Accounting is a critical part of every business, especially when it comes to understanding how different metrics not only affect the day-to-day business outcomes but how they are impacting the overall performance picture.
The numbers will show you profit and loss, monthly revenue and operating expense, and many other critical financial measurements that reveal the true health of your business.
Like many other functions, today’s accountants need to wear more than just the ‘number cruncher’ hat.
They should be able to crunch numbers, and along the way, have a keen perspective on mining business data for new insights and trends beyond the numbers.
They should understand the key metrics driving business performance and have business dashboards at their fingertips that can be offered and analyzed for management anywhere, anytime.
Today’s most successful accountants are proactively looking for potential issues and/or opportunities that could have an impact on overall business results and help with more immediate improvements to daily operations and sales.
They should also focus on finding new and unexpected ways to differentiate from the competition.
Traditionally, accounting has focused more on fact-based, historical reporting. What happened last week, last month, last year, and how does it compare to the previous period or same time period last year? While that historical view offers the company value in analyzing results against strategic and operational plans so they can adjust going forward, it doesn’t necessarily