Best Financial Planning Software & Tools

What is Financial Planning Software?

Financial planning software, also known as liquidity management, liquidity planning or treasury management software, helps companies manage the funds needed to pay employees, suppliers, or shareholders. This type of software can be used to manage financial risks in the context of liquidity. Investments and debts can be monitored and forecasts can be made. Using financial planning tools, companies can comprehensively control their ability to meet specific payment obligations. These facts usually have a significant influence on a company's financial strategy.

Good financial planning software has the following key features and advantages:

• It simplifies cash management processes across multiple business areas. Often, they provide integrated budget planner tools to help users monitor their revenues and tasks.
• Financial software allows plans for internal and external liquidity planning and development to be defined. By setting savings goals, the software can make individual recommendations.
• It supports those responsible in complying with local and global financial standards or regulations.
• It offers forecasting capabilities to identify liquidity development.
• It provides an overview of cash positions and liquidity through dashboards and reports.
• It helps manage various types of risks, such as currency and interest rate fluctuations.
• It offers a holistic perspective on risks and opportunities related to cash management.
• In a business context, financial planning software supports strategic business planning by allowing various financial scenarios to be modelled and analyzed.
• Financial advisors can access the data stored in financial planning software and develop tailored strategies to achieve the company's goals.

These are popular financial planning software:

• Agicap

• FinanceGeek

• Board

• Tidely

• Adam

• flowpilot

• Helu

• finway

• KUNO

How does liquidity planning software or financial planning software work?

Software for financial and liquidity planning can, as the name suggests, provide significant support for related tasks. In a company's financial plan, the expected revenues are compared with the expected expenses in a certain period. The aim is to determine the profit. At the center of this process is the profit and loss statement (P&L) for a specific period, typically a fiscal year. Normally, the P&L is accompanied by ancillary calculations or detailed planning, such as sales planning, investment accounting, financing planning, and personnel planning. Larger companies sometimes break down the financial plan into (business) areas or cost centers. In some cases, there is also an ancillary calculation for accruing taxes on earnings, which can be more or less complex. The budget balance is also part of budget planning. Financial planning software supports this process with specific algorithms and organization features. The focus of liquidity planning is to determine the future cash flows of a company, which are compared in a systematic format. It hardly needs to be explained that doing this efficiently without software support is almost impossible. The task of the liquidity plan is to represent the future available liquid funds of a company, i.e., the liquidity stock, on a specific day. Liquidity planning is the task of the treasury department. These experts are responsible for planning, controlling, and processing cash flows. The sources of information for planning liquidity and monitoring it are the company's bank accounts, which are usually linked to the software. Comprehensive liquidity planning cannot function without specific assumptions of budget planning. Both areas are closely related, which is why a strict distinction between financial planning tool and liquidity planning tool can hardly be made.

What are beneficial functions of financial planning software?

• Global, cross-bank, and coordinated visibility of cash, commodities, and other assets. Minimizing the effort for budgeting by automatically tracking expenses.
• Internal, centralized management of bank transactions, including balance information provided via standard formats like SWIFT or BAI.
• Cash forecasting and financial hedging tools to create better forecasts and models.
• Managing derivatives, debts, stocks, intra-group loans, and other financial instruments used for financial restructuring or hedging.
• Analysis of bank fees and account details that can be confirmed and reconciled with existing plans. The presentation of expenses and revenues is simplified in graphs for clear visualization.
• Process and workflow mapping for all relevant operational and financial risk issues for the respective regions.
• Access to market data to support financial transactions and cash flows.
• Among other things, financial software supports [company founding](https://omr.com/reviews/contenthub/company founding-checklist) by analyzing the business model.
• Access to market data to support financial transactions and cash flows.
• "What-if" and predictive scenario testing features for depicting potential valuation and cash flow risks.
• Integration with supply chain and procurement if cash management is closely linked with supplier management, as well as consulting software integration for individual financial strategies and planning.

What are the benefits of a liquidity planning tool?

