Working With the Right Numbers: Financial Data Analysis Requires Accurate Financial Data
There is a lot of discussion these days about big data and financial data analysis. One of the most valuable aspects of the available tools for performing financial analysis, forecasting and “what-if” scenarios is the ability for a business to benchmark their performance against other businesses in similar industries. By comparing their performance metrics with other like businesses, an owner or manager may be able to identify items in the performance profile which could be improved or which may represent differentiation from competitors.
When speaking to accounting professionals about the additional valuable services they could be providing to clients by using these KPI reporting tools to identify additional consultation and advisory services clients need, the feedback I generally get from the professional is that “you have to get the numbers right, first”. It seems that, even with the ready availability of powerful and affordable software solutions to run the business, accounting and finance still tends to be an afterthought for many business owners. Relegated to the back-office, and being an after-the-fact recipient of transactional data, accounting is still viewed by many as a “necessary evil” of doing business rather than an area of potential strategic advantage.
Many accounting professionals are still struggling with finding the right approach to help clients get better financial reporting on a regular basis, in as near real time as possible, without having to practically live in the client systems. These professionals are often still approaching the problem by attempting to get the client to participate in the financial systems directly by inputting checks and payments, creating invoices, and doing other types of work the client needs to perform – and using the accounting system to do it.
This approach may well be the source of the dilemma, and all because the client is being asked to work in the accountant’s software rather than with a solution which addresses specifically the tasks the business users need to perform on a regular basis. When users have tools which don’t suit their requirements well, they tend to not use the tools properly, if at all. When users are provided with tools suited specifically to solving their functional or process support problems (Service Oriented Architecture approach, or SOA – what Doug Sleeter calls “chunkify”), usage and accuracy can increase dramatically. Getting the numbers right means getting the supporting solution right first. When these solutions are properly configured and deployed, data collection and integration can become a “stealth” process, silently passing information from one system to another, significantly improving the accuracy and quality of data.
Accounting professionals who focus on assisting their clients with applying the right solutions to support operational as well as accounting processes, and who help to create the controls around the appropriate flow of information end-to-end, are delivering very high levels of value to those client businesses. It is the assistance these consultative professionals provide, helping the business facilitate its processes faster and more efficiently, which increases the accuracy and, ultimately, the meaning of the resulting financial data.
Interested in learning more about tools which can help your professional practice get more opportunity from every client? Contact me @JoanieMann on Twitter, or connect with me on LinkedIn or Facebook.