A financial management system is the methodology and software that an organization uses to oversee and manage its income, expenses, and assets with the objectives of maximizing profits and ensuring sustainability.
An effective financial management system improves short- and long-term business performance by streamlining invoicing and bill collection, eliminating accounting errors, minimizing record-keeping redundancy, ensuring compliance with tax and accounting regulations, helping personnel to quantify budget planning, and offering flexibility and expand ability to accommodate change and growth.
Other significant features of a good financial management system include:
- Ensuring data integrity and security.
- Keeping all records up to date.
- Maintaining a complete and accurate audit trail.
- Minimizing overall paperwork.
ERP financial management software should include features that support creation of ad hoc reporting as well as month-end closing, quarter closings and year-end reporting.