Budgeting and forecasting tools for professional services

“When you expect things to happen – strangely enough – they do happen.” – J. P. Morgan

For professional services like engineering, architecture, and consulting firms, budgeting and forecasting aren't just financial tools – they're essential for staying afloat. Think of them as your financial compass, guiding you through the sometimes stormy seas of project-based revenue and unexpected expenses.

The right tools can make budgeting and forecasting a breeze. They can automate tasks, provide real-time insights, and help you make smarter financial decisions.

It’s really a no-brainer.

In this article we’ll take a look at needs, features and favourites when it comes to financial budgeting and forecasting software.

Let’s start with the ‘why’.

Why professional services companies need specialised budgeting and forecasting tools

Professional service firms operate in dynamic and unpredictable environments – exciting, yes, but unpredictable. They face unique financial challenges and could use the automated assistance of specialised tools to help them manage their finances effectively.

These tools can help with:

• Managing billable hours: Accurately tracking billable hours is crucial for professional services firms to ensure profitability. Specialised tools can automate time tracking, generate detailed reports, and help identify underutilised resources.
• Forecasting project costs: Project-based work involves estimating costs and revenues accurately. Dedicated tools can assist in forecasting project expenses, including labour costs, materials, and overhead, to avoid budget overruns.
• Allocating resources efficiently: Professional service firms often need to allocate resources, such as people and equipment, to multiple projects simultaneously. Specialised tools can help optimise resource allocation, ensuring that projects are completed on time and within budget.
• Improved accuracy: These tools are designed to handle the unique financial complexities of professional services, providing more accurate forecasts and budgets.
• Better financial control: By automating tasks and providing real-time insights, these tools help maintain better financial control and reduce the risk of errors.
• Enhanced strategic planning: With accurate budgeting and forecasting, professional service firms can make more informed decisions about resource allocation, pricing, and business growth.

Key features to look for in budgeting and forecasting tools

Now, these are all great reasons to get a budgeting and forecasting tool, but what should CFOs and financial controllers look for when choosing the right one? Again, it depends on your needs, but generally you want to look for the following:

• Integration with existing systems: Seamless integration with accounting software, CRM systems, and other business applications is essential for efficient data flow and reduced manual effort.
• Scenario planning: The ability to create and analyse multiple financial scenarios is crucial for risk management and strategic decision-making.
• Real-time data analysis: Access to real-time financial data enables timely insights and proactive adjustments to budgets and forecasts.
• User-friendly interfaces: Intuitive interfaces that are easy to learn and use can improve adoption rates and ensure that financial professionals can leverage the tool's capabilities effectively.
• Scalability: The tool should be able to accommodate the growth of the company without requiring significant changes to its financial management practices.
• Customisation: Customisation options allow firms to tailor the tool to their specific workflows and reporting requirements.

Of course, some of these features will be more important to you than others, so look for a tool that upweights the ones you’re looking for.

Let’s take a look at our top 5 tools for budgeting and forecasting.

1. Magnetic

Although all-in-one solutions sometimes get a bit of stick for not focusing on one particular part of the puzzle, Magnetic’s Finance Management features are really comprehensive. With powerful tools for streamlined operations, enhanced forecasting accuracy, and effective financial management, you’re empowered to make strategic decisions armed with solid data.

Features and benefits that might interest CFOs:

• Get a clear view of your business health: Visualise key performance indicators, track project profitability, and monitor client engagements with unparalleled precision.
• ‍Streamline your‍ financial processes: Combine the strengths of Magnetic with your current systems, so you can benefit from a cohesive financial management experience that enhances accuracy and saves valuable time.
• Forecast and plan with confidence: Anticipate future financial trends and plan strategically to ensure sustained growth and financial stability with forecasting tools that provide accurate, real-time financial insights.
• Manage project delivery and costs: Easily monitor billed hours against project estimates to manage and prevent over-servicing with detailed reports that help you track the time spent on each client or project.

Profitability and revenue forecasting

Gain real-time insights into your projects' financial health and anticipate future revenue trends with Magnetic’s comprehensive dashboards. Optimise profitability by tracking revenue, costs, and margins, and ensure your business is on track for financial success. Forecast future revenue and cash flow needs accurately, enabling you to plan for significant investments and navigate financial challenges effectively.

