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Day: July 20, 2020

Financial analysis Software Market 2020

Posted on by Imarticus Learning

Financial analysis software is used by companies/firms to track their financial process. It is used to measure the Financial KPIs (Key Performance Indicator) which signifies the profit/revenue-generating capacity of any particular firm/company. These software help companies in planning their company’s future and business model. In this era, cloud-based or web-based software available for Financial analysis is in heavy demand. Companies ranging from large enterprises to SMEs (Small & Medium Enterprises) use the software available in the market. Let us see about the current market condition of Financial analysis software and the market trends.

Financial analysis Software Market Overview

The global financial analytics market will reach up to USD 15.21 billion by 2025. A lot of revenue is generated by the Financial analysis software developing companies like Oracle, IBM, Microsoft, etc. Companies shift toward software from the traditional Financial analysis approach to improve financial performance, to monitor risk, to improve the accuracy of financial decisions, for cost management, etc. While using traditional analysis approach or feeding your financial statements in excel/spreadsheet, any individual will find it tedious.
These days, companies/firms replace the traditional Financial analysis methods with software that helps in planning, budgeting, forecasting, risk analysis & management. Options like data recovery and automation processes are luring companies to use Financial analysis software. There is a lot of opportunity in the Financial analysis software market in the upcoming years as the globe is seeing technological advancements.

How Financial analysis software is in demand in 2020?

The plus points of Financial analysis software which increase its demand are as follows:

  • The era of AI (Artificial Intelligence) & Machine Learning have fuelled the growth of Financial analysis software. They help in automation and forecasting.
  • Using a dedicated software will help in increasing the accuracy in financial statements of any particular firm. It will also help in storing business information centrally.
  • Strong security measures are there in the Financial analysis software with features like fault tolerance and data recovery.
  • Help in monitoring the company’s performance in terms of generating revenue/profit. It also helps in seeing whether the firm is meeting its goal or not.
  • It helps in comparative analysis and building future strategies.
  • The loss generating assets/deals can be identified with the help of Financial analysis software. Risk analysis and management can be done easily.
  • Cloud-based solutions for Financial analysis can perform analytics on huge chunks of data. These solutions provide business agility and help in collaboration between partners/firms.

How to get into the Financial analysis Software Market?

One can create a Financial analysis software if he has sound programming skills. Famous Financial analysis software SAS is written in C, MATLAB is written in C, C++. One needs to have strong computation skills and a good problem-solving approach to develop financial models. Your software must have models that can predict the growth patterns and trends. Companies and firms are preferring the software because of its ability to various works like Business valuation, Financial performance monitoring, etc. simply and accurately. You have to be familiar with the basics of Financial analysis before joining this market. You can learn from the Financial analysis courses available on the internet. You should be good in economics, finance, numerology, etc. to make and understand financial models which can be used by companies to plan their business structure.

Difference between Finance & Accounting

Posted on by Imarticus Learning

Finance and accounting are often used interchangeably and viewed in the same context. From a layman’s point of view, it might seem like the same thing but there’s a big difference between these two disciplines. What is the difference between finance and account? It’s an age-old question that is often put forward by those who have little to no idea as to what these two fields entail.
At first glance, it might look like the same because both of these disciplines deal with financial data for organizations. However, the difference between both the disciplines is enormous and they have a different role to play. Accounting is more about keeping the record of financial data as per rules and guidelines whereas finance deals more with aspects like financial analysis, how the investments are made and other important monetary aspects. Let’s delve deeper into the subject to explore the key differences between finance and accounting.
How do they differ?

Some of the major differences between finance and accounting are mentioned below.

