Financial management software: getting to “yes”

Financial management software has become a crucial tool for SaaS businesses in today’s fast-paced digital world. Still, SaaS CFOs commonly face resistance to these technologies for various reasons, and it’s your responsibility as a finance leader to make the case for automation and technological progress at your company.

In this guide, we’ll show you exactly how to do that. We’ll dive deep into understanding financial management software, its key characteristics, its value for long-term enterprise sustainability, and the different types available on the market. We’ll also explore the unique benefits of financial management software for SaaS businesses and some profitable use cases. By the end of this post, you’ll be ready to build a rock-solid business case for financial automation.

Understanding financial management software

To generate support for automation, you need to share its top benefits with stakeholders at your company. Below are some main points you should touch on.

Financial management software offers features like budgeting tools and lightning-speed financial reporting, which enable businesses to track their expenses, manage their cash flow, and make informed decisions in all financial climates.

With real-time financial data and analytics access, automated planning software helps finance teams streamline their processes and save time on repetitive tasks. It also provides built-in scalability and integration with your other systems and apps, making automation a good choice for businesses of all sizes.

By automating workflows and providing end-to-end financial solutions, AI planning software enhances organizational transparency, risk management, and profitability. Whether you’re a small startup or a large enterprise, financial management software has a crucial role to play in maximizing the long-term profitability of your organization.

What else can you mention to stakeholders and employees to garner support for accounting automation?

The role of financial management software in SaaS businesses

Financial management software is a crucial piece of guaranteeing success in the modern SaaS industry. Why are so many SaaS accounting departments moving away from legacy tech and manual processes? Let’s take a look.

An automated accounting system enhances cash management and expense management. 

Automation enables you to track and manage financial transactions effectively, providing real-time insights into your organization’s cash inflows and outflows.

Planning software automates financial tasks for accuracy and efficiency. 

By streamlining budgeting, forecasting, and reporting processes, AI software improves efficiency and allows finance teams to make informed decisions based on accurate data. It also gives you an automated general ledger that’s always up to date and even continuously closes your books to eliminate the grueling month-end close. 

Data centralization with a single source of truth. 

One of the largest problems with manual accounting is that it leads to data silos. In other words, each department manually updates its own data and then shares it with the rest of the organization. Automation provides a single source of truth (SSOT), so everyone gets fully updated data from the same central location.

This is a great touchpoint to help build support for AI at your company. If you currently use data silos, then every stakeholder at your organization can likely think of a few instances where an SSOT would’ve been useful. It saves time, ensures accuracy, and prevents missed deadlines on shared projects.

Automation makes ASC 606 compliance a breeze. 

Cloud planning tools help businesses ensure compliance with ASC 606–complete with detailed audit trails and drill-down functionality–while stopping revenue leakage. Definitely worth mentioning to stakeholders and board members, because manual accounting practically guarantees some volume of revenue leakage.

Touchless invoices for built-in reputation management.

As a SaaS CFO, you should look at an invoice error as a serious problem–and honestly, so should everyone else at your company. Beyond the time and hassle spent on correcting the mistake, it also makes your organization look unprofessional. And in the age of social media and online reviews, it only takes a couple of invoice slips before the word spreads that you’re a less-than-reliable company.

With its powerful functionality and benefits for maximizing business intelligence, financial management software is a good choice for small businesses looking for pain-free growth, mature companies looking for strategic expansion, and anyone in between.

Types of Financial Management Software

SaaS finance and accounting leaders need a solid understanding of the different categories of financial management software on the market. This will allow you to make the most informed and profitable purchasing decision for your organization and provide important context when discussing the topic with others at your company.

Below are 3 major categories of planning software for SaaS companies, to help you assess your needs and goals.

1. Enterprise resource planning (ERP) software

An ERP system plays a crucial role in financial management for SaaS businesses. By integrating financial management with other business processes, ERP software ensures seamless operations in your department and across your company.

It provides real-time data and analytics, empowering decision-makers with the insights they need to make strategic choices. ERP software also streamlines financial workflows, reducing manual errors and improving overall efficiency. ERP solutions usually offer seamless scalability and advanced customization options, allowing you to tailor the software to your unique needs.

Additionally, ERP software improves collaboration and communication across departments, streamlining the collaborative elements of financial management. With its end-to-end functionality, ERP software is a valuable tool for businesses seeking to optimize their financial processes and achieve long-term success.

2. Financial planning and analysis (FP&A) software

FP&A software enables SaaS businesses to make informed financial decisions through data analysis and revenue forecasting. With FP&A software, companies can create accurate and timely budgets, perform financial modeling, analyze SaaS metrics in the blink of an eye, and even compare the downstream effects of complicated billing models.

