Who Uses Financial Analysis Software?
A wide range of users throughout a company can use financial analysis software to benefit from its insights and analysis.
Finance professionals: Financial analysts, accountants, and CFOs are examples of users who use financial analysis tools to analyze financial data by generating financial reports for decision-making, budgeting, and forecasting.
Managers: Managers from any department within an organization can benefit from utilizing dashboards and reports that provide details on the financial performance of their teams. Financial analysis software can also give more insight into their department that they usually wouldn’t have access to, such as profitability and loss data, market trends, or financially wasteful activities.
Treasurers: Corporate treasurers utilize this software to manage cash flow, liquidity, and risk exposure, ensuring financial stability and optimizing cash management.
Compliance professionals: Professionals in regulatory compliance use financial analysis solutions to ensure adherence to financial regulations and prepare financial statements and reports required by regulatory organizations.
Auditors: Auditors can use financial analysis tools to analyze financial records, transactions, and activities to ensure accuracy and compliance during the auditing process.
How to Buy Financial Analysis Software
Requirements Gathering (RFI/RFP) for Financial Analysis Software
When selecting financial analysis software, it’s essential to first look at how the business operates and then become familiar with the different types of software available.
There are many options for financial analysis products, including those designed for the business needs of small and medium-sized companies.
Some things to consider include its ability to integrate with accounting systems and provide cash flow analysis, trend analysis, and risk analysis, to name a few.
Compare Financial Analysis Software Products
Create a long list
Depending on the industry, the buyer will want to create a long list of software products designed to help businesses in their particular industry.
For example, there are platforms built explicitly for enterprises, while others have flexibility with the number of users and allow additional seats as a company grows.
Create a short list
After reviewing and researching the software on the long list, the buyer can whittle it down based on their budget. Financial analysis software is available for all budgets, and some general applications may be downloaded for free or bought at a lower price.
However, buyers must remember that the more specialized and customized a software is, the more expensive it gets. This is because the user base for specialized software is relatively small. The company should be prepared to pay a premium if it wants something specific to its industry or customized for its business.
Conduct demos
As a rule of thumb, companies should demo all products on their short list. During demos, buyers should ask specific questions about the functionalities they care about most.
For example, one might ask to be walked through any features for managing cash flow analysis, reporting, or comparative analysis.
Selection of Financial Analysis Software
Choose a selection team
The managers from departments such as accounting, finance, sales, IT, and procurement should be involved in the selection process. Every business is different, and frequent users are in the best position to offer an educated opinion on the business's particular needs. Some users may even be able to help the company install and set up the software of their choice.
After choosing the software, buyers must remember that they don’t have to be stuck with this selection forever; most platforms allow for add-ons or modifications. However, the company shouldn’t make this decision lightly because no matter what software is chosen, it will involve a considerable commitment of time and money.
Therefore, it is also essential to check the scalability of the software solution and vendor capability (from reviews, vendor background, and historical performance in the market). To see a return on investment (ROI), buyers cannot change their minds in a few months and switch software.
Negotiation
Negotiating a software contract is vital to minimize risk, whether in terms of performance protection, security protection, or simply ensuring that both parties agree on what to expect from the other.
If a business has the cash flow, it could ask for a discount in return for an annual upfront payment, and many software providers are happy to make that deal. A software provider may offer unlimited usage if the buyer pays upfront instead of a monthly or quarterly package price.
Buyers should also determine if they need help implementing or integrating the software with other systems. Usually, a software provider's first offer will include some implementation services in a given timeframe. Buyers can ask for these services to be removed if they can manage it themselves or if a third party can do it for cheaper.
Buyers also need to decide for how long they will need this software. If the company uses the software for years, the buyer can negotiate for a long-term offering, sometimes resulting in more favorable pricing.
Final decision
The final decision should be based on all the information gathered previously. Businesses should prioritize needs and select the solution that meets most, if not all, of their requirements. Companies must remember that there isn't a perfect software, but there is one that is best for their business.
If possible, buyers should try to conduct a pilot program with a smaller sample size of users to gauge how well the software is received, integrated, and implemented. If the platform receives high marks, then they can buy with confidence. If the tool is inefficient or not performing as expected, it might be time to test another tool.