Financial workflows and managing over-servicing  

Magnetic’s user-friendly tools help prevent over-servicing, and streamline financial workflows. You can also monitor billed hours against project estimates, identify areas of concern, and adjust service delivery accordingly. Simplify invoicing and expense management, while generating precise cost estimates and customised client rate cards.

Real-time visibility and integration

Stay informed with real-time updates on project progress, identify bottlenecks early, and ensure your team remains aligned. Magnetic’s seamless integration with leading accounting software like Sage, Xero, and Pastel eliminates data silos and streamlines your entire financial management process.

2. Workday

“The only platform fit for rock stars of finance.”

That’s a big claim, but Workday seems to back it up. By embedding AI into the core of their platform, they use it to help you drive ‘flawless operations’ and empower finance to step into the limelight as legends of value creation.They capture the imagination of the modern CFO as a trusted business partner that creates value by providing insights that propel the business forward.

Features that might interest CFOs:

• Unified platform: Workday offers a unified platform that integrates various financial functions, eliminating the need for multiple systems and reducing data silos.
• Real-time insights: The system provides real-time visibility into financial data, allowing businesses to make informed decisions quickly.
• Scalability: Workday is highly scalable, accommodating the growth and changing needs of businesses.
• Mobile accessibility: The system can be accessed from anywhere, at any time, using mobile devices.
• Robust analytics: Workday's analytics tools enable businesses to gain deeper insights into their financial performance and identify trends.

Addressing the Needs of Professional Service Firms:

Workday Financial Solutions is particularly well-suited for professional service firms due to its project-based budgeting, time and expense tracking, billing and invoicing, resource management and scenario analysis.

Integrations

Workday integrates seamlessly with a wide range of third-party applications, including CRM systems, HR platforms, and industry-specific tools. This enables businesses to create a unified ecosystem for their operations.

Case Studies:

If you need convincing, look no further than a good case study. If you follow this link, you can see how Salesforce, Shutterstock, Levi’s and Target have made use of the product, or filter by industry if you’re looking for something more relevant to you.

3. Vena Solutions

If you’re a Microsoft house, then this is for you.

Vena Solutions helps you streamline your planning with the power of AI and the flexibility of Excel. It also simplifies reporting and accelerates analysis as ‘the only complete planning platform natively integrated with Microsoft 365. Expect next-level productivity, powerful financial insights and improved capacity for strategic work.  

Features that might interest CFOs:

• Project-based budgeting: Vena accommodates the project-centric nature of professional services by allowing for detailed budgeting and forecasting at the project level.
• Resource management: Track resource allocation across projects, ensuring efficient utilisation of personnel and equipment.  
• Scenario planning: Model different financial scenarios to assess potential risks and opportunities, allowing for better strategic decision-making.  
• Real-time visibility: Gain instant insights into financial performance with real-time data dashboards, facilitating proactive adjustments.

Simplifying the budgeting process

Vena Solutions simplifies budgeting by automating tasks and providing an Excel-based interface with features like version control and workflow management. This ensures data accuracy and facilitates collaboration among teams, who can access and update budgets simultaneously. Vena's centralised repository for financial documents further enhances transparency and communication.

Enhanced collaboration

Collaboration is a cornerstone of Vena's platform. Teams from different departments can access and update budgets simultaneously, fostering better communication and transparency. The platform also provides a centralised repository for financial documents and reports, making them easily accessible to all stakeholders.  

Some usage examples

• An engineering firm could use Vena to forecast project costs, track billable hours, and optimise resource allocation across multiple projects.
• An architectural firm might leverage Vena's scenario planning capabilities to model the financial impact of different design proposals and fee structures.
• A consulting firm could use Vena's real-time data dashboards to monitor project profitability and identify potential budget variances early on.

Integration capabilities

Vena integrates with most popular systems, including Microsoft 365 apps, ERP accounting systems, CRMs, HRIS systems and more. Click here for a deep dive.

4. Planful

This one’s for the movers and shakers among the money-makers.

Planful is all about financial agility and taking control of your company's financial performance in an ever-changing landscape. Planful transforms the way you plan, close, and report so you can drive more impactful decisions across your business. Align every squad, inform every move, and change direction using a platform designed to improve your performance.

