5 common budget and forecast software buying mistakes

How do I choose the right budget and forecast software for my business? What mistakes should I avoid when evaluating budgeting and forecasting vendors? Is cost the only factor I should consider in my decision?

These are all questions that can come up when you’re considering investing in budget and forecast software, and it makes sense – it can be a big investment, and you want to avoid the common pitfalls that come with choosing a new solution for your finance team.

What is budget and forecast software

Budget and forecast software, also referred to as Financial Performance Management[EC1] (FPM) or Corporate Performance Management (CPM) software, is a tool designed for CFOs, finance leaders, and decision-makers. Some of its key features include:

• Managing crucial financial tasks such as reporting, budgeting, and planning.
• Streamlining your budget management process and automating repetitive tasks.
• Integrating data directly from the source, providing immediate access to real-time data points.
• Enabling the creation of comprehensive and insightful forecasts.
• Allowing for complex data analysis.

Ultimately, budget and forecast software is an essential component of financial performance management, offering a clear view of your organization's finances.

Mistake #1: Focusing on cost over capabilities

The adage, “you get what you pay for” is true.

It’s not uncommon for companies to have a price in mind when looking for budget and forecast software. However, cost isn’t the only factor that should drive your decision.

When you choose budget and forecast software based purely on cost, you run the risk of foregoing critical capabilities like collaboration, data integration, and security in favor of an Excel add-in with limited functionality.

Before evaluating budget and forecast software solutions, you should identify a wish list of applications that would help you streamline your processes, improve accuracy, and drive business performance, and then evaluate vendors based on how well they fit your desired capabilities.

Looking into reviews from industry analysts and customers may also be helpful to guide your decision. Reports and reviews from those with hands-on experience may give you insights on what capabilities to focus on, understand why certain organizations made an investment, and the impact the software has had on their business performance overall.

Mistake #2: Leaving value-add services on the table

Many budget and forecast software vendors offer additional value-add services as part of your implementation and ongoing relationship, including:

• Extended customer support – an addition to your contract that usually involves direct access to customer support, additional consulting hours, and training opportunities.
• Self-serve implementation – Some vendors offer a self-serve implementation process that includes step-by-step guidance on how to setup the software.
• Continuous learning – access to a library of courses on the software, and how to get continued value from your investment.

While value-add services may increase the cost of your contract, it’s important to consider whether they will save you money in the long-run. Extended customer support can ensure you have the resources you need to solve any issues immediately, without the stress of trying to contact a helpline. Self-serve implementation resources can also improve end-user adoption, meaning you will see a return on your investment in budget and forecast software sooner.

Mistake #3: Prioritizing short-term needs over long-term goals

When you begin looking for budget and forecast software, you likely have a short-term need you want to address - whether you want to reduce the time you spend on budgeting, automate report creation and distribution, or create a dashboard with critical KPIs.

However, when you prioritize a short-term need over your company’s long-term goals, you might end up with a solution that can’t scale to meet your needs. By choosing budget and forecast software with multiple applications, like Budgeting & Planning, Reporting & Analytics, Consolidations, and Intercompany Management, you can address your immediate needs, and expand your use-case in the future.

Mistake #4: Not talking to other users

The reality is that software vendors can claim anything they want to about their product – it’s only when you talk to other users, can you get a sense of how user-friendly a solution is, how responsive their support is, and how long it takes to implement.

Many budgeting and forecasting vendors will offer to setup a reference call with a customer in a similar industry or with a comparable company size or use case, so you can better understand how the software will work for you.

It’s a best practice to compile a list of questions beforehand, and if a vendor doesn’t offer to setup a reference call, you should request one before moving ahead in the process.

If you’re unable to speak directly with users, it’s worthwhile to explore customer success stories from the vendors on your shortlist. Here are some examples of how customers succeeded with Prophix:

• Wilson Construction saved up to 4 days per month for weekly reporting, and 2 weeks per month for GL and WIP reporting
• Mission Health cut time spent on annual budgeting process by over 40%
• Spacesaver enhanced reporting for better insights into budget vs. actuals, profitability, labor, and inventory
• Boulay saw a 20.9% improvement in net income forecast accuracy

USA Properties saw a 4x increase in the number of projects under construction due to improved operational planning efficiency

Mistake #5: Assuming the way you do things now is the best way to do them

It can be tempting when evaluating budget and forecast software to choose the solution that’s most like how you do things now. If you’re used to budgeting in Excel, a vendor that uses Excel as their interface may seem like an appealing option.

But it’s important to consider that whatever need drove you to consider budget and forecast software resulted from using spreadsheets. If you want to innovate and improve your processes, you need to be willing to consider a better way. Budgeting and forecasting platforms have been designed with all parts of your financial transformation in mind. With a dedicated platform for budgeting, planning, reporting, analytics, and consolidation, there’s no limit to what you can achieve. 

How to choose the right budget and forecast software for your business

In conclusion, choosing the right budget and forecast software is more than just a question of cost. It's about considering long-term goals, understanding the value-add services on offer, seeking user feedback, and being open to new ways of doing things. If you’re ready to learn more, check out this resource on FP&A software pricing. Remember, the ideal solution should not only cater to your immediate needs but also be scalable to meet future demands.

Avoiding these common mistakes when evaluating budget and forecast software vendors can significantly streamline your selection process and yield a better return on your investment. Remember, an effective budget and forecast platform like Prophix can revolutionize your financial processes with advanced capabilities for budgeting, planning, reporting, analytics, and consolidation.

So, as you embark on this journey, keep your focus on the capabilities that will truly drive your business performance and seek a solution that aligns with your long-term goals. Don't just settle for what you're used to but be ready to embrace a better way of doing things. After all, the aim is not just to change, but to transform for the better.

Check out our guide on budgeting software to learn more.