1. Increased productivity A liquidity management system effectively channels the usually time-consuming gathering and management of information as well as manual processes in payment transactions into structured, and even automated paths. Ultimately, this significantly increases overall productivity in day-to-day business. Data transfers are automated, information is easily available throughout the company, and processes are standardized. Due to company-wide integration and automated payment authorizations and budgeting, there are fewer risks of internal bottlenecks, and those responsible are less dependent on the willingness to provide information from individual areas.

2. Reliable real-time data A financial planning tool gives those responsible an overview of all financial data and enables reporting based on real-time data. Via the constant availability of essential information and corresponding reports, finance departments can optimize their disposition or their cash and liquidity management, whereby past cash flows are very easy to integrate.

3. Reduced error rate Financial planning software enables largely automated data collection and data verification. Manual entries are hardly an issue anymore. This significantly reduces errors.

4. Restriction of bank and foreign exchange fees With the help of financial planning software, transaction and forex fees are very transparent. Thus, users always have an overview and possibly the opportunity to switch banks and reconcile balances to keep costs low.

5. Transparency and control With liquidity planning software, users receive a high level of transparency for all data and transactions. This gives those responsible a complete overview of essential information and payment movements. With an appropriate system, it is also possible to set up specific control mechanisms for certain tasks for all users. These audit trails can, if desired, also include communication with banks and payees.

6. Flexibility The added value of liquidity planning software should not overlook that it allows integrating different banks and various accounts in one system. Companies use a central interface for different banking options and are always able to change providers without jeopardizing productivity. Treasurers operate independently of banks and have total control over their funds and all transactions.

7. Risk minimization and compliance A liquidity planning tool optimizes risk management almost automatically just by centralizing corresponding processes. It also helps to comply with existing laws, requirements, and standards. If financial planning software that is used across the company is in place, it ensures that the rules prescribed there are complied with across all responsible areas - even with staff changes or even legal changes.

What types of financial planning software are there?

Treasury management software can vary in complexity and functionality. Some solutions focus primarily on cash flow management for SMEs, while others specialize in liquidity management for large corporations. Usually, this type of software needs to be integrated with accounting software and ERP systems to collect the financial information required for liquidity management. Since liquidity is a significant indicator of a company's financial performance, treasury management tools are often integrated with corporate performance management software. Basically, there are two types of liquidity planning software: locally hosted and cloud-based systems.

• Local systems, sometimes also known as installed liquidity planning software, are either developed internally or bought from trusted third-party vendors and then installed on local servers. This option offers more control over functions and security protocols since the system is exclusively used by your own company. The downside? Companies with such custom solutions require outstanding third-party support or qualified IT experts on-site to ensure that the respective system works properly in the long term.
• Cloud-based solutions are the other option. These Software-as-a-Service implementations (SaaS) offer a range of benefits, such as quick deployment, high availability, and integrated provider security. For companies that have no qualms about outsourcing their financial data, they often form the optimal solution.

What should I consider when choosing a financial planning software?

For many entrepreneurs, freelancers, controllers, or accountants, the use of professional liquidity planning software is a must to ensure sufficient efficiency in specific financial operations. All initially face the following question: Which is really the best financial planning software for my needs? An individually developed solution obviously always offers the best conditions. Those who cannot or do not want to have such a solution created face a choice among an almost innumerable number of applications with varying complexity. To find the optimal solution for your own company, it is important to proceed systematically. If you clearly define what you actually need, i.e., what scope of services is necessary, you are very close to the perfect liquidity planning software. The following questions should be answered in this context:

• What intervals are important for planned and actual data?
• Should a link be established to other software - and if so, to which one?
• Does the liquidity planning software need to be multi-user capable?
• Are access rights important?
• Which legal requirements must be met - can the software in question do this, for example, in terms of data protection (GDPR)?
• Is advice and introduction desired/necessary?
• What type of long-term support is desired?
• Should the solution offer the possibility to create simulations?
• Does the financial planning software possibly need to be expandable?
• What may the system cost?