Features that might interest CFOs:

• Automation: Planful automates repetitive tasks like data entry and consolidation, freeing up valuable time for analysis and strategic planning.  
• Real-time reporting: Gain instant insights into your financial performance with Planful's dynamic dashboards and reports. This allows for proactive adjustments and course corrections as needed.
• Financial planning: Planful offers comprehensive financial planning tools, including budgeting, forecasting, and scenario planning.  
• Multi-scenario planning: Model different financial scenarios specific to professional services, including fluctuations in project scope, billable hours, and resource availability. This allows you to prepare for potential risks and capitalise on unexpected opportunities.
• Resource allocation: Optimise resource allocation with real-time data on project demands and team availability. Planful ensures skilled personnel are assigned to the right projects at the right time

Customer success stories:

Although you might not find the world’s biggest brand names among Planful’s case studies, it is a very long list of some pretty large companies, all of whom are smiling all the way to the bank account. Take a squizz and see if there’s one that resonates with you.

5. Prophix

Prophix One is a financial performance platform for next-gen finance teams. They’ve placed a focus on having a single platform – “One portal, one experience, one single version of the truth. All on one financial performance platform.”

That’s a very good marketing angle, but let’s take a closer look.

Features that might interest CFOs:

• Enhanced forecasting: Prophix provides robust forecasting capabilities, allowing firms to predict revenue, expenses, and profitability with greater accuracy. This enables them to make informed decisions about resource allocation, pricing strategies, and business expansion.
• Streamlined performance management: Prophix centralises budgeting, planning, reporting, and consolidation processes in a single platform, facilitating efficient performance management. This reduces complexity and provides a holistic view of the financial health of the firm.  
  Improved visibility: Real-time dashboards and reports empower leaders to track key metrics, identify trends, and make adjustments as needed. This proactive approach ensures the firm remains on track to achieve its financial goals.  

Ease of use and customisation

Prophix prioritises user-friendliness with an intuitive interface that minimises the need for training time. Its drag-and-drop functionality allows for easy customisation of workflows and reports to cater to the specific needs of each professional service firm.

For complex financial processes

Prophix can handle the intricacies of project-based financial management faced by professional service firms. It allows for detailed budgeting at the project level, tracking of billable hours and costs, and efficient resource allocation.

From construction and education to property and healthcare, Prophix boasts a healthy set of case studies and success stories for you to read over here.

How to choose the right budgeting and forecasting tool for your firm

When selecitng a budgeting and forecasting tool, CFOs and financial managers should carefully consider the specific needs of their firm. Here are some key factors to evaluate.

When selecting a budgeting and forecasting tool, CFOs and financial managers should carefully consider the specific needs of their firm. Here are some key factors to evaluate:

• Company size and complexitySmaller firms y benefit from cloud-based tools that offer simplicity and affordability, while the medium-to-large sizes with complex financial operations may require more robust features, including advanced analytics and integration capabilities.‍
• Integration requirements Assess the tool's ability to integrate with your current accounting software, CRM systems, and other business applications. Seamless integration can streamline workflows and reduce manual data entry.‍
• But Considerations
  • Pricing models: Consider the different pricing models offered by vendors, such as subscription-based, usage-based, or perpetual licensing.‍
  • Hidden costs: Be aware of potential hidden costs, such as implementation fees, training expenses, and ongoing support charges.‍
• Scalability and support
  • Future growth: Evaluate the tool's ability to scale with your firm's growth and changing needs.‍
  • Support services: Consider the level of support provided by the vendor, including technical assistance, training, and ongoing updates.‍
• Some other tips you might want to consider
  • Demo and trial: Request a demo or trial to evaluate the tool's features, user interface, and ease of use. Most tools offer free trials at the beginning to help you make your decision. ‍
  • User feedback: Find feedback from other companies that have implemented the tool to gain insights into its effectiveness and limitations.
  • ‍Long-term vision: Consider your firm's long-term goals and choose a tool that aligns with your strategic direction.

By carefully evaluating these factors, CFOs and financial controllers can select a budgeting and forecasting tool that meets specific needs and drives financial success.

Streamlining financial planning with the right tools

That’s what it’s all about – streamlining.

CFOs have their models, their ideas and their processes in place. The right budgeting and forecasting tool will help everything work well together by automating the automatable, giving you the right information, and helping you look to the future.

With improved accuracy, enhanced collaboration and the ability to make strategic decisions based on data, this kind of software can lay the foundation for sustainable growth.

Consider Magnetic

Magnetic isn't just a strong budgeting and forecasting tool, it’s an all-in-one solution that also includes CRM, timesheets, project management, automation, resource management and reporting. Want to give it a try?