Financial software for business does more than just simplify management processes – it's a powerful aid to decision-making, says Jeff Cates, managing director at Intuit Canada.
"Financial management software turns data into information," he says.
Businesses using lower-tech tools like spreadsheets may be able to record reams of data, but may not be using that data to their full potential. With financial software, businesses can, as an example, quickly identify which customers haven't paid in 60 days, so they can take action.
Software programs can generate reports that provide insight into business finances, from expense trends to sales by customer, and that enable better business decisions, Mr. Cates says.
Cash flow, managing costs and invoicing/billing are key areas of financial management. Beyond these essential categories, software tools exist that can support deeper financial analysis and forecasting. That can include calculating optimal selling prices for goods and services, or the amount of capital needed to get a new venture off the ground.
Amber MacArthur, a technology writer and co-host of the BNN show App Central, runs a social media consulting business in Toronto. She uses a web-based service to send invoices and track payments. The service can also help businesses track their employees' time, so they can bill more accurately, she says.
All business owners face three core problems – how to save time, money and reduce stress, Mr. Cates says.
Financial management technology addresses all these issues, by adding a high degree of organization to tasks that either eat into owners' schedules or simply escape their attention, he says.
Small business owners devote almost seven hours a week to managing finances – roughly double the time they ideally want to spend, a 2011 survey by Angus Reid found.
Financial software can be deployed to manage accounts payable and accounts receivable, and to handle payroll. Businesses can use the tools to track sales and expenses, create invoices, and capture transactions from their bank, customers and suppliers.
Mobile business-software technology is growing fast, particularly in the area of payments, Mr. Cates says.
“You can use an iPhone and a swiper device to do a credit card transaction, and then have an invoice e-mailed,” he says.
Already, 25 per cent of small business owners use mobile technology to manage some business-related activities, from online banking to inventory management, the Angus Reid survey found.
As the same survey noted, businesses that use financial management software also tend to be satisfied with the quality of their financial reporting and analysis – 72 per cent say so compared with 59 per cent who don't use the software.
These tools also change the nature of the relationship with a bookkeeper or accountant, – yet another benefit, Mr. Cates says. "Rather than having them do costly data entry, you can have a more strategic conversation about the business."