Financial reporting software refers to solutions that are designed to help users perform financial and accounting tasks. This type of software varies from basic single-entry systems like bookkeeping and check writing to complex double-entry solutions. Leading vendors offer advanced functionality such as fixed assets and inventory. Financial reporting software can be beneficial for your company as it can help to keep your books accurate and you can also get timely reminders to avoid late penalties. In today’s competitive business environment, a quality financial reporting software has become essential to cut accounting costs and boost efficiency. The best thing to do before shelling out your hard-earned money is to compare the features of leading apps in this category, especially FreshBooks which currently tops this group.
Generating statutory filings and fulfilling financial reporting requirements were considered straightforward and easy tasks in the past. However, today, internal and external reports include data from multiple online programs, locations, and stakeholders–and often need detailed notations and descriptions. A good financial reporting software can make the task of preparing reports easy for your business. This buyer’s guide aims to give you useful tips to help you make informed comparisons to sort out the best Financial Reporting software platforms for enterprises from the average ones.
Get to know each product with free trial
A good course of action is to sign up for at least a few free trials or demos and basic unpaid plans from popular financial reporting software providers. With that method, you will have the opportunity to test the important elements and you will get a good comparison of the capabilities of each app. The best thing to do is to try software tools that currently have the highest rankings in the SmartScore and Customer Satisfaction Rating in our financial reporting software reviews and choose the best Financial Reporting software for your company.
Financial reporting software is a basic component of accounting and financial analytics, which eliminates the difficulty of generating coherent reports that become more and more confusing as the business grows. This doesn’t mean, however, that large businesses are the only ones that can benefit from it:
- Financial Reporting Software for Small Business. Even startups and small businesses could benefit from automated financial reporting, ideally using a cloud-based, single-purpose accounting package rather than complex ERP suites.
- Financial Reporting Software for Medium Businesses. Due the fact that they are developing fast, mid-sized businesses ought to start with a simple solution, which can cope with their growth and accept bigger information-load in the future. The perfect solution is to consider their assets and financial regulations they have to comply with and to choose a program accordingly.
- Financial Reporting Software for Large Businesses. This is probably where financial reporting software is most needed, in particular, one that is industry-specific, rather than a one-size-fits-all. Large enterprises need to consider prominent vendors that promise to minimize accounting errors and reduce the number of hours spent on optimization, processing, and making important fiscal decisions.
What are Examples of Financial Reporting Software?
- FreshBooks: One of the best cloud solutions for small companies that streamline tracking and invoicing. It allows you to collect payment online and is packed with advanced analytic features.
- Intacct: Another highly-efficient cloud solution for small and medium businesses that provides statistics and key figures to help companies make smarter decisions.
- QuickBooks: Simple and very popular software for small businesses that are just beginning to manage accounts receivable. It checks invoices and purchase orders and eases business transactions.
- Xero: An online accounting app for businesses of all scales and industries, but also individual accountants and bookkeepers. It focuses on collaboration and keeps teams connected wherever they are.
- NetSuite ERP: A scalable and complete ERP solution that automates both front- and back-end processes, and offers customizable views with key performance indicators.
Types of Financial Reporting Software
One of the things that makes choosing financial reporting tools so difficult is the variety of programs that can be used for the purpose. They range all the way from basic tool suites to ultra costly and accurate programs. The list of features can also be categorization criteria, as certain programs do nothing but calculate payroll requirements, while others are more robust and they allow users to prepare taxes and forecast future accounting difficulties and even do some custom branding. The basic division criterion is deployment, depending on which you can choose between:
- On-premise financial reporting systems. These are covered with a single license, and hosted on the client’s local server. They qualify as the most expensive ones, due to the fact that they require complex setup and occasionally some hardware installation.
- Software-as-a-service (SaaS) financial reporting systems. These are usually paid per month, and hosted on the vendor’s server. The business owner is not responsible for installation, updating, and maintenance.
- Cloud-hosted financial reporting systems. Most of these offer free basic plans and qualify as the most affordable ones due to their universal access and the fact that the client doesn’t need to update them or pay for maintenance.
Key Features of Financial Reporting Software
Most financial reporting tools include the following essential features:
- Basic accounting tasks – Small businesses can easily take care of their accounting needs with software that offers basic features like invoicing (both by snail mail and email), client and vendor management, financial report generation, and income and expense tracking.
- Automation – The software should enable you to automate processes like recurring payments, automatic billing, and past-due notifications to save you time.
- Estimate and quote creation – You can use customized templates to create estimates and quotes for clients; these can be automatically converted into invoices.
- Tax preparation – Financial reporting software can also help with your taxes by including features, such as tax reporting and multiple tax rates, and automatic tax calculations. You should be able to easily email all necessary files to your accountant.
- Multiuser access – Most financial reporting software can be used by multiple users. This will help you to give access to your accountant and financial consultants, too.
- Purchase orders – There are also financial reporting solutions that include the capability to generate purchase orders. This feature allows users to transform estimates and quotes within the platform automatically. Thus, you can avoid double entries and related errors.
Benefits of Financial Reporting Software:
- Simplified financial processes. In some companies, reports are created by employees who do not have a background in finance. It can be time-consuming to provide these employees with end-user training on new software. Therefore, consider products that use Microsoft Word and Excel to collect data for narrative contributions, as they are easier to use.
- Real-time updates. The availability of a real-time updates feature can reduce overall reporting time as well as time spent on revisions. For further efficiency, the updates should be automatically made to all linked documents and reports.
