Looking for a financial reporting tool is not an easy task. This is why we at Toolsmetric are here to help. Cut down the time and headache involved while finding the best financial reporting tools.
Check out our financial reporting tools list to find the right software for your business.
What is financial reporting?
The ultimate goal of financial reporting is to analyze, track, and report the business outcome of a firm. The objective of these financial reports is to evaluate cash flow, utilization of resources, business performance, and ultimately gauge the financial health of a company.
This information allows investors and stakeholders to make informed decisions about how they should manage their business effectively. The best financial reporting tools generate intuitive, easy-to-understand, and insightful financial reports which help you track the financial performance of your business.
Financial reporting has three main objectives:
Track the cash flow of a business
Businesses should have a clear understanding of where their money is coming from and where it is going. Besides, they should be able to identify whether their capital is being utilized optimally.
The answers to these questions are important as they will give you a good idea about how well your business is doing financially. Besides, you will also have a clear picture of whether your business can cover debts and continue to expand at the same time.
Identify and analyze liabilities, assets, and owner’s equity
When you have all the information related to your assets and liabilities, you know what you can expect in the future and what you can modify to do better.
Provide critical information to investors
Investors are a very important component of a business. Besides, they would want to understand how the capital is reinvested and whether it is being invested optimally.
Financial reporting allows investors to evaluate whether your business is the right place to invest their cash.
Financial reporting tools generate these reports which are why they are so important. Besides, financial reports comply with a set of accounting, legal, and taxation requirements, known as the International Financial Reporting Standards.
What is a financial reporting tool?
Financial reporting tools enable businesses to automate the sourcing of financial data and track financial performance and trends more effectively. Financial reporting provides an overview of a business’s financial health and pinpoints areas that are holding back the financial growth of a company.
As mentioned above, financial reporting tools also generate financial reports that are based on the templates provided by the vendors. However, there are many financial reporting tools available that allow users to create custom reports that can be shared across different business departments.
Besides, apart from the conventional financial key performance indicators (KPIs), financial reporting systems also help companies to track and prove compliance with SEC and tax regulations along with travel expenses, return on investment (ROI) calculations for new technologies or projects.
Factors you should consider while choosing Financial Reporting Tools – Buying Guide
Are you looking for financial reporting tools for your company? Or are you looking to join hands with a software vendor so that you can manage your client’s financial books?
First things first, you should have clarity about the things you are looking for in a financial reporting tool. When you are scouting for the best financial reporting tools, you should ask yourself some important questions before committing to one tool.
Here are some of the factors you should consider while choosing a financial reporting tool.
- Customer support reputation
- Types of software
What is the software vendor’s customer reputation?
One of the most important aspects of dependable financial reporting tools is customer service. If you are an accountant, you want answers to some critical questions immediately without having to waste any time.
You do not want to be played around like a ping-pong ball from one customer support representative to another while reaching out to customer support.
You should consider investing in financial reporting tools that offer the best customer support and service. Spend time researching every tool’s customer support by reading online reviews and customer testimonials.
If you are aware of someone who uses a financial reporting tool, you should collect feedback from them.
You should also carry out some additional research to find out the following information:
- Average wait time while communicating with a customer support representative
- Communication channels
- Customer support service locations
- Time zone
- Support hours
Stability of the company
Another important factor you should consider while looking for a financial reporting tool is the overall stability of the vendor.
During your research, find answers to the following:
- For how long has the vendor been in business?
- How often do they add new features or offer upgrades?
- Does the vendor have what it takes to cater to unique requirements and handle unforeseen situations?
Keep in mind that, the more stable a vendor is, the better. In addition, you will also feel more comfortable working with a financial reporting tool vendor when you trust them to handle yours as well as your customer’s financial and accounting information.
On-premise vs cloud
This debate has been going on for a while now. Should you opt for a cloud-based financial reporting tool or desktop accounting software? While choosing the best financial reporting tools, is an important factor that you should not overlook.
When choosing accounting software, you should first identify whether an on-premise or cloud-based software would be an ideal solution for your business. Find out the pros and cons of every software type before you commit to one.
