What do you do when a client asks you to look beyond the standard financial statements and help develop financial goals, forecasts and what-if scenarios? If you’re like many accountants, you’d hunker down with a spreadsheet and begin cobbling together an array of custom worksheets. Then you’d probably spend several more hours explaining to the company’s managers, most of whom have little or no financial background, what all those numbers mean.
You can perform the task faster and create a more sophisticated presentation with financial analysis software. These products condense complex data analyses into easy-to-understand graphic presentations. And there’s a bonus: Such software can vault your practice to a more advanced business consulting level and help you attract new clients.
To help you find a program that best fits your needs—and your budget—we examined seven of the leading packages that represent, by vendors’ estimates, more than 90% of the market for such products.
Although all the packages are marketed as financial analysis software, they don’t all perform every function needed for full-spectrum analyses; however, as a practical matter, not every accountant needs every bell and whistle for his or her practice. As you’ll see, the prices for the products vary widely—from less than $200 to several thousand dollars.
Some vendors offer a trial version of the product. Take advantage of that offer. By testing the product with live data you can be sure the software meets your needs and satisfies your clients’ requirements.
Financial analysis software is a relatively inexpensive tool that introduces your practice to a wide assortment of engagements. It should allow you to provide a unique service to clients.
ACCPAC CFO (Comprehensive Financial Optimizer) is designed for small and medium-size enterprises and can help make business-planning decisions by modeling the impact of various options. This is accomplished by demonstrating the what-if outcomes of small changes. A roll forward feature prepares budgets or forecast reports in minutes. The program also generates a financial scorecard of key financial information and indicators.
Customized Financial Analysis by BizBench provides financial benchmarking to determine how a company compares to others in its industry by using the Risk Management Association (RMA) database. It also highlights key ratios that need improvement and year-to-year trend analysis. A unique function, Back Calculation, calculates the profit targets or the appropriate asset base to support existing sales and profitability. Its DuPont Model Analysis demonstrates how each ratio affects return on equity.
Financial Analysis CS reviews and compares a client’s financial position with business peers or industry standards. It also can compare multiple locations of a single business to determine which are most profitable. Users who subscribe to the RMA option can integrate with Financial Analysis CS, which then lets them provide aggregated financial indicators of peers or industry standards, showing clients how their businesses compare.
iLumen regularly collects a client’s financial information to provide ongoing analysis. It also provides benchmarking information, comparing the client’s financial performance with industry peers. The system is Web-based and can monitor a client’s performance on a monthly, quarterly and annual basis. The network can upload a trial balance file directly from any accounting software program and provide charts, graphs and ratios that demonstrate a company’s performance for the period. Analysis tools are viewed through customized dashboards.
PlanGuru by New Horizon Technologies can generate client-ready integrated balance sheets, income statements and cash-flow statements. The program includes tools for analyzing data, making projections, forecasting and budgeting. It also supports multiple resulting scenarios. The system can calculate up to 21 financial ratios as well as the breakeven point. PlanGuru uses a spreadsheet-style interface and wizards that guide users through data entry. It can import from Excel, QuickBooks, Peachtree and plain text files. It comes in professional and consultant editions. An add-on, called the Business Analyzer, calculates benchmarks.
ProfitCents by Sageworks is Web-based, so it requires no software or updates. It integrates with QuickBooks, CCH, Caseware, Creative Solutions and Best Software applications. It also provides a wide variety of businesses analyses for nonprofits and sole proprietorships. The company offers free consulting, training and customer support. It’s also available in Spanish.
ProfitSystem fx Profit Driver by CCH Tax and Accounting provides a wide range of financial diagnostics and analytics. It provides data in spreadsheet form and can calculate benchmarking against industry standards. The program can track up to 40 periods.
James Estes, CFP, ChFC, CLU, CPCU, is an assistant professor at the College of Business and Public Administration, California State University, San Bernardino. Richard S. Savich, CPA, Ph.D., is an associate professor at the college and president of ABKO Consulting in Bermuda Dunes, Calif. Maya Ivanova is a research assistant at the college.