- Scalability. Solutions that charge by contributor or report, and those that limit the number of contributors are not ideal applications. Shun these types of solutions and focus on selecting a simple financial reporting solution that makes it easy to produce virtually any type of report, including customized presentations and reports that usually take time to prepare.
- Workflow management. The software should be able to automate the reporting process, including tasks such as setting and managing deadlines for contributions, delegating responsibilities, managing reviews and sign-offs, sending alerts when required, tracking edits and sources, and showing the latest report status when needed.
- Easier number handling. The financial reporting software should make it easy for users to handle numbers accurately by providing features like currency conversion, rounding, and number formatting. This can eliminate employee frustration and save them time while preparing financial reports.
- Expense management. With a financial reporting solution, you can see where your money goes. You can then determine whether those expenses are essential or not. Thereon, you can decide which expenditures to keep, to ensure the smooth operation of your business.
Cost of Financial Reporting Software
The cost of financial reporting software varies depending on the type or the deployment of the solution. For example, if you select an on-premise platform, you need to pay upfront hundreds or even thousands of dollars. That is because you will be acquiring a lifetime license for that software. If you intend to use it on several computers, then it will be costlier.
Meanwhile, if you select a cloud-based or SaaS solution, then you can cut down costs marginally. Because the vendor hosts the software, you do not need to perform maintenance or patch updates on your end. Plus, you can adjust your subscription according to the number of users per month. However, if you already have a fixed number of seats, then you can opt to pay for the software yearly, which can avail you of a discount if the vendor offers it.
Trends in Financial Reporting Software
- SMEs move to the cloud. Small and medium enterprises are leaning more towards cloud-based accounting and financial reporting tools. Indeed, according to a market report, over 50% of businesses are predicted to choose SaaS offerings. One of the main reasons for this is the faster deployment of the solution.
- Consolidated systems. While a financial reporting software sounds like it is dedicated only to creating financial reports, it does have accounting features. As a result, there are businesses that opt to acquire this kind of solution rather than a standalone accounting platform. This way, they can consolidate multiple systems and reduce costs in the process.
- Visual reporting. A driver of change in the financial reporting niche is the need of business owners and executives to have visual reporting. Instead of a long list of numbers and rambling paragraphs, they prefer graphs and charts. That is why vendors are also working to include visual reporting tools in their platforms.
Things to consider when you invest in a SaaS
Infrastructure plays a key role in a SaaS solution. If there is downtime, you would not be able to access the platform. So, you should pay good attention to the system’s infrastructure when analyzing SaaS providers.
Many enterprises fail to ask their shortlisted SaaS vendors questions about disaster recovery, service level agreements (SLAs), and security. These are crucial infrastructure factors that need careful consideration when evaluating a vendor.
SaaS is straightforward to subscribe to. All you need to do is go the website and purchase a suitable package for the required number of users. For this reason, many firms pay attention only to the price of the software and not to infrastructure considerations. They may also think that careful evaluation is not necessary since it is so simple to get started quickly.
But you need to be prepared for situations as such as the SaaS vendor going out of business or their website going down. You need to have contingency measures in place to face these situations to make sure they do not have a deleterious impact on your business. It is easy to subscribe to a SaaS solution, but think about the effect on your business if the solution is withdrawn by the vendor.
FAQs About Financial Statement Software
What is the best financial reporting software?
The best financial reporting software is FreshBooks. It is a cloud accounting solution that has received accolades because of its intuitive features, particularly when it comes to billing. It also simplifies complex processes, making accounting and financial reporting enjoyable. And that is just a couple of reasons why its customers are highly satisfied.
Another factor is the streamlining of work processes by FreshBooks. The solution includes a time tracking feature, thus making it easier for users to generate client invoices. This way, they can be certain that they are billing clients for the right amount of hours. On top of that, the software has an online payment tool. It can interface with third-party payment processors like Stripe and PayPal to make payments more convenient for clients. Of course, it is also convenient for businesses, as they can receive payments easily.
Furthermore, FreshBooks has native mobile apps for iOS and Android. Therefore, users can still work on tasks on the go.
What are the benefits of financial reporting software?
The benefits of financial reporting software are centered primarily on giving owners, executives, and managers a comprehensive view of their financial standing using visual reports.
Visual reporting. Financial reporting solutions are turning towards graphs and charts for reports. This allows users to understand their financial status at a glance.
Faster number crunching. Handling numbers is always a challenge and ensuring that they are accurate is more so. With a financial reporting tool, users can expect on-point currency conversion, number formatting, and round-offs.
Automated workflow. Because of their intelligent foundations, financial reporting software can automate workflows. This is beneficial when managers need to assign tasks and track their deadlines. It can also be helpful in generating regular reports.
Real-time data synchronization. Whenever a line or a number is updated, that change is synchronized with reports immediately. As such, users can always look forward to accurate charts and graphs.
What are the features of financial reporting software?
The features of financial reporting software can vary depending on the vendor. However, there are features that are common and key to every financial reporting tool you encounter.
Basic accounting tools. You would be hard-pressed to find a financial reporting solution that does not have basic accounting tools. As such, you can always find invoicing, income tracking, and expense monitoring features.
Tax management. One of the backbone features of financial reporting platforms is the tax management module. It can include multiple tax rates as well as automatic tax calculations.
Estimates and quotes. If you are always producing estimates and quotes, then you can benefit from templates of such. Financial reporting solutions offer those, allowing you to shave off seconds or minutes from the process.
Multiuser access control. If you have a sizeable finance and accounting department, you may want to have several team members on board the software. With a multiuser setting, you can ensure that they have access to tools that can streamline their work processes. Meanwhile, you can make certain that they only access data and execute certain actions only with permission control.