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A look into the evolution of FMS

Stringent financial accounting processes are at the heart of every business, ensuring the smooth flow of money in and out of the business. This not only keeps the organization working, but ensures maximum profits. With the pace and scope of the world of business increasing on a daily basis, more and more organizations have turned to Financial Management Systems (FMS) for help. FMS provides enhanced visibility into financial status and performance, and increased control over everything finance related to deliver tangible value to the rest of the organization. For those who are yet to realize the benefits of an FMS, what exactly does an FMS do and how can it benefit businesses of all shapes and sizes, across multiple industries?

A definition of modern Financial Management Systems

Put simply, an FMS is the software used by a business to integrate and consolidate all financial operations, data, processes and procedures within a single, centralized system. At its most basic level, an FMS manages cash flow. However, in reality, FMS systems of today have evolved to become so much more than this, transforming from what was basic, back-office software into comprehensive, mission-critical systems. Modern Financial Management Systems connect with other organizational systems, spanning all business functions and departments to provide a centralized, real-time view of all financial information. This increases financial visibility, control and business agility, giving decision-makers the right information at the right time. This in turn creates rapid, robust decisions for maximum profitability and long-term sustainability.

Encompassing nominal ledgers, payable and receivable ledgers, consolidations and debt management to name a few, a financial management system amalgamates financial information from across the business. This ensures that a single version of the truth is available to all and presents the information in accessible, easy-to-understand reports. What results is a powerful solution, capable of handling multi-currency transactions, as well as being able to determine tax obligations. Compliance is thus ensured across multiple local regulations, and profitability is optimized while still retaining to grow alongside your business. In short, the right FMS provides an all-important competitive advantage that all businesses are so keen to find these days.

What can a modern Financial Management System do for my business?

The best solutions streamline, accelerate and enhance the entire finance and accounting function. They provide instant access to all financial information for fast, effective financial management and decision making. Because all financial information is held in one, central system, maintaining departmental-specific systems and solutions is a thing of the past. There's no longer any need to manually consolidate information from across the business, which was once an incredibly time consuming and error-prone process. This automation results in increased accuracy and major efficiency savings, with finance staff freed-up to focus on more value-adding, strategic activities for the good of the business. Increased automation is one of the key drivers behind this, and one of the major benefits from investing in a robust FMS.

An eye on the future of Financial Management Systems

The reporting capabilities of leading solutions make all the difference too. Reports can be tailored to suit the specific needs of the business, with accessible reports providing real-time information and insight from across the business. These include drill-down functionality, helping businesses to explore data further still. The ability to forecast potential scenarios based on precise financial information leads to increased forecasting and planning accuracy. This enables businesses to better predict and manage growth, as well as helps with seizing any growth opportunities.

The transparency provided by the right FMS is another major bonus for businesses. With the consolidation of information into a single system, it becomes much easier to trace data across the organization and beyond. Meanwhile, reductions in system complexity create a streamlined and much more easily managed business. Regulatory compliance is a key benefit, with the best systems able to cope with regulatory requirements across territories and different industries at the click of a button.

Flexible in the cloud

The scalability and flexibility of a good Financial Management System are two more reasons why more businesses are investing. Legacy systems need time, money and effort to maintain, and are often only as good as the people operating them. Not to mention that they're often too rigid to grow alongside a business as it evolves. The flexibility and scalability of modern solutions mean that they nurture growth, rather than stifle it. Cloud-based solutions increase this flexibility further still, with the software vendors responsible for upgrades and patches etc., leaving your in-house team more time to focus on adding real value to your business.

With new, disruptive forces at play and new, tech-savvy competitors appearing on a regular basis, businesses need to do their utmost to maintain a solid competitive advantage. With the right Financial Management System in place, businesses can align financial processes to best practice right across the business. In turn, they can secure valuable efficiencies and add real value to the organization. Financial management systems put in place strong financial and operational foundations, helping you to meet the ever-increasing demands of a global digital economy.

For more information on how an intelligent Financial Management System could make the difference to your business, get in touch with Sapphire Systems.

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