The digital engine of accounting and finance that tracks and analyzes an organization’s money using financial management software.
Designed for creating, connecting, storing, and reporting many different types of finance transactions, a inancial management system ultimately has one core purpose: counting money.
Quite simply, without some kind of accounting software, an organization would not survive. At the most basic level, every organization needs systems to manage the flow of money in and out of the business. But a truly effective financial management system can do more: optimize profitability, measure cash flow, determine tax obligations, ensure compliance, and maintain long-term enterprise sustainability.
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Financial management software includes the tools and processes that manage and govern income, expenses, and assets. An overarching goal for any financial management solution is to not only maintain an organization’s daily business, but to maximize profits and continuously protect financial data from fraud and theft. At a basic level, an accounting system provides the following benefits:
Financial management systems deliver accurate financial information across the organization. By leveraging this data, financial management software can further help organizations in the following functional areas:
Most financial management systems do a good job of providing dynamic visibility into enterprise data. In the last century, ERP software excelled at capturing very large sets of business data, but had difficulty producing reports. That was then.
Today’s organizations want the ability to put their financial data to use to improve profitability, streamline operations, and improve decision-making. In recent years, capabilities for reporting and other data output and monitoring have become much more important to organizations. Reporting requirements for financial management systems have rapidly evolved to keep pace with that demand.
At a minimum, all companies need reports that cover month-end close, quarter close, and annual close, along with basic financial statements for income, expenses, and balances. While these outputs were always available, it wasn’t easy to adjust these reports or add derivations for other needs.
In our fast-paced business environment, the ability to generate prebuilt reports as well as easily create ad-hoc outputs, isn’t just something that’s nice to have—it’s a critical requirement for financial management systems software. Add in requirements for in-depth data analysis, information visualization, more operational visibility, and narrative reports, and companies quickly discover that their ERP software solutions need to easily work with advanced reporting systems like enterprise performance management (EPM) solutions.
Ideally, a financial management system does more than just manage the monetary mechanics across debits and credits and publish a few reports.
A well-designed financial management system improves business performance and profits by streamlining operational processes and aligning them to best practices. It also helps employees be more productive as they invest their time and effort into strategic (rather than tactical) activities that can transform companies and institutions.
As organizations add new markets, expand into new geographies, and adapt to marketplace disruption—especially if they are the disruptor—their financial management solutions must rapidly scale to accommodate added legal and reporting requirements, additional assets, new short-term and long-term liabilities, more qualified suppliers for goods and services, and infrastructure that addresses employee payrolls and policies in different countries.
As today’s workforce starts to retire and millennials are recruited to take their place, attracting the next generation of employees becomes a priority. Financial management systems must also meet the expectations of a digital workforce, with an intuitive user interface, easy-to-use design, as well as embedded social media and other social tools that millennials have already embraced.
Oracle delivers modern, cloud-based financial management solutions that help organizations compete in a digital economy. These comprehensive solutions include the following capabilities:
In addition to the design principles mentioned above, there are three core operational concepts that are driving the move of financial management software from on-premises to the cloud. They include:
Clearly, financial management solutions have evolved to meet the demands of a digital world. And the cloud has been key to this transformation. The cloud has elevated ERP and financial solutions from basic, back-office accounting software to a comprehensive, mission-critical, integrated solution designed for innovation. As companies encounter new disruptive forces and competitive pressures, modern financial management systems built for this new normal can enable them to achieve financial strength for the future.
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