Essentials of a Comprehensive Financial Management System (Part 3)
Introduction
In our previous two blogs, we discussed a few of the must-have features of an efficient financial management system, and we are back again to bring that discussion to a full circle. If you missed out on the previous blogs, just click the links below to read them!
Essentials of a Comprehensive Financial Management System Part 1
Essentials of a Comprehensive Financial Management System Part 2
Let’s begin!
Project Accounting and Contracts Management in Financial Management System
Organizations focusing on professional services and services in general, need project-based accounting and billing which is rather complex. The finance team must be in constant contact with the appropriate business units in your company to ensure that project deliverables are completed on time and that payments are identified, accumulated, and issued to the contractor. Synchronization with accounts payable for payment handling also needs to be done with detailed line items of the different deliverables from the contractor(s).
When the project-to-bill process is unified with the finance and accounting systems, stakeholders can enjoy real-time visibility into the appropriate parts. A good financial management system routinely computes the proper percentages of disbursements to be made at each stage of the project, effectively freeing up financial personnel to focus on evaluating project expenses to establish areas where cost-efficiency can be incorporated.
Uplift, and discounting are common problem areas that related to the contract management process. A good financial management system abridges these procedures by permitting the co-termination of multiple transactions into a single contract with a single renewal and by ensuring flexibility to execute and modify uplifts and discounts across any range of consumers.
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Actionable business intelligence becomes a must for companies operating in the current business dynamics due to the challenges posed by fragmented and scattered data. On top of that, conventional add-on tools are costly and complex to employ. They also lack the vital business intelligence elements and straightforward access. Companies that aim to scale with and succeed by utilizing business intelligence need a more holistic and thorough view of their business functions such as role-based dashboards that provide customized insights personalized to each finance user’s requirements.
Furthermore, to properly evaluate your company’s performance, you need quantitative metrics and KPIs that assess the success or failure of numerous activities across departments. The KPIs allow you to gauge performance alongside benchmarks and goals. When anomalies have been detected, you can navigate from the summary level to greater detail. With real-time data, companies can enjoy actionable insights that enhance their capacity to tackle problems as they occur and exploit opportunities quickly.
Adaptability to Specific Business Models
To boost efficiency and deliver thorough visibility into your business operations, a company’s financial practices should ideally not just be robust and auditable, they should also be automated. To do so, you need to ensure that your financial management system is flexible and compatible with your company’s growth models. It should be equipped to handle the changing needs of your distinctive industry and business model.
In addition to industry-specific abilities, the system should have built-in configurability, ease of customization, and flexible workflow management to support your business processes. The workflow engine should promptly edit the actions and rules and be able to identify requirements for workflow modifications.
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Low Total Cost of Ownership and Superior Ease of Use
A conventional finance team should compete with a variety of applications varying from accounting to financial planning, business intelligence, inventory management, and front-office systems like order management, CRM, and eCommerce. An IT department ought to devote significant time to prepare, deploy, handle, assimilate, and retain these various applications. The finance staff of an organization may be scattered in numerous locations and thus may face sluggish VPN client to gain access to the financial systems. Keeping this in mind, the fundamental company management system should be able to carry out key finance functions and reduce operating expenses by managing costs. Opting for a cloud-based financial management system is a foolproof approach to lowering the TCO (Total Cost of Ownership) of your solution.
A cloud-based financial management system empowers your employees with easy access to real-time data directly. Thus, a multi-tenant solution can achieve economies of scale by running the application for thousands of customers across a shared infrastructure, with cost efficiencies that are impossible to achieve for an individual department to realize on its own. Furthermore, the multi-tenant architecture frees up the company from legacy processes such as buying and setting up hardware, installing software, building out security models, setting up reporting engines, and integrations and defining user access and authentication systems.
Conclusion
A robust and sound financial management system is essential to managing your business processes effectively. In the modern business world, companies need to have real-time insights into various financial metrics that include profitability ratios, inventory margins, liabilities, fixed assets, and taxes. A financial management system that combines your order-to-cash and procure-to-pay processes presents you with exceptional business visibility while maximizing employee productivity. A flexible, cloud-based financial management system, such as NetSuite itself, with valuable business planning, complete system integration, and reliable reporting abilities, helps position companies for the next stage of growth.
I hope that this blog series has helped you gain more insights into the must-have features of an efficient financial management system. If you have any questions or queries, do not hesitate to reach out to us.
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