Financial Management Systems
Get the best financial management systems for your business. Compare product reviews, pricing below. Read our buyer’s guide for more help.
Financial Management Systems Buyer’s Guide
What Are Financial Management Systems?
Financial management systems help business track income and expenses and plan for growth. Commonly referred to as accounting software, financial management systems are designed to help businesses make better spending decisions, create accurate financial reports, and manage assets. These systems also have some human resources management, inventory control, and billing and invoicing functionality.
Financial management solutions are often an important part of enterprise resource planning (ERP) systems. Larger businesses benefit from an all-in-one ERP solution to handle finances in addition to other business functions all from one system. You won’t have to spend time switching between systems to find the data you need.
Features of Financial Management Systems
Common Features
| Feature | Description |
|---|---|
| Financial Accounting | Revenue and expense tracking. Modules include general ledger, accounts payable, and accounts receivable. |
| Billing and Invoicing | Create and send invoices and bills for products and services rendered. Track outstanding and paid invoices. |
| Financial Reporting | Create financial statements for internal or external use. |
| Human Resources | Manage payroll, employee benefits, certification and licensing tracking, and applicant tracking. |
| Fixed Asset Management | Track the value of depreciating fixed assets. |
| Inventory Control | Track on-hand inventory assets and the costs associated with them. |
Advanced Features
| Feature | Description |
|---|---|
| Budgeting and Forecasting | Create financial plans using historical data and estimates of future market conditions. |
| Bank Reconciliation | Import real-time bank records and check if bank and accounting records match. |
| BI Tools | Create advanced reports on financials, operations, business performance, personnel, and more. Report on historical data or perform predictive analysis. |
| Fund Accounting | Manage income and distribution of grants, state aid, scholarships, and work-study programs. Primarily used by government agencies, nonprofits, and educational institutions. |
Financial Accounting
Financial software helps businesses manage important financial information. The system records real-time income and sales data. Outstanding balances are also tracked within the system. Automatic payment reminders can be sent for upcoming and overdue payments. The software also assists with creating invoices to be sent out after services are rendered.
Financial management systems also keep track of the money you owe to your vendors. The system can automatically send recurring payments as needed to avoid accruing late fees.
Reporting and Analytics
Reporting and analytics functionality in financial software gives you a deeper look into your company’s financial operations. Financial systems allow you to break down sales by date range, best selling products and services, top performing sales reps, and more. This gives you the ability to clearly analyze sales data and make better business decisions based on historical trends.
Financial management systems also help businesses with reporting requirements laid out by the generally accepted accounting principles (GAAP). Required financial statements you can run include income statements, cash flow statements, and balance sheets.
Financial Management in ERP Software
Financial management is included in most ERP systems. ERP solutions manage a variety of business processes within an organization. These systems link back-office operations with customer-facing functionality to keep businesses connected. Examples of ERP software with strong financial systems include Oracle ERP, Sage Intacct, and SAP Business One.
Industry-specific ERP options are available for managing financials that are unique to your industry. Some examples include:
| Industry | Financial Functionality | Description |
|---|---|---|
| Construction and Service-Based | Job Costing | Assign costs to labor, equipment, and materials needed for a job. |
| Wholesale and Distribution | Order Management | Record sales, track order status, create invoices, and manage backorders. |
| Process Manufacturers | Recipe Management | Manage the price and type of ingredients in a recipe, as well as batch scaling and substitute info. |
Free and Open Source Financial Management Software
A few free, open source financial management systems are available. These solutions generally have limited functionality and are geared towards personal use or for startups and small businesses. Some examples of free, open source financial management software include:
1. GnuCash
GnuCash is a free, open source financial accounting software marketed as being for personal use and small businesses. Primary features include double-entry accounting, reporting, scheduled transactions, income and expense tracking, and statement reconciliation. Downloads are available for Linux, Microsoft Windows, and Mac OS X.
GnuCash does not support multiple users. Setup can also take up a lot of time.
- A basic tutorial for GnuCash beginners.
2. Firefly III
Firefly III is a free and open source financial management solution that is primarily for personal use. This software assists with income and expense tracking, budgeting, and financial reporting. Firefly II is self-hosted.
3. LedgerSMB
LedgerSMB is a free and open source accounting software marketed towards small to medium-sized businesses. Some features include invoicing, quoting, accounts receivable, accounts payable, general ledger, inventory management, and fixed asset management.
- Demo of LedgerSMB.