What to Look for in a Financial Forecasting Tool

Technology has revolutionized just about every aspect of corporate life, and fortunately for CFOs, that includes the way we can now forecast cash flow statements, balance sheets, workforce expenses, sales and revenue and P&L.What’s particularly exciting is the way technology can automate how financial data flows through models and forecasts, freeing financial teams from the manual labor of attempting to create forecasts via spreadsheets. More importantly, the automation means executive teams have real-time up-to-date information to make decisions, and not a static forecast that is months old. But to truly benefit, you need to ensure your financial forecasting software has specific features and functionality that will make it easy for you to update your forecasts on a weekly basis.

What to Look for in a Forecasting Tool

Look for financial forecasting software that allows you to:

• Centralize your data in a single database, not across numerous spreadsheets
• Consolidate your data automatically, providing real-time forecasts from summary to detail level
• Reflect changes in assumptions about key business drivers or market conditions instantly, across the entire model
• Generate variance reports of budget, actual and forecasted numbers
• Facilitate comparison of multiple forecasts, i.e. forecast with flat sales and stable healthcare costs vs. forecast with 10% sales growth and 5% Healthcare Increase
• Provide a long-term view, with the ability to create rolling forecasts beyond 12 periods
• Quickly and easily compare Income Statements, Balance Sheets and Cash Flow Statements for multiple periods and versions
• Give budget managers the ability to update line items and generate accurate reports
• Manage complex what-if scenarios with no labor-intensive formulas, macros or links

In a perfect world, your final budget and financial plan would last the entire fiscal year. The reality? Your budget is an ever-changing document, reflecting changes in your operations, customers, suppliers, financing or other factors. Choosing the right financial forecasting software gives you preparedness and protects you from the unexpected, which for a business of any size could mean the difference between success or ruin.