Companies use budgeting and forecasting software to plan the financial resources they need to support their business activities in the future. This type of software helps companies estimate future revenues and expenses across multiple departments or business entities. Managers and executives use this type of software to create budgets and forecasts for each department. Accountants use budgeting and forecasting solutions to consolidate all departmental budgets to develop an overall company budget, which defines how funds will be allocated to each department. This type of software also empowers accountants to identify possible changes in revenues and expenses, which may impact the profitability of the company.
While most accounting products offer basic budgeting features, companies opt for budgeting and forecasting software when in need of advanced functionality. This type of software requires financial and operational information from tools such as accounting software and ERP systems. For advanced financial performance analytics, budgeting and forecasting software is integrated with corporate performance management software.
To qualify for inclusion in the Budgeting and Forecasting category, a product must:
- Provide templates for different types of budgets
- Allow users to create different versions of a budget
- Maintain budgeting history and use it to develop forecasts
- Compare revenues and expenses estimates with actuals
- Consolidate budgets from several departments
- Use what-if scenarios to forecast possible budget changes
- Monitor the performance of budgeting processes
