The most challenging and time-consuming task that chief financial controllers or officers have to do is to predict the financial future of the business. The same is the case for senior financial analysts as they too have to do the same task. It’s among the most crucial functions they have to perform as every big decision requires an understanding of future events.(Software Picks of 2023)
Financial modeling can be done by using regular Excel sheets. However, this will be a manual process and won’t offer accurate and timely results. Therefore, almost every major SaaS company is investing big amounts to get financial projection software.
When it comes to getting financial projection software, you need to know the answer to a few questions. These questions are:
- What must your financial projection software do?
- Which one of the software packages is suitable for you?
- What kind of investment does this software take?
Understanding Financial Forecasting
The financial projection is the prediction of future events based on current market trends. A skilled financial analyst will select a model that matches the available data and predict future events.
The key problem you will have to face in this projection is uncertainty. You cannot predict the financial status of your business with certainty. You can only make assumptions based on the available data. A seasoned manager can make more accurate assumptions but still, they are not considered as certain.
The best way to deal with these uncertainties is to opt for scenario planning. Scenario planning focuses on considering numerous future visions and then modeling every scenario. If done correctly, you will observe the future in upcoming weeks and then match them with your predictions. This will help in figuring out which scenario is more accurate.(Software Picks of 2023)
Let’s say your MRR is rising steadily every month and you will make a baseline model where you are expecting to raise your MRR by 5%. You will now make different scenarios and then focus on modeling every scenario. You will first imagine the MRR will rise by 5% at the end of the year. Then you will opt for a broader scenario and consider a 7% rise.
Then you will go with a much broader scenario where you are expected to raise MRR by 10%. Similarly, you will make different scenarios for higher or lower MRR. Then you have to check the actual rise after a few months and analyze which one of the predictions was more accurate. In case you don’t get the expected results, you will have a strategy to deal with it.
This is where financial projection software comes into play. Let’s say if it takes you 50 hours to build a single model, it will take a lot of time to finish all the models. You cannot spend years running your financial projections models.
This is when financial modeling software joins the party. Models should be accurate and timely. Having enough information is required to make good decisions. However, these decisions should be timely as well.(Software Picks of 2023)
Anticipating Financial Futures: Financial Forecasting Software
Software Picks of 2023
Financial projection software helps businesses plan their resources and strategies to support future events. If you manage to get a good software program, it will be helpful for every department of your company.
For example, a manager can use this software for high-level financial forecasts. Accountants can use these tools to draw up budgets, income, and financial statements. The HR department can use it to plan the hiring system.
Almost every accounting tool can offer budget options as by financial projection software. However, the core feature it offers is accountancy which is neglected by most of the accounting department. Therefore, you need a separate financial forecasting software tool for your SaaS company.
Key Considerations for Financial Projection Software Selection
Software Picks of 2023
What must be present in your financial forecasting software will depend upon the nature of the business, market situations, size of the business, and other factors. The universal features of every financial projection software are:
- Input and output data directly from accounting software and data files.
- Automatic and manual projection and scenario options
- Transparent projection functions
- Pull information from financial statements
- Features to monitor changes
- High-quality data visualization
Roles and Expectations of Financial Projection Software
Every financial projection must be able to perform the following functions.
- Fine-tuning your business plans and strategies
- Producing budget templates as per your requirements
- Retaining numerous budget versions
- Tracking historical budgets and assisting in future forecasting
- Comparing forecasted and actual figure
- Combining budgets of all departments of your company or firm
- Planning for What ifs in your forecasts
- Monitoring the performance of the budget process
5 Leading Financial Projection Software of 2022
The following section has details about the top 5 financial projection software. Let’s delve into these details.(Software Picks of 2023)
Flightpath by Baremetrics: Software Picks of 2023
It’s a full-service software tool with all the features you need to project changes in your revenue and expenses over time. You can opt for completely automated projections and manual scenarios as well. It can conveniently connect with your accounting software and load and interpret the data you need. also provides you with ancillary functions to improve main projections.
starts at $1000/month.
Businesses are evolving rapidly, therefore you need to evolve your strategies as well. You can achieve your goals and reduce risks by automating several processes such as budgeting, planning, and reporting. Prophix can help you in doing so. By opting for this tool, you can choose from both cloud-based and onsite solutions.
Prophix pricing is not transparent. Across 67 reviews, it has a rating of 4.5/5 on Capterra. The big positive point about this tool is that it is upgrading and evolving continuously with the changing trends. The negative point is that it is not transparent and offers no data visualization.
Looking for financial projection software that offers an all-in-one solution for budgets, forecasts, and reports then Jirav is the tool you can go with. It is quick and easy to implement in your firm. Its interface can meet the requirements of a company of up to 500 employees. It can integrate with other accounting solutions to reflect the progress from the time you implemented it.
The pricing plan for this software starts from $250/month however, to access most of the useful features, the $850/month plan is recommended.
With 12 reviews, it has a rating of 4.8/5 on Capterra. Its customer solutions are a big plus point but visualization is not enough.
This software program can take your forecasting, budgeting, reporting, and planning to an extremely new level. It has a very familiar interface that makes it easily understandable and implementable. You can configure this tool to create customized calculations and adapt them according to your evolving requirements.
This software program doesn’t have transparent pricing. However, according to Capterra reports, it starts from a $15,000/month plan. On the same platform, it shows a 4.5/5 across 173 reviews. The positive thing is that it offers a powerful interface and is adding new features constantly. However, users report that it’s difficult to do the initial setup.
Connecting all your departments and existing systems while using previous data to plan your finances will be a nice thing. Vena can help in doing so. This software program combines integrations and planning abilities with a familiar Excel-like interface. It allows all your departments to cooperate effectively toward shared company goals on a platform with no curves. It’s flexible, scalable, and easy to use.
It has a rating of 4.3/6 on Capterra across 13 reviews. The positive point is that it’s easy to use, however, it often slows down when uploading data.
Get Help from Flightpath
Flightpath by Baremetrics provides your SaaS company with everything it needs to grow at the early stages.
Flightpath helps in monthly and annual planning through scenario planning and cash flow monitoring. Register now to enjoy its trial.