This streamlined approach saves time and improves accuracy in financial planning processes. The software provides real-time insights into the financial health of the business, enabling proactive decision-making. Additionally, FP&A software integrates with your existing systems, such as ERP and CRM solutions, offering a holistic view of your company’s performance. FP&A software with AI is an essential tool for finance teams, enhancing workflows and ensuring transparency in business processes.

3. Accounting software

Accounting software is crucial for helping businesses track and manage their financial transactions. It offers features such as invoicing, expense tracking, and financial reporting, which help streamline financial processes and enhance accuracy. One significant advantage of accounting software is that it allows for real-time access to financial data from anywhere through cloud-based systems. This is a big benefit for SaaS companies, many of whom hire remotely.

Now that you’ve had a refresher on the different types of financial management solutions, let’s jump back into their benefits for SaaS companies.

How Does Financial Management Software Benefit SaaS Businesses?

Financial software takes a large percentage of the gruntwork and the guesswork out of running a SaaS accounting department.

In other words, tedious manual processes–the gruntwork of accounting–are run in the background while you’re engaged in strategic tasks. And the financial guesswork of being a CFO–forecasting churn rates, billing models, and everything else–is significantly reduced through automated forecasting, advanced reporting, and FP&A functionality.

RELATED: Warning Signs Your SaaS Company is Outgrowing QuickBooks: Painful Audits and Challenging Forecasts

Streamlining financial operations

Financial operations can easily be streamlined with financial management software. Automating manual processes saves SaaS companies time and reduces the risk of costly human errors. This in turn improves efficiency and allows your team to focus on growth strategies.

With real-time data and analytics, financial management software provides actionable insights that stakeholders and board members can actually turn into profits. Moreover, cloud solutions integrate seamlessly with other business systems, creating a smooth organizational workflow even if your company relies on a complex web of apps and systems.

Enhancing financial reporting and analytics

Financial management solutions significantly enhance software organizations’ financial reporting and analytics capabilities. With real-time access to financial data, you can generate accurate reports and perform in-depth analysis of dozens of SaaS metrics.

Automated reporting features save time and reduce errors that may occur through manual data entry–it even streamlines and simplifies the creation of board packs. And speaking of board meetings and presentations, customizable role-based dashboards with detailed visuals help with financial storytelling.

Cloud solutions also provide advanced analytics functionalities, enabling finance teams to identify trends, patterns, and insights for better and faster decision-making. By leveraging these features, finance teams can elevate their reporting and analysis processes, leading to better financial management.

Eliminating the risk of manual errors

Financial management software solves one of the biggest challenges in financial operations: the risk of manual accounting errors. Planning software ensures accuracy and consistency in your organization’s financial data by automating processes such as data entry and calculations. Manual errors can lead to costly mistakes and large discrepancies–think of the difference a single misplaced “0” can make–impacting the overall financial situation of your business.

With financial management software in place, organizations minimize the risk of errors and improve overall accuracy in their financial reporting workflows and decision-making. This improves company-wide transparency and gives finance teams real-time insights into their financial data. By eliminating manual errors, businesses can confidently rely on the software to provide accurate information for better financial management.

Key functionality to look for in financial management software

Choosing an automated planning solution for your business is a big responsibility. You’re putting systems in place that can have long-term impacts on your company in either direction, causing further headaches or helping you transcend your department’s problems once and for all.

It helps to know what to prioritize when doing comparison research in the due diligence phase. Here are 3 of what we consider to be the most important priorities to look for.

1. User-friendly interface

An intuitive and user-friendly interface is vital when it comes to navigating and making the most of your financial management software. The software should have a design that’s easy to understand, with customizable role-based dashboards that can be tailored to individuals’ specific needs. A user-friendly interface lets you quickly access crucial financial data and simplify complex tasks.

Make sure that even non-technical users will find it easy to understand and utilize the software. Selecting robust yet easy-to-use software is a fantastic way to lower organizational resistance to automation if you happen to be facing any.

2. Scalability and Customizability

Scalability and customizability are key factors to consider when choosing financial management software. Scalable tools can effortlessly accommodate your growing business needs, handling a greater volume of data and users without any performance issues.

On the other hand, customizable software allows you to tailor the features and functions to meet your specific business requirements. This means you can personalize the software interface and workflows to match your team’s preferences, enhancing efficiency and productivity. Multiple currency options and multi-entity accounting capabilities are two important parts of that equation, so keep those in mind while you’re doing your internet research on different solutions.

3. Integration capabilities

Integration capabilities play a crucial role in ensuring seamless data sharing between different software systems. This is a frequent cause of stakeholders’ reservations about accounting software: they’re worried it will either interfere with or not integrate with the apps and solutions they depend on to do their jobs.

