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6 Signs Your Startup Needs FP&A Software

Are Excel spreadsheets haunting your dreams? Check out why your startup might need FP&A software.

It’s been a long day at the office and an even longer week. 

Between answering endless emails, planning new hires, and the landlord asking why this month's rent hasn’t been paid, you’re swamped. Not in the “things are going so good, I’m so busy!” swamped, either. The “I have no idea how I’m going to swing this” swamped. 

Then there’s a heavy weight on your shoulders. Feedback lurks in your mind from your latest investor meeting. They want to understand the company’s projected runway and results from the actual-budget-forecast analysis you were supposed to do last week. 

If only there were a way to make understanding startup finance easier. 

Well, what if I told you there was? First, take a step back and look at some signs your startup might need FP&A software.

#1 Financial Statement Requirements

Sign: You find it challenging to produce financial reports due to scattered data sources

Why FP&A Software: Reports, reports and more reports. Generating finicky financial reports and consolidating data from a myriad of sources can be a headache. If you're spending more time wrangling data than analyzing it, it's a clear sign something’s gotta give. After all, you didn’t start this business to be eyeball-deep in spreadsheets—you’re here to build an empire! 

FP&A software streamlines the reporting process, allowing for the quick and accurate generation of comprehensive financial reports that investors, stakeholders and your peace of mind need to have. 

#2 Manual and Time-Consuming Budgeting and Forecasting

Sign: Too much of your time is spent manually typing and calculating financial processes.

Why FP&A Software: Considering that 88% of spreadsheets have errors and the red ink on your last triple-check of the forecast proves it. It may be time to invest in something that takes the guesswork out of the crunched numbers (the right way). When automated FP&A software steps in, it saves you time, cutting down errors with features to predict the future (I’m looking at you scenario analysis).  

Not to mention the boost of accuracy your financial forecast receives. Now, you can confidently tell your investors how the next financing round provides sufficient runway to scale. 

#3 Limited Collaboration and Communication

Sign: There’s no talk! A lack of collaboration between departments is building, and you’re faced with difficulty sharing financial insights with relevant stakeholders.

Why FP&A Software: What will the price be for the new product? Why is there a hold on ordering materials? When should we bring on new hires? How much capital should we look at raising

FP&A software can serve as a centralized platform for understanding which departments are responsible for driving performance of each KPI. Software developers may not be responsible for balancing a balance sheet (unless they work at Profitual), but department head’s should be able to incorporate historical spend on AWS fees, salaries, and hardware costs into future planning reliably. 

#4 Inadequate Performance Analysis

Sign: Many projects and people are at work, but you don’t know how to gauge their performance. 

Why FP&A Software:  Key Performance Indicators, metric tracking, goal setting…There are so many aspects that go into understanding business performance. Ever look at all those numbers and wonder what they're trying to say? FP&A software helps visualize and track relevant data through features like variance analysis and visual dashboards, transforming your data into a story you can actually understand.

#5 Growing Business Complexity

Sign: As you grow your startup, traditional tools or methods to manage your finances become inadequate. 

Why FP&A: Excel served you well, but it’s time for an upgrade. With growth comes complexity; your strategies for keeping up should level up as your business does. Traditional tools may buckle under the weight of expanding datasets and evolving business scenarios. FP&A software is designed to scale with your business, offering flexibility and adaptability to handle the increasing intricacies of your financial management.

Growing pains, anyone?

#6 Risk Management Challenges

Sign: Identifying and managing data used to make informed decisions and assess risk management is difficult. 

Why FP&A: Ah, risks – the wild cards in every startup deck. Rule #1: don’t make rash decisions. Back up that gut feeling with quantitative reasoning. And enter to the stage, FP&A software. It transforms your gut instincts into data-backed strategies. When faced with choices that can make or break your startup, having the numbers at your fingertips can give you insights that can steer you in the right direction. FP&A software allows you to interpret your financial landscape, explore different scenarios, and see the potential outcomes of your choices. It's your safety net, ensuring that decisions aren't driven by hunches alone but grounded in the reality of your business metrics.

Profitual Can Help.

Have you been nodding your head this whole time? 

Let us introduce you to the FP&A software built by VCs for startups. We’ve got you covered in all of these areas and more! Our platform was created to help entrepreneurs who have a great vision but may not be accountants. Profitual gives you the financial understanding that is a foundation for decision-making, reporting and scaling your business. 

For startups, financial intelligence is traditionally inaccessible. But it doesn't have to be. 

Sign up & get started!

Sabrina Jaffer

Experienced auditor/accountant with a passion for continuous growth and learning!