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5 Min. Read

What Is a Financial Management System?

Financial management systems are a vital component of any business. They allow you to track the money coming in and going out. Plus, you can track your assets and liabilities, assess the performance of your organization and more. They can do all this while saving you time!

Yet, when it comes to choosing the right financial management solution, there is no clear answer.

The best financial management software can vary depending on your business and reporting needs. One thing remains constant. You need efficiency to maximize productivity with minimal hassle. This article will discuss everything you need to know about financial management systems. You'll also learn some of the best financial management software available today.

Here’s What We’ll Cover:

All About Financial Management Systems

What Is the Difference Between Financial Management Systems & Financial Management Reporting?

Top 2 Financial Management Software

Key Takeaways

All About Financial Management Systems

FMS are tools for monitoring all the financial transactions of an organization. They track customer payments, purchase orders, vendor invoices and more. They also provide explanations for financial activities and financial statements. This helps employees have a better understanding of costs/revenues within your organization.

There are three main categories for financial management systems:

Accounting Systems

This is where all the financial transactions are logged, organized, analyzed and reported. They can be highly detailed with different accounts for specific items. They can also be broad with only a few generic accounts. It'll include cash flow, cash management and revenue management.

Payroll Systems

As you may have guessed, this system tracks employees' paychecks and their deductions. It also keeps track of any new hires, terminations and more.

Managerial Systems

These systems focus on management reports instead of reporting everything. They are great for providing your managers with real-time information about their departments. or what's happening throughout the entire organization. This can help them make better decisions, improve employee morale and increase productivity. Here you'll find inventory management, supply chain management and more.

These three categories are used to group the various reports your FMS will produce. Each of these groups has its own benefits and drawbacks. It's important to understand what kind of reports you need. You should consider this before choosing a financial management software package.

What Is the Difference Between Financial Management Systems & Financial Management Reporting?

This is a common question for most people who are new to accounting and financial management.

Financial management systems track the money coming in and going out of your organization. They keep track of assets and liabilities, giving you a better idea of how well your company is doing. Financial Management Systems provide great insight into what's happening within the company. Financial management reporting focuses on communicating this information. This info is primarily sent to other businesses or people with an interest in your organization.

The best financial reporting software is more than just a report generator. It will allow you to send out company alerts, create reports and even automate the entire financial process. It comes with advanced features like digital signatures and electronic approvals. Understanding what kind of reports you need is vital when choosing FMS.

Top 2 Financial Management Software

1. FreshBooks

If you're looking for an easy-to-use accounting system, look no further than FreshBooks. FreshBooks make it easy for small businesses to send invoices, track time and get paid. It also features smart reports with real-time insights. These allow you to see things like how many hours your employees are billing. It also shows what percentage of revenue comes from recurring subscriptions. This is just the tip of the iceberg when it comes to what FreshBooks can do.

In general, FreshBooks is an excellent option for businesses that need a simple accounting software package. It does not have all the features you get with Quickbooks. It's relatively inexpensive and very easy to use. If employees or managers can create their own financial reports, you don't need an in-house expert. This can save you a lot of money.

2. QuickBooks

Quickbooks is one of the most popular financial management software packages available. It's used by over 10 million people around the world to manage their finances. Quickbooks offers excellent reporting features. It provides intuitive navigation so that employees can access it immediately after installation. This makes it perfect for both the back office and front lines. Track accounts payable and accounts receivable. It makes spotting accounting errors much easier.

It comes with a wide range of financial management reports as well. It includes tools for automatically generating those reports. It also boasts some excellent project management features. These allow you to keep track of your projects from start to finish. There are even CRM (Customer Relationship Management) capabilities within Quickbooks. This gives managers access to a wide range of information about their clients.

Key Takeaways

There are a lot of financial management systems out there. Choosing the right one can be difficult. Before you buy financial software, make sure you know what kind of reporting capabilities you need. Different companies will need different levels of reporting and analytical tools.

Once this is done, look into what each financial management system offers. Compare the features of each system. Make a decision based on your specific business needs. If you're still unsure about basic accounting, consider hiring a finance professional.

Hopefully this article gives you some great insight into the best financial reporting systems and how to use them.

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