complete projects within time and budget.
Access to real-time financial and non-financial data
Finance professionals can now access a wide range of data from multiple sources in one platform. No longer do you have to spend time pulling reports and manually compiling data. Instead, an FMS automatically extracts all the information you need, whether you’re looking at revenue, costs, or projects.
Managers can now make data-driven, informed decisions quickly
A finance system helps managers to take advantage of big data in their business. A finance system aggregates information from various departments within an organisation and provides a single view, so they can easily understand the relationships between different sets of data.
When managers gain instant access to real-time data and instant answers to their questions, they can easily make informed decisions much faster.
Errors and omissions are a thing of the past
By automating financial processes and centralising their data in an FMS, finance professionals significantly reduce the chance of errors and omissions because everything they need is already readily available to them.
This directly curbs losses associated with things like manual data capture, ensuring that the finance department is operating in a more efficient manner.
In today’s dynamic business environment, being able to adapt to change quickly is crucial for organisational success and maintaining high levels of profitability. With an FMS you can better manage this process because it allows organisations to adjust to changes quickly and more easily.
Visibility and insights into operations
As an FMS provides you with all the data for your organisation in one place, it makes it easier to identify trends and uncover insights. This allows you to gain insight into opportunities that might help improve the bottom line in areas such as pricing, sales, and production.
Improved operational efficiency that drives finance staff productivity
As repetitive, mundane tasks are automated or streamlined, finance employees are able to concentrate on more value-added activities, leading to better operational efficiency, optimum resource utilisation, and overall employee satisfaction.
You can also expect to see improved productivity levels.
Streamlined invoicing and bill collection
The right finance software allows you drastically reduce paper-based processing and eliminate manual data entry.
This allows your organisation to reduce collection times, improve cash flow by improving collections rates, and minimise bad debts.
Ability to optimise daily, monthly and yearly cash flow
As a finance system provides you with accurate and complete information about your business in one place, it makes it easier for you to forecast future cash flows. This helps staff to better manage working capital and optimise daily, monthly and yearly cash flow.
A more insightful analysis of expenses
An FMS gives you the ability to drill down into different areas of your business and identify areas for cost reduction. The right finance software can help you to spot problems in your bills before they blow out, allowing you to take action when it’s easier to make changes.
In the long term, this helps your organisation to spend less money on unnecessary expenses and save more money on downtime.
Enhanced compliance with accounting standards
As a finance system provides up-to-date information, it ensures you always remain compliant with current accounting standards and regulations because the software automatically generates financial statements and related reports in a format that complies with accounting standards, allowing you to remain in control of your financial reporting.
Faster processing of reconciliations
The right finance software makes it possible for accountants to process reconciliations much faster.
This is possible because reconciliations within an FMS integrate with bank feeds and therefore can be automatically processed without requiring any additional work from the finance team.
Integration of disparate applications and systems
The right cloud-based FMS offers extensive integrations, allowing organisations to seamlessly exchange data between all their systems and applications such as ERP, CRM, eCommerce platforms, and many more.
This provides organisations with better visibility of their entire business and allows them to make actionable decisions based on real-time information about all areas of their business.
Prevention of fraud and criminal activity
Accounting systems with embedded controls help organisations prevent fraud and criminal activity.
This is possible because finance software is able to flag unusual activity in real-time, allowing you to take immediate action towards preventing undesired activity.
Easier consolidation of data across the organisation
Finance systems provide organisations with a complete view of their entire business operations.
International organisations can achieve a single view of their subsidiaries by consolidating data on a centralised cloud-computing based system.
This allows organisations to streamline the consolidation process and eliminate the costs associated with purchasing, implementing and maintaining multiple accounting systems.
Consolidation also helps to lower risks as it enables you to access more information from various parts of your organisation.
Enhanced data security
Today’s finance systems incorporate the latest in encryption technologies to ensure that your company’s sensitive data remains secure when stored or shared across different platforms.
This ensures that only authorised users have access to this information and that it cannot be accessed by any third party who does not have a valid business reason for gaining access.
Cloud-based centralised storage with any time/anywhere access
Finance systems enable you to store your data in a central cloud-based system that can be accessed from anywhere at any time.
This allows teams from various locations to work together on projects and provide information faster, even if they are far apart from each other.
Easy analysis and forecasting
Finance software provides you with sophisticated tools for data analysis, making it easier for you to predict upcoming trends and better plan your business operations accordingly.
Enhanced collaboration between finance teams across different locations
A cloud-based finance system helps your financial teams collaborate more effectively.
By using this type of solution, you can ensure that all team members across different locations have access to the same setup with real-time data and documents
This allows them to work on projects in unison, improve project visibility and eliminate unnecessary delays in decision making.
Maintain audit trails
Today’s finance systems offer auditors greater transparency, making it easier for them to review your transactions.
Advanced technologies are now able to maintain detailed audit trails providing users with historical data that can be used for reporting and analysis of the company’s financial performance.
Deliver better budgeting and planning
Finance systems with planning and forecasting modules allow organisations to better plan and budget for their business operations.
This leads to better resource allocation and promotes higher levels of financial control in your organisation.
Increase the accuracy of your financial reporting
Advanced finance systems allow you to improve reporting accuracy by providing a single version of the truth.
All information is stored in one place allowing for easy retrieval, making it easier for you to produce accurate reports and manage your business more effectively.
Eliminate redundant data entry
Finance technology makes it possible for organisations to automate repetitive accounting tasks such as invoice processing, purchase order generation and recording of time and expenses.
This ensures that the same information is not entered multiple times and leads to more efficient processing of transactional data, helping you save time and money.
Lower costs associated with regulatory compliance
In order to comply with industry standards and government policies, most organisations have to hire a team of finance professionals who will track all transactions and prepare the necessary documentation.
By switching to a cloud-based finance system, companies can reduce their operational costs by eliminating the need for additional manpower.
More accurate budget projections
With finance technology, it is possible to make faster adjustments to your company’s budgets based on incoming invoices.
This helps you forecast more accurately and manage your cash flow more efficiently.
Better control over the accounts payable process
Today’s finance systems offer a host of features that help you speed up the account payable process.
With smart accounting software, you can automate a number of your operational tasks and streamline the entire workflow, from order entry to invoice processing.
This ensures that suppliers are paid on time and reduces the chances of late payment penalties.
Faster closing of financial reports
It takes less time for finance teams to close financial reports using an advanced finance system.
This way, they can finish their work faster and better manage the company’s cash flow throughout the month.
This is possible because it automatically calculates depreciation, accruals, prepayments and other ledger entries without requiring any additional work from accounting staff.
Finance systems are designed to help managers get more control over their finances and boost performance.
With the right solution in place, you can automate finance processes, eliminate redundancies, improve compliance with accounting standards, manage your company’s financial operations more effectively, among other benefits.
To find out more about how finance technology can help your business, please contact us today.