In our experience, most private equity accounting teams struggle to close the books quickly and accurately because their accounting software lacks modern capabilities like real-time data and automatic consolidation.
This means that your firm doesn't have access to up-to-date information, and will always be a few steps behind.
Therefore, we put together a list of the best private equity accounting software that enables you to see current financial data quickly in one, easy-to-read view. This will save your team hours of manual labor and keep your direct reports happier as you will always be able to provide current data at a moment’s notice.
SoftLedger is a real-time accounting software platform that plenty of private equity firms use because it offers:
Here's a detailed look into how SoftLedger's accounting software enables you to deliver accurate reports at a moment's notice.
One of the key reasons private equity firms choose SoftLedger as their accounting software solution is because it offers real-time data. This means you have visibility into gains, losses, and asset balances as they occur in real-time, rather than waiting until the month is closed (which could take an extra few weeks after the month finishes).
For example, traditional accounting software doesn't show you how much you spent in January until the January books close. As most traditional accounting software requires manual data entry, this means you probably won't have accurate data from January until the end of February. This is a major issue as your company won't be able to make smarter investment decisions without current data.
However, with real-time data, you'll immediately know if last week’s expenses were higher than expected or if you'll have the cash you need to invest in a new opportunity.
Manually consolidating financial data is time-consuming as accountants have to pull the general ledgers of all of the firm’s entities and combine them into one spreadsheet. This can take hours, even weeks depending on the size of your firm.
In addition, if there is a mistake in one ledger, it will have to be corrected across all the accounts. For example, if an expense was miscalculated and it was $3,000 rather than $300, it will have to be corrected across that entity and the general ledger.
SoftLedger solves both of these problems with automatic multi-entity consolidation. Therefore, all entities flow into a single general ledger, and any adjustment made to a particular entity’s account automatically cascades to the consolidated general ledger.
As a private equity firm, you probably also deal with foreign currencies, which adds to the complexity of the accounting processes.
With most generic accounting software, you have to wait until the end of the month to apply the foreign currency rate. Therefore, you don't really know how the company is doing until the books close for that month.
Though in SoftLedger, the API automatically applies the foreign currency rate to each transaction so that you know exactly how you're doing at any given moment. It also eliminates the need for an additional consolidating process, improving accuracy and minimizing manual labor.
The traditional APIs that most accounting platforms (such as Netsuite) use make integrations very difficult. For example, a company using Netsuite would have to hire someone with knowledge of Netsuite's proprietary programming language to configure Netsuite to work with your system.
SoftLedger's API is fundamentally different.
We use a REST API, which means it's more flexible than other accounting APIs. Specifically, the data can respond to different types of calls, provide a variety of data formats, and more.
For the end user, this means that developers will spend a fraction of the time integrating the system with third-party tools.
To see how SoftLedger can save your team hours of manual labor and avoid costly errors, feel free to sign up for a demo here.
Centage is intelligent planning, budgeting, and forecasting software many private equity firms use. Reviewers say that it's a great fit for small and medium-sized businesses with a user-friendly interface that provides excellent drill-down reports.
Here's a peek into the various services they offer.
It also enables you to consolidate your accounts, create driver-based and flexible budgets, and more.
Centage also offers plenty of tools to help your team plan. Specifically, you can build a driver-based budget model in days using its pre-programmed logic and built-in financial intelligence. This makes it easy to automate repetitive tasks and reduce errors.
It also connects with GL, ERP, CRM, and more data sources so that you have access to all the data you need.
Planning Maestro is Centage's forecasting feature that delivers forecasting data with "speed and accuracy unmatched by other solutions."
With this feature, you'll be able to generate accurate balance sheets and cash flow statements with minimal effort.
It also enables you to run various scenarios to see how various changes would impact your financial future.
Prophix is an accounting software tool that helps private equity firms automate budgeting, planning, and reporting processes. Here are a few of the key features that reviewers mentioned they loved about the software:
One reviewer summed it up by saying, “[Now we can] pull data from multiple sources and compile, present, and analyze it in an almost infinite number of different ways.”
Here’s a brief look at some of their features.
Prophix pulls data from your CRM, ERP, and payroll software, consolidates it, and then provides all relevant information in one, easy-to-read document.
It also offers collaboration features so you can get buy-in from key decision makers and easily see competing interests from various departments.
Within the forecasting suite, you’ll be able to:
Prophix also integrates with Microsoft 365 if you prefer to continue using that in conjunction with Prophix.
Prophix offers several different planning options, including scenario planning, personal planning, sales and revenue planning, cash flow planning, and more.
You can read more about their features here.
If you need a platform specifically designed for planning, Planful might be an excellent solution. It is a modern FP&A platform for continuous planning and offers:
In addition, it offers automatic consolidation, which frees up your accounting team's time and helps them better utilize their resources.
Here's a more detailed look into each product.
With structured planning, you’ll be able to automatically pull data from any ERP, CRM, or HCM. Once the data is inside Planful, the system will use prebuilt financial intelligence and logic to reduce errors and provide the data you need faster.
You can also use their planning templates to clearly present the data to stakeholders and make better business decisions.
While the structured planning solution offers comprehensive budgeting, planning, and forecasting data, the dynamic planning model offers customizable and flexible models.
Here are just a few key features:
Your team members rely on excellent financial data to make better business decisions, and Planful helps you deliver by offering ad-hoc analysis, clear dashboards, and more.
It also helps your company automatically generate US GAAP and IFRS-compliant balance sheets, statements of cash flow, income statements, and more. This not only saves time but also mitigates the risk of error.
You can learn more about the various products Planful offers here.
Board calls itself a decision-making platform, consisting of planning, predictive analytics, and business intelligence applications.
Here are a few things reviewers mentioned they like about the tool:
While it has a steep learning curve, users love the advanced capabilities it offers. Here's a closer look at some of the specific features.
Board offers an excellent, centralized solution for FP&A that enables users to:
You'll also be able to conduct sales, HR, and supply chain planning with more efficiency, thanks to real-time data.
This feature makes measuring profitability, top-line allocation, and cost allocation easy.
Specifically, you'll be able to:
This enables you to make better, data-driven decisions in less time.
Board enables you to close faster as it automatically consolidates all of your financial data, eliminating the need for manual closing processes.
It also allows you to perform what-if scenarios for different consolidation methods and its full audit trails and workflow controls make it easy to remain compliant with regulations.
Board offers detailed reporting that brings together all of your consolidated financial data in one simple place. Specifically, it's designed to adhere to various local and international standards, including GAAP, IFRS, XBRL, and iXBRL.
If you're still depending on Excel for accounting processes, you're wasting valuable time and operating on dated data.
So try one of these solutions to improve your financial processes.
If you'd like to try out a simple solution that offers real-time data and automatically consolidates your data, consider scheduling a demo with SoftLedger.
A CPA with more than 10 years of varied public and private accounting experience, Ben has led many complex financial projects to successful outcomes.
Ben holds a B.S. in Accounting from the University of Maryland.