choosing the right cashflow modelling software for your business

, 2 September 2020

If you’re ready to choose a cashflow modelling tool for your financial planning business, here are ten key questions to ask as you undertake your due diligence

As a business, there are lots of factors to consider before you invest in any new technology. Each business will do their own due diligence to determine what solutions work for them, and what software will offer the best value and, more importantly, the best fit.

We’ve previously looked at how those businesses investing in their processes are putting themselves in a great position as we exit the pandemic. So, if you’re considering incorporating cashflow modelling into your approach, or you are reviewing the software your business currently uses, here are ten questions you should be asking.

1. How does it work?

Not all cashflow modelling tools are created equally. Some only offer limited calculations, while others are sophisticated enough to deal with the most complex client situation.

When we talk to financial planners, they tell us their cash flow modelling systems need to include the following as a minimum:

  • It must be able to consider investments, pensions, protection and tax concurrently in one single tool. There is so much trade-off between all aspects of planning that these can’t be considered piecemeal
  • Tax is critical – the application must show the Income, Capital Gains and Inheritance Tax implications of any course of action as ultimately this can impact on the return to the family
  • Client engagement is crucial for them to understand the options and not feel overwhelmed by what can be a stressful exercise. The application must be visual and demonstrate clearly the implications of the various options that might be available.

When choosing software, as well as ensuring it ticks all the boxes above it’s also important that you understand how the inputs are turned into outputs. If you don’t, you’ll struggle when it comes to explaining it to a client.

Find out what the software does, how it works, and whether you can use it remotely – for example, if you visit clients.

To see how i4C works watch this video.

2. Is it intuitive and easy to use?

Obviously, one of the factors you’ll be considering is: ‘is it easy to use?’ Things to look out for include:

  • Does data carry over from one part of the system to another? For example, does it link rental income to a property, so you don’t have to add the property in one screen and the rental income in another and link the two?
  • Are the input screens clear and concise?
  •  Can you prepopulate default values?

3. How secure is it?

As businesses increasingly move to cloud-based solutions, it’s vital that any software you choose is highly secure.

Look for software with strict security protocols to protect client information, and find out how data is stored, backed up and encrypted. As a minimum, any technology should adhere to ISO 27001 and ISO 9001 standards.

4. How easy is it to integrate with other systems?

As planners move towards adopting more technological solutions to drive efficiency, it’s important that each of these systems integrates seamlessly with each other. If they don’t, you could end up unnecessarily duplicating information.

For example, firms using Intelligent Office can easily integrate i4C through the iO Store.

5. Can it be adapted to different types of client?

Your clients are likely to belong to different age groups and have different levels of income and wealth. They will also have unique and individual needs, goals, and aspirations.

What this means is that your cashflow modelling tool needs to be able to adapt to any client’s needs. It needs to be as capable in dealing with a simple financial plan as it does with a sophisticated client needing complex tax and estate planning.

Flexible cashflow modelling software needs to adapt to your needs, not the other way around.

6. How will it support our compliance function?

Adopting a comprehensive, intuitive cashflow modelling tool can revolutionise your compliance process:

7. Will clients like it?

One of the common objections we hear about cashflow modelling is: “clients don’t care.”  We talk about this in more detail here.

If you’re planning to adopt cashflow modelling as part of your process, it’s important to choose a system that produces engaging, interactive outputs that clients can understand.

Cashflow modelling gives a client a visual representation of how their finances will look, from now through early retirement into their later years. It makes it far easier for them to grasp how their wealth will be affected over time, the level of income they can afford to take, and the impact of factors such as tax and stock market volatility.

Showing clients this type of information in a visual way can really engage them in the financial planning process. So, choose a tool that shows your clients visually how choices will affect them now and in the future.

8. Is it scalable as our business grows?

Nothing is more annoying than your business outgrowing technology. Having to rip up systems and start again as you add new team members and clients is both costly and time-consuming. There can also often be problems as you transition to new software.

So, when choosing a cashflow modelling tool, look for technology that will help your business grow and suit you both today and tomorrow. The software you choose to implement needs to be scalable, and in tune with your changing business needs.

9. What do other users say?

Before choosing a system, speak to other financial planners to find out how their choice of software has helped them. You can read some of our user testimonials here.

Has it driven efficiencies? Have they been able to grow their business and take on new clients? How has the overall experience been?

10. What is the after-sales service like?

It’s all very well choosing and installing some new software, but you also need to know that there is back-up and support available should you need it.

Question the provider. Is there a helpline or a dedicated account manager with technical knowledge that can answer your questions? Is there help available if you’re struggling with one aspect of the system? And how are updates and enhancements rolled out?

If you’re doing your due diligence and looking for a comprehensive and intuitive cashflow modelling system, we’re here to answer all the above questions and more.

To chat with one of us about the benefits of cashflow modelling, and how i4C can help you to grow your business, email or call 020 3308 9448.

Or why not start your 30 day free trial?

This article was written by Carly Robbins, Client Cashflow Solutions Consultant at i4C.