This is why choosing a solution that easily integrates with your organization’s existing third-party apps and enterprise tools is important. Look for software that offers open APIs or pre-built integrations with popular business applications to streamline the process further.

Addressing common myths about financial management software

When building buy-in for automation, it’s useful to understand some common misconceptions that might be floating around your company. Below are some common myths about accounting automation and tips for addressing them successfully.

Myth: Accounting automation software is expensive

When considering accounting automation software, stakeholders might be wary of its upfront cost. However, it’s important to recognize that the initial investment can lead to long-term savings and profits, and that automation pays for itself quickly while providing objective benchmarks to gauge ROI.

Myth: Automated accounting suites are tricky to set up

It’s a common misconception that automated financial planning is difficult to incorporate into organizations. Yes, it’s true that implementing automated accounting suites requires careful planning and execution to ensure smooth adoption. But if you select a reputable vendor, their customer success team will help guide you through every step of the setup process and even provide hands-on training sessions for your employees.

Myth: “Accounting automation can’t solve the problems at our company”

While financial management software offers a range of benefits such as streamlining workflows and providing real-time insights into the company’s financial situation, it can’t be relied on to solve all the problems at your organization. If stakeholders have said some version of that to you, they’re right. Automation’s not a magic bullet. But it solves a huge number of common problems at SaaS companies that are often the hidden roots of those larger, “unsolvable” issues that stakeholders sometimes mention.

Take a look at this list to see if any of these “roots” are hiding in your organization and causing larger problems:

• Poor cash management
• Lack of visibility into operational data
• No clearly defined revenue recognition strategy
• Lackluster campaign results from using old or inaccurate data

Sometimes, if you’re facing an “unbeatable” problem, you need to look for its hidden causes and deal with those first.

Myth: Automation is only for large or mature businesses

It’s common for stakeholders outside the finance department to believe that automation is only for large and established enterprises. They might even believe it’s only for post-IPO organizations. In the same way, something that seems far-fetched to you–“We need to hit our IPO before investing in automation,”–might seem completely logical to someone else at your company.

That’s why it’s essential to convey two specific truths about financial AI to stakeholders. First, it’s never too soon to start investing in these tools and laying the groundwork for future growth. Secondly, automated planning software is hugely scalable. If you have 50 subscribers, it can seamlessly map onto your needs and help you serve those 50 customers much more effectively. If you have 5,000 customers or 50,000 customers, AI planning software can match your circumstances with no additional strain or performance issues.

But most importantly, the sooner your company invests in these tools, the faster and more easily the scaling process will go.

Financial management software: 3 profitable use cases for SaaS companies

When it comes to generating support for automation at your SaaS company, it helps to get specific about various organizational pain points. Below are 3 highly profitable use cases for automation that help solve common problems at recurring revenue companies.

1. Automation streamlines board meetings

AI streamlines board meetings by automating the preparation and distribution of board packs and other important materials. This saves time, improves efficiency–there’s no worse time for a manual mistake than a board meeting–and allows SaaS companies to focus on strategic discussions and projects.

With financial management software, accurate financial reports are accompanied by detailed visuals, ensuring transparency and fully informed decision-making. Automation enables real-time updates and collaboration, providing all board members access to up-to-date financial information. Board meetings are pivotally important for SaaS companies, and doing everything possible to optimize them is in the best interest of your entire organization.

2. Modern financial management systems plug revenue leaks

AI-based accounting software offers a solution to the problem of revenue leaks by centralizing the revenue recognition process. In manual accounting departments, revenue data is checked in its various siloed locations and then manually reconciled. It’s not difficult to see how manual process inefficiencies could quickly cause multiple revenue leaks.

Be sure to hit this point when discussing AI with stakeholders. Maximizing revenue should be on everybody’s mind at your company.

Automation makes compliance and security a breeze

An automated financial management system hugely simplifies compliance management. Compliance regulations in the SaaS industry can change with little notice, leaving companies vulnerable to large fines while they scramble to catch up. Cloud planning software allows you to put compliance on autopilot while you focus on profit-driving initiatives.

Compliance should matter to every stakeholder at your company. If the organization gets hit with a significant fine due to a violation, the funds available for everyone’s various projects and plans shrink.

Build support for SaaS finance automation in 6 easy steps

The value and benefits of financial automation are becoming more well-known, even among non-specialists. Still, for companies that have become accustomed to manual accounting, resistance from stakeholders is common for the various reasons we’ve mentioned in this post. As the person spearheading AI-based accounting at your company, you should equip yourself with quality strategies for overcoming roadblocks and generating stakeholder support.

Our ebook can help you create buy-in for automation in just 6 steps. You can read it here.