What is financial benchmarking software?
Financial benchmarking software helps you stay on top of your company’s performance and understand how your firm compares to your ideal peer group. It provides in-depth reports that detail how your company differs from the competition, allowing leaders to make timely, evidence-based decisions. Moreover, financial analysis benchmarking tools simplify the data collection process, making it easier to present your business case, leverage opportunities, and analyze weaknesses.
Companies that use financial benchmarking software are better equipped to stay competitive and be resilient during uncertain economic times. Indeed, ditching the spreadsheets and adopting financial benchmarking tools benefits leaders, stakeholders, and your business as a whole. Here are the top five reasons to invest in financial analysis software.
Benefit 1: Understand Your Current Financial Position
Big data plays a crucial role in decision-making. Indeed, Richard Ries, Vice President of Gartner, believes that financial leaders “must proactively monitor, experiment with and exploit key data and analytics trends to respond to crises, innovate and rebuild.” Yet, spreadsheets and data-heavy documents make it harder to develop insights and understand your financial position.
Financial benchmarking software solves these problems by providing accessible, accurate reports showing your company’s standing. It pulls data from disparate systems into a central dashboard, allowing you to review top-level and granular benchmarking data in a single spot. In addition, the right tools help you build a financial narrative and successfully convey insights to department leaders, potential investors, and stakeholders.
Gartner predicts that “by 2025, data stories will be the most widespread way of consuming analytics.” Bizminer’s custom reports include variance tables, summary scores, and ratio analyses for in-depth insights. The financial benchmarking solution provides an easy-to-understand narrative, ensuring that leaders can present their organization’s financial story in a compelling, fact-based manner.
Benefit 2: Measure Performance Against Industry Standards
Only 11% of McKinsey survey respondents “believe their current business models will be economically viable through 2023, while another 64% say their companies need to build new digital businesses to help them get there.” As the digital divide between organizations increases, business leaders must find ways to stay at the top of the pack. Financial benchmarks reveal disparities in financial health and performance.
For instance, if your firm ranks in the 72nd percentile for gross profit, you know that 71% of your peers faired worse. You can review the differences between your company and top performers. Doing so can lead you to question your approach and uncover ways to improve profitability.
Financial institutions benefit from financial benchmarking software that provides granular data about your ideal local peer group. Personalized reports let you view ratios critical to your operational and financial performance. In-depth competitive research and analysis reveal ways industry leaders are adjusting to change, giving your firm actionable insights to future-proof your organization.
Benefit 3: Identify Key Areas of Improvement
Continuous improvement is essential to meet your desired business outcomes, and benchmarking financial analysis is part of your quality management process. Benchmarking establishes the definitions and metrics used to assess financial health and performance. It ensures leadership stays on the same page when evaluating progress over time.
The initial financial benchmark analysis shows where you’re at now. The data supports several operational improvements and decision-making processes in key areas, such as strategic planning, budgeting, and capital investments. Subsequent measurements track goal advancement while keeping you abreast of industry standards. Having a financial benchmark example can spur action and reduce complacency.
Benefit 4: Reduce the Time Spent on Benchmarking Tasks
Benchmark studies typically involve many tasks, from gathering your firm’s data to sourcing competitive information. The process consumes many hours over weeks and months. IDC found data professionals waste roughly 14 hours weekly on finding, preparing, or governing data. These inefficiencies cost each organization about $103 million per year.
Financial benchmarking software reduces operational inefficiencies, allowing you to optimize business operations and focus on action, not data collection and entry. [Text Wrapping Break][Text Wrapping Break]Top-rated benchmarking platforms gather information from public, private, and web statistical data sets, including the IRS and US Census Bureau. Bizminer sources more than one billion data points from over 18 million business operations and maintains a robust quality control system.
It uses reliable, verifiable raw data from sources such as:
- IRS SOI Corporation Tax Book
- American Community Survey
- Data Axle
- Bureau of Labor Statistics Industry Productivity
- Business Valuation Resources (BVR)
- Credit Reporting Agencies
- US Census Quarterly Financial Reports
- Business Directories
- IRS Statistics of Income[Text Wrapping Break]
With Bizminer, you can integrate benchmarking tools with your current software using application programming interfaces (APIs), meaning less task switching and transferring information. It also includes concise methodologies, making building a report repeatable.
Benefit 5: Automate Financial Reporting Processes
Manual processes result in omissions, delays, errors, and fraud. Indeed, 55% of BlackLine survey respondents aren’t confident that “they can identify financial errors before reporting results,” and almost 79% believe their organization made “a significant business decision based on inaccurate financial data.” Moreover, 41% of global business leaders and finance professionals blame “manual inputting leading to human error” for inaccuracies.
Financial analysis software automates financial reporting, helping leaders speed up and simplify the process. As a result, you can ensure regulatory compliance, reduce errors, and decrease fraud risk. Bizminer can streamline your reporting process by automating data collection and analysis, allowing you to make timely data-driven decisions and view progress without combing through spreadsheets or multiple software programs.
Improve Performance With Financial Analysis Benchmarking
Save time and improve decision-making with financial benchmarking software. Bizminer financial reports provide granular statistical profiles and financial analysis benchmarks for more than 5,000 lines of business. The accurate information and easy-to-understand reports help you automate reporting while identifying critical areas of improvement. Achieve your goals by signing up for a free account or booking a one-on-one demo.