How To Choose The Best Financial Forecasting Software For Your Parent Company And Subsidiaries
Groups of companies, consisting of a parent company and multiple subsidiaries, have more complicated and nuanced financial forecasting requirements than unitary Ltd or plc companies. It’s not just the need for statutory financial consolidation, but also the need for budgeting and reporting individual companies in both ‘local’ and ‘group’ formats.
Company groups tend to evolve organically through mergers and acquisitions, so it is not uncommon for the parent company and subsidiaries to have radically different accounting and forecasting processes, with different data storage practices and a range of un-integrated software applications. Needless to say, this diversity and decentralisation make it difficult and time-consuming to create responsive financial forecasts and budgets.
A budgeting and forecasting platform, such as Corporate Planner, can provide better oversight over shared financial accounts for parent and subsidiary groups, by working in both local and group reporting formats, thus avoiding the need to completely overhaul the working practices and infrastructure of constituent companies and departments.
However, to achieve these ‘group needs’, it is important to choose the right software solution. So, what questions should you ask when comparing financial forecasting applications?
Will The Platform Work For Your Team And Subsidiaries?
It is essential that your chosen forecasting software works – in both group parent company and in subsidiaries, meeting seamlessly the needs of both, e.g. for ‘local’ and ‘group’ reporting. For example, the user interface should be easy to understand and use, accessible to everyone, and able to handle multiple charts of accounts and reporting formats. If it is unnecessarily complex, staff may not use the software to its full potential and may be deterred from using it. It may also create resistance and resentment within your subsidiary companies if the new platform requires them to make unnecessary changes in working practices that, to date, have worked perfectly well.
Will The Platform Meet Your Accounting And Reporting Needs?
The forecasting software must be able to meet your forecasting needs. Whether you require a short-term or long-term forecast or are predicting demand for a new product or service, your chosen software solution should be flexible enough to allow you to make predictions with confidence, both as a holistic company group and broken down by constituent company and department. The platform should also let you test your financial forecasts against a range of different scenarios, so you can prepare your business’s response, including contingency planning should the future not pan out as you expect.
The level of detail required will be different at the local company and group levels. The software should be capable of handling this, along with different reporting formats, all in a dynamic and seamless manner.
Will The Software Integrate With Your Existing Systems?
Forecasting software must seamlessly integrate with your existing systems so you can import data from them without difficulties arising. This is not always straightforward with parent and subsidiary groups, which may use a wide variety of incompatible file types and data silos, so check with your forecasting/reporting software vendor about what support is available to manage the transition while retaining data integrity and accuracy.
A seamless transfer of data enables you to spend more time focusing on generating accurate forecasts, instead of manually entering reams of data from each company group and stakeholder, which could result in oversights or errors being made.
Will The Software Offer Flexible Modelling And Forecasting Capabilities?
The best forecasting software for businesses should be capable of modelling all the key variables that affect financial planning, from the effects of internal management decisions to the consequences of external financial or market-driven factors. You should be able to gain a detailed insight into the potential impact of different factors on the performance of your parent and subsidiary companies; in this way, the forecasting software will represent the most realistic and accurate expectation of future outcomes.
Will The Same Software Also Deliver Statutory Financial Consolidation?
The best financial forecasting software will also offer an integrated financial consolidation module. The benefit of this is that data needs only to be imported once and that a single platform can provide everything from integrated financial planning and reporting to statutory consolidation. The chance for error is reduced and there are significant process time and cost efficiencies to be gained, including by needing to learn, implement, and pay for just one system.
Is The Forecasting Software Secure?
Large businesses and multi-level corporations have more numerous points of access and vulnerability for cybercriminals to exploit. So, finally, ensure that the forecasting software features robust security tools to keep your business data safe and secure – an especially important concern with widely distributed and decentralised company groups. Data loss or a breach in one subsidiary can have wide repercussions that ripple across the entire company group.
Contact Us For A Free Demonstration
For a free, no-obligation demo of our industry-leading forecasting software platform, Corporate Planner, please get in touch with Account-Ability today.
Image Source: Unsplash