How to Choose Budgeting and Tracking Software

If you think about it, most budgeting tools perform the same tasks, such as budget preparation, expense tracking, financial performance monitoring, and forecasting. What makes them different though, are the features they offer. Each vendor comes with a unique combination of product features, which allows you to find a product that addresses your main concerns but also leaves out the unnecessary features.

Before you start choosing budgeting and tracking software for your business, consider where you stand on the following questions.

• What is the size of your business? Is it a small, mid-sized, or large business?
• How many employees do you have and how many of them regularly submit expenses for reimbursement?
• What accounting applications do you currently use and how important is it to link those to your budgeting software?

If you run a startup or small business, you need a simple product with a user-friendly interface. In addition, the software should be able to automatically generate easy-to-understand financial reports in the form of charts and graphs. Since startups lack historical records, they cannot fully utilize a system with advanced financial forecasting capabilities.

Companies that often need to track and approve employee-initiated expenses should look for a product that enables their employees to create and submit reports for work-related expenses. For instance, employees should be able to take a snapshot of receipts, scan and attach those to the expense report, and submit it directly from their mobile phone for quick approval.

Taking this a step further; some expense tracking applications use Optical Character Recognition (OCR) technology for fraud detection. This also helps convert the scanned receipts or documents into searchable and editable documents, allowing users to add or delete certain expense items and even leave comments. More advanced products pull expense data directly from an employee’s credit card and automatically transfer the reimbursement amount to their bank account.

If you’re planning to involve multiple users in the budget creation process, look for a product that offers document management and version control. This allows multiple team members to work on a document simultaneously. You can also store different versions of the budget and track all changes made to it.

Budgeting software for mid-sized and large businesses should have the capability to forecast future sales and expenses based on historical data. Some solutions analyze overall spending, generate reports on spending trends, identify cost savings opportunities, track cash flow, and forecast future expenses.

More advanced products can find out how a single budget variable could impact your overall financial outcomes. For instance, you can run a what-if scenario analysis to determine the possible outcomes of inflation.

Larger organizations with multiple departments and offices in different locations can benefit from a solution that can import data from external applications. They need a product that easily integrates with their existing accounting, time tracking, and workforce management software. The software should also have the capability to organize budgets by project, department, and location, handle various types of expenses and revenues, and perform advanced analysis such as Monte Carlo simulation and two-way sensitivity analysis.

Benefits of Budgeting and Tracking Software

The right budgeting and tracking software can benefit a business in many ways, such as:

• Helping avoid costly human errors – Most budgeting programs automatically import financial data from your accounting applications. In addition, some programs send automated reminders to make sure users do not forget to key in business information for budget analysis. This helps eliminate calculation errors and manual data entry errors and improves the overall accuracy of your budgets and financial plans.
• Improving productivity – Budgeting and tracking software helps streamline the work-related expense approval process, which in turn increases productivity. For instance, employees can capture images of receipts rather than having to maintain paper receipts, while the ability to view all financial data from a single dashboard helps managers to track expenses more easily.
• Saving time on budget creation – The right software also makes collaboration during budget creation easier and faster. You can store and reuse financial data for several years, which makes budget creation less hassling and more time-saving.
• Helping predict future outcomes – Using the right budgeting software, you can analyze your company’s past financial records to identify patterns and predict future revenues and expenses. You can also use the software to perform risk assessments and identify cost-saving opportunities.

Overall, budgeting and tracking software is beneficial for any business looking to establish realistic budgets and track financial accounts.

Types of Budgeting and Tracking Software

Different types of budgeting and tracking software can be tailored to support a wide range of businesses. Both enterprises and small businesses can use this software to make zero-based budgeting simple, manage their financial accounts, and plan and create budgets. Budgeting and tracking software can also be beneficial for newly established companies, as they provide an efficient way to track startup budgets and bill payments. For nonprofit businesses, it provides a well-structured method to monitor cash flow and accounts.

The software’s budget forecasting features can be useful for project and event management as data can be manually submitted or automated to predict spending. A company of any scale can manage and track its finances due to the wide range of free and paid software versions.

Common Features of Budgeting & Tracking Software