Cloud-based software is completely online and can be accessed through a web browser. All the accounting information is stored in the cloud, which also means that you do not have to worry about losing information if your system crashes.
Another advantage is that you do not have to worry about downloads or new updates as they will be handled on the cloud. The cloud software will automatically back up updates and information for you. It is also easier to access your client’s reports and books if you need them.
If you opt for desktop financial software, you will have to install and store it on your system. Besides you can only access it once it is installed on the device you install it on. Unlike cloud software, you will have to update and back up information manually. This means that you are solely responsible for creating a backup for the most important accounting information and files.
While choosing the best financial reporting tools, select software that fits your and your client’s requirements. This means that you may have to opt for one software over the other based on the features they offer.
To help you in your quest for the best software, create a list of must-have features a financial reporting tool should have. Some of these features are mentioned below.
- Credit card payments
- Bank reconciliation
- Ability to invoice customers
- Ability to track income and expenses
- Recurring invoices
- Bank transactions import
- Multiple login functionality
- Withdrawal tracking and bank deposit
- Payment reminders
We will dive deeper into understanding these must-have features in the other section of this article. When you are going through the features, you should also consider features that will help you and your clients grow.
How expensive is the software?
Another important factor you should consider is the cost. Typically, the cost tends to increase as you add more features. In a few cases, the extent to which you can use a few features is limited.
Toolsmetric allows you to do a price comparison so that you can evaluate how much each software will cost you along with the features that come along with it. Keep an eye out for the hidden costs and additional costs involved with each add-on. Find out whether the vendor offers month-to-month pricing or if you need to pay an upfront annual fee.
Some of the best financial reporting tools provide special pricing for accountants and their customers. You may also want to find out if the tool offers a partner program if you are working with multiple clients. A partner program allows you to get special deals that may be beneficial to you in the long run.
Reporting is an important part of accounting, more so if you are setting up the solution for your customers.
When you are hunting for the best financial reporting tools, consider the type of reporting they have to offer. Besides, also check out how easy it is to access, export, and print reports.
Here are a few types of reporting that you will need:
- Trial balance
- General ledger
- Balance sheet
- Accounts receivable and payable
- Unpaid customer invoices
- Profit and loss statement
Is the software accessible when you are on the move? From different devices? You should find answers to these questions to understand how accessible your financial reporting software is.
As an accountant, you will need a financial solution that can be accessed at any time and location.
While selecting software, you should consider the following to help you understand how accessible it is:
- The ease with which your clients can access the software
- How can you access the software?
- Is the software cloud-based or on-premise?
- Does the software have a responsive design or have a mobile application?
Is the software secure?
It is important that you keep your client’s financial information secure. It should be a top priority for you to ensure that their critical information is safe. This is why you should consider purchasing software that takes security seriously and is transparent about it.
It is important to find out the different security measures that the software vendor is taking to safeguard your and your client’s data. Look up if the vendor has been involved in any type of security breach in the past.
The security of your financial reporting tool will primarily depend on the type of software you opt for. For instance, if you go for desktop software, you may have to protect your data using strong passwords, firewalls, and more.
If you opt for cloud-based accounting software, the vendor will have certain measures in place to ensure that your data is protected. These include two-factor authentication and encryption.
What are the benefits offered by the best financial reporting tools?
Simplified financial processes
In many companies, financial reports are created by individuals who do not have a background in finance. It can prove to be very difficult to provide these resources with proper end-user training for the new software. Thus, you should consider using products such as Excel and Microsoft Word to gather information as these tools are easier to use.
It is important to have the real-time update feature so that you can reduce the overall reporting time and cut down on the time spent on revisions. Besides, to boost your productivity, these updates should be linked to reports and documents.
It is important to understand that applications that charge by report or contributor and those that restrict the number of contributors are not applications you should be looking for.
The best financial reporting tools should be able to automate different reporting processes. These include managing and setting deadlines, delegating responsibilities, managing sign-offs and reviews, sending out alerts whenever required.
With a financial reporting tool in place, you can easily determine how you are spending your money. You can assess whether those expenses are really needed or not. This allows you to cut down on unnecessary expenses and ensure smooth operations of your business.