  1. Finance tilts towards the future and accounting towards the past
    So if you look from a broader perspective you will find out that finance is more about the future prospects of an organization whereas accounting deals with the financial events that have already taken place in the past. You will see financial professionals are more engaged with sourcing capital and identifying profitable investment avenues that will give a good return in the future.
    Most professionals in the finance domain such as financial planner, investment banker or financial advisors deal with future monetary planning. Accountants, on the other hand, have to record the data of financial transactions that have taken place in the past. Accountants tend to track and record these financial data for analyzing any discrepancies or fraudulent transactions. They deal with maintaining financial statements such as cash flow
  2. Different specializations available in finance and accounting domain
    You can choose your specializations in both fields depending upon your interests. Some of the major specializations in finance include public finance, corporate finance and personal finance. Personal finance is all about finance decisions related to a particular individual. This includes aspects such as education financing, retirement planning, personal savings, life & property insurance, estate planning, etc. Corporate finance is all about handling the finances of an organization. It includes finding profitable investment avenues and maximizing returns.
    Public finance specialization deals with funds of the state, it includes providing financial guidance to government and related bodies to maximize their returns. When it comes to specialization in accounting, there are four major categories financial accounting, management accounting, tax accounting, auditing & insurance, etc. Financial accounting is the most common of them all and deals with preparing financial statement and reports for an organization.
    Management accounting is also related to guiding organizations to meet their overall financial objectives. The activities include budgeting, cost allocation and cost-benefit analysis. Tax accounting, auditing and insurance deals with accounting for tax-related purpose, it deals with inspecting the company’s financial records to check if they are following the industry guidelines and accounting practices. It has a very broad scope.
  3. Different professional qualifications and regulatory bodies
    The finance and accounting disciplines have different qualifications that an individual can pursue as per his/her interest. They can choose finance and accounting courses as per their personal preference to learn about the field. Those who want to pursue a career in finance can opt for qualifications such as Chartered Financial Analyst (CFA), Certified Financial Planner (CFA), Registered Financial Planner (RFP), etc. Those looking to pursue professional qualifications in accounting can choose from qualifications such as Chartered Accountant (CA), Chartered Institute of Management Accountants (CIMA), etc.

Also Read: What Does Finance and Accounting Do?

What is the Role of an Underwriter?

Posted on by Imarticus Learning

Understanding the underwriting process

The term underwriting came from the practice of risk-takers writing their names under the total amount of risk they took. Before going into the details of the role of an underwriter, let’s get an idea about the underwriting process and what all it entails. In the most basics sense, underwriting can be explained as a process where big financial institutions provide their services to cover the financial risk for any liability arising out of an agreement.

It can also be understood on the grounds of leveraging the risk in case of an uncertain event. The financial institution guarantees monetary aid in case of any undesirable outcomes mentioned in the contract. Underwriting is one of the most important functions in the banking and finance segment.

The underwriting services can be provided by an individual or an organization wherein the risk related to a business or investment is undertaken by the service provider for a premium amount. The underwriters are primarily available in banking, insurance and stock markets to hedge the risks.

Now that we have a fair idea as to what the underwriting process entails, let’s delve deeper into the roles of an underwriter.

Role of an underwriter

So what exactly does an underwriter do? Well, an underwriter is responsible for hedging your risk in case of uncertain events. The roles and responsibilities along with the purview of an underwriter differ depending upon what type of underwriting services are offered by them.

Underwriters primarily function in three sectors; the banking sector, the insurance sector and the stock market. Let’s look at the role of an underwriter in these contexts to obtain a better understanding of the role.

  • Insurance underwriter: Insurance underwriters play a very crucial role in the insurance sector by hedging and dividing the risk associated with an insurance policy. Insurance underwriters are responsible for reviewing the application for risk coverage and conducting a thorough risk analysis.

    Based on their risk analysis they accept or reject the application. Insurance brokers and other parties submit the insurance applications on behalf of their clients which are reviewed by the underwriter who then decides whether to provide insurance coverage or not. In addition to this, the insurance underwriters also advise on risk management issues and determine the extent of coverage for various parties.

  • Mortgage underwriter: A mortgage loan underwriter is among the most common underwriters you’ll find. A lot goes into the mortgage application process. Thorough credit analysis is performed where the applicant’s income, credit records, cash flow, savings, etc. are assessed to determine the risk associated with loaning out the funds.

    Mortgage loan underwriters are responsible for overviewing the financial track record of the individual and based on their assessment, they approve or discard the loan for an applicant. They are also responsible for reviewing the value of collateral pledged for the loan so that the loan can be recovered in case of default.

  • Underwriting in the stock market: Underwriters in the stock market are responsible for determining the price of a security and identifying the risk associate with it. Let’s take an example to understand it. You must have heard about the IPOs where a company issues funds from the public by selling the shares of a company.

    In this case, investment banks provide their underwriting services to evaluate the correct price of a security by factoring in all risks and benefits. The insurance bank buys or underwrites the security issued by the business entity and then sells it to the public. Here, the insurance banks underwrite or hedges the risk associated with the sales of security.

A career as an underwriter can be very rewarding depending upon which segment or industry you are aiming for. You can opt for an underwriting course to obtain a comprehensive understanding as to how the market functions and learn the skills needed to get a job as an underwriter in a reputed organization.

Also Read: What is Underwriter Salary