After a long, slow campaign to change backward-looking management reporting habits, forecasting, planning and analysis (FP&A) applications are prospering as uncertainty has asserted itself as a dominant feature of the business landscape.
The growing thirst for forecasting tools is reflected in the line-up at this year’s Accountex event in London on 1-2 May, where the likes of Fathom, Float, Fluidly, Spotlight Reporting and Accounting Insights will be attempting to catch this rising wave.
Early figures from AccountingWEB’s annual software survey show that the number of people rating forecasting tools are up 50% compared to last year, driven in particular by the specialist cash forecasting tools Float and Fluidly. The survey feeds AccountingWEB’s software reviews section as well as our annual Accounting Excellence Awards for software and is a valuable barometer for capturing trends in the marketplace. Take part in the survey if you want to add your observations on the forecasting products you use.
Last year’s FP&A software award was won by newcomer Fluidly, which benefited from appreciative ratings from small businesses that endorsed its ease of use and effectiveness at helping them manage cash.
Fluidly AI innovations
Fluidly uses machine learning techniques to build up a cash forecast automatically based on invoicing and payment patterns in the company’s cloud accounting ledgers. Early feedback from customers steered Fluidly towards the cash forecasting solution for its AI-powered engine. But Fluidly founder and 2018 software pioneer of the year Caroline Plumb has bigger ideas.
Last December, Fluidly landed a £200,000 grant from the Open Up Challenge, which was designed to help companies that had built business propositions around the new open banking interfaces to bring their ideas to market. Cash forecasting based on banking data is just a first step, Plumb told AccountingWEB in February: “The next phase of our research is going to focus on innovation in accounting.”
Moving in that direction, Fluidly is working with Sage and growing accountancy group Baldwins to develop an automated suite that will help accountants to spot issues and deliver advice across their entire client base. At Accountex Fluidly will give visitors a chance to see how those innovative ideas are taking shape with a Portfolio feature that gives practitioners an overall view.
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Float focuses on cash flow
Float, too, prospered by marketing directly to small businesses but like Fluidly it is also looking to boost its accountant network. “We are seeing substantial growth in our partner channel as accountants are looking to enhance the value they provide their clients," said Float CEO and founder Colin Hewitt.
Cash flow forecasting is a natural next step in the evolution of new services, he added: “Accountants are actually sitting down with their clients and asking them what they want - instead of just assuming - and often the answer is operational cash flow.”
Focusing squarely on cash forecasting, Float has added features like multi-budgeting tools to make forecasts more accurate and granular. Instead of grouping cash flow forecasts by month, businesses can input transactions and track their actuals against forecasts in real time.
“Sometimes monthly forecasts are not accurate enough for small businesses, particularly when the unexpected happens. When a company faces a sudden influx or outlay of capital, they may need to know their exact cash flow there and then, not at the end of the month,” said Hewitt.
New in Float for 2019 is an Insights page that presents an in-depth budget vs actuals report. The report highlights discrepancies in each line of a client’s chart of accounts and prompts more realistic budgeting. The Insights section also contains an accounts deep dive report and an accounts to watch report that highlights the top four lines over or under budget.
Spotlight Reporting, the pioneer of the reporting add-on marketplace confirms that torecasting use has gone through the roof in the past year, particularly on the cashflow side. “Our investment in the cashflow side of things is very important,” Spotlight founder Richard Francis told AccountingWEB. “Our most popular recent release has been our Cashflow Waterfall Page, which generates visuals around cash that are great talking points with clients.”
Other intitiatives added to Spotlight reporting such as fulti-faceted Dynamic Rules and three-way, five-year Comparison Pages have “given our already powerful cashflow tools even more mojo”, said Francis.
Looking forward, he added, “Personal Wealth has been huge and you’ll see that at Accountex. We have an exclusive integration with MyPropserity, powering family and high net worth individuals’ wealth balance sheets and inflows/outflows. It’s sexy kit.”
Fathom expands into UK
Internationally, Fathom has been riding high ever since its visual analysis tools were bundled up into a QuickBooks Advanced package in the US. Having established a permanent UK base in Cambridge, Fathom is beefing up its presence, particularly among larger firms, but is determined to support all accountants who want to use its sophisticated visual reports with clients. The Fathom team was non-committal about the likelihood of the QuickBooks Advanced package coming to the UK market.
Like all of its rivals, Fathom is working with AI tools to extract business insights from accounting data. “Business owners are visual,” UK manager Andrew Jordon told AccountingWEB. “Our focus is less on transactional data than turning numbers into visual information. Where Float is a short-term cash forecast, Fathom is more concerned with a longer-term view: scenarios, resourcing and capital planning."
Accounting Insights - the Power BI alternative
Also at the event will be Accounting Insights. AccountingWEB first met the company at Accountex 2017 when it exhibited under the banner Suntico. In contrast to the developers mentioned so far, Suntico does not rely on cloud accounting engines and instead adapted Microsoft Power BI to present Sage 50 data in a set of standardised report formats.
That puts Accounting Insights on the frontline of a battle that is taking place within the FP&A market, where the running was taken up in recent by pioneers like Spotlight Reporting and Fathom that introduced reporting packages that connected to the emerging cloud accounting engines to aid practitioners looking to offer advisory services to their business clients.
As Hugh Johnson from Accounting Insights highlighted last year, Power BI connects back to the accountant’s all-time favourite application, Excel. The Power BI contingent is still a relatively small population within our survey results, but paves the way for wider adoption as businesses see it as a way to bring business intelligence to older, desktop accounting systems.
Johnson noted that Gartner credited Microsoft Power BI with the strongest “completeness of vision” for analytics platforms. With so many businesses still connected to desktop accounting engines like Sage 50, accountants can use Power BI tools to build reports and dashboards that would bring new value out of the data for clients. “That you are intimately familiar with this model puts you in a great position to add tremendous value,” he said.
The overall picture is changing rapidly, so the best way to calibrate your needs is to have a look for yourself at Accountex next month. And until then, let us know what you think of the FP&A tools you’re using in the AccountingWEB software survey.
While you’re at Accountex, the No Accounting for Taste podcast will be recording live: join the AccountingWEB team and special guests at 3pm on day one in the How To Theatre.
About John Stokdyk
AccountingWEB’s Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.