Top-rated and Best Financial Reporting Tools for 2022
Tech innovations along with the emergence of the cloud have paved the way for an array of financial reporting tools. In this section, we have curated a financial reporting tools list to help you understand which tools are the most popular ones in the market.
Although NetSuite is an out-and-out ERP system, it provides all the tools to make your billing process more streamlined. It is a cloud-based accounting application that is primarily used by small to medium-sized businesses.
The tool allows users to streamline their financial processes such as turning receipts into expense reports and also tracking the billable hours. It comes with different modules that bind together the core business processes.
Freshbooks was regarded as the best financial reporting tool in 2020, and for a good reason. When it comes to providing ease of use and streamlining the billing process, not many financial reporting tools come close to Freshbooks.
The tool allows users to easily manage the key financial processes and also offers special modules to manage taxes and projects.
Spreadsheet Server has made it to the financial reporting tool list for a few good reasons. It is primarily Excel-based automation and financial reporting system that is used to get accurate and real-time information from an ERP and other sources of data.
Spreadsheet Server is used by companies across different industries including manufacturing, construction, and more.
It is impossible to miss Zoho Books in the financial reporting tools list. It is one of the most user-friendly financial reporting tools in the market. It is a smart accounting tool that is primarily used by small businesses from around the world.
If you are looking for the best financial reporting tool to control your cash flow, Zoho Books is a safe bet. The tool comes with a very clean design and a bunch of robust features that allow users to make data-driven decisions.
Again, Xero is a popular financial reporting software that is predominantly used by small and medium-sized businesses. It can be classified as one of the most user-friendly financial tools available in the market.
Xero is packed with all the features one would look for in a financial reporting system. These include billing, invoicing, accounts receivable, time tracking, and more.
This software is another tool that is extremely easy to use. It is safe to say that it is probably one of the first modern financial software. Users can easily manage their core accounting processes such as supplies, customer accounts, item management, and more.
There are a few other financial reporting tools you can use. Just because they are not mentioned in this financial reporting tools list, it does not mean that they are not up to the mark. Each tool has something unique to offer.
Some of these tools include Sage Business Cloud Accounting, Younium, A2X, Budgyt, Vyapar, Buku, and Wrike among others.
Typical features of a Financial Reporting Tool
The best financial reporting tools have some common features that are key for seamless bookkeeping and accounting. Here are some of these features that one should expect from a financial reporting tool.
Basic accounting features
Small businesses can easily handle their accounting needs with a financial reporting solution that comes with basic accounting features including financial reporting, expense, and income tracking, invoicing, and more.
The financial tool should allow you to automate key processes such as billing, recurring payments, automatic billing, and more.
Some of the best financial reporting tools can also allow you to manage your taxes effectively. These include features such as multiple tax rates, tax reporting, and automatic tax calculations.
You can use the pre-built templates that are on offer to create quotes and estimates for clients. These can be easily converted into invoices.
Most financial reporting tools come with multi-user access so that multiple users can use the tool at the same time.
The best financial reporting tools available include a module that helps you generate purchase orders. This enables you to transform quotes and estimates within the solution seamlessly. This ensures that there are no double entries and errors.
What are the current trends in the financial reporting space?
Although financial reporting systems seem like they only help you create financial reports, they now offer a bunch of accounting features. This is why businesses of all sizes are increasingly inclined toward using financial tools to help them manage their finances.
These tools can consolidate different systems and minimize overall costs in the process.
Visual reporting has emerged as one of the most important features that have transformed the financial reporting landscape in many ways. Visual reporting provides executives and business owners a clear understanding of the financial health of their business.
The visually appealing reports that include a myriad of graphs, charts, and other graphical representations make it easier to view financial statements.
Move to the cloud
Cloud-based financial accounting tools are becoming increasingly popular for a bunch of reasons. SaaS-based financial tools have become very popular around the world, driven by faster deployment rates, relatively lower costs, minimum maintenance requirements, and more.
By now, we hope you have understood what financial reporting software is and what it offers. We have taken a look at its key features, average costs, and how the recent trends have gripped the financial reporting space.
Compare the best financial reporting tools on ToolsMetric to find the right tool for your business.