Top 3 considerations for FP&A software

Automation is an undeniably important feature of an FP&A tool. It's also overwhelmingly lacking within most legacy tools. Not only does automation eliminate a significant amount of busy work that's common with legacy accounting tools, but it can also get you much closer to real-time views of your clients' businesses.

Notably, the more manual your approach, the more time you'll spend creating dashboards to manipulate data. This can (and will) take a large bite out of your potential revenues. 

This is the true value of FP&A tools that are built with automation in mind. As they reduce the amount of busy work you need to do, they free up the time you can spend on other tasks. They also increase the amount of bandwidth you will have to take on more clients. You can view FP&A automation as an essential way to increase the number of high-value services that you can offer, making you much more profitable.

Legacy tools like Excel have certainly made leaps and bounds in ease of use over the years. However, the primary issue with these tools is their UI has changed little from the early era of graphical user interfaces. In effect, these tools require you to apply modern approaches to financial forecasting with a basic UI that predates most millennials. 

What's more, legacy tools require far more hands-on programming than modern software built specifically for FP&A. Take Excel, for example. You'll likely need to spend hours creating macros using Visual Basic. And because each client's needs are different, simply creating one macro or copying and pasting someone else's code likely won't be enough. 

The key is in this statement: Different people want different things. 

Each client will have different needs. The more complicated the accounting tool, the more challenging it will be to create dashboards that help you tell those clients the story they need to hear. Ideally, your biggest problem with financial planning and analysis should be how to design each forecast for each client and not how to get past frustrations with the tool.

You can't change the software if it's your primary roadblock. And don't count on the software company to fix built-in design flaws overnight. When creativity is your biggest issue, there's a wealth of information available to help you learn how to create the forecasts you need, especially if you're using a tool that offers up a large library of videos and content that show you how to do it.

The fintech space is exploding with tools designed for CPAs to perform financial planning and analysis tasks like financial forecasting. Not all tools are created equal, however, and not all tools put their development time into the quality of the tool's functions. 

There are many tools available right now that don't offer the flexibility on the balance sheet that people need. Many of these tools will get "cute" with what the deliverable looks like, but disregard the overall impact of the analysis. For example, the formulas needed in Excel to forecast the impact of the income statement and other balance sheet accounts on cash are difficult and require a lot of maintenance. Several forecast tools do this important function very well.

Do you want the output to look good when you push it out to the client? Of course. Nevertheless, some FP&A software developers spend an extraordinary amount of time on visual dashboards that look great but have little informational value. 

The best tools for financial planning and analysis will be both robust and turnkey. If you need to get a dashboard together for a client in a specific industry, you want to be able to build it in a couple of hours. You want important top-level data like cash to be correct. Then, you want to be able to set it and forget it. 

From there, you need the flexibility to analyze and project for the important parts of the business, especially the parts that warrant deeper scrutiny. You want to have your analysis correctly mirror how each client's company works. And specifically, you want to be able to do that without having to dedicate more time than you can afford. 

At Summit CPA Group, we strongly believe in regularly assessing the effect of our tech stack on our KPIs. While we don't hop from tool to tool all the time, we place a large amount of value on researching tools regularly to determine if changing what we do will help us get the job done better and faster. 

Of the tools in our tech stack, PlanGuru and Jirav have among the longest tenure. Built from the ground up around forecasting, they are incredibly robust for FP&A and especially for financial forecasting. They also play nicely and integrate with many legacy tools you may already be using with clients, including QuickBooks and Excel. 

Financial forecasting is now a must-have for CPAs and CFOs. But more important than offering FP&A is providing clients with correct and actionable information. Take a wide view of your existing tool set. If your tech stack is not offering you or your clients the value they need, it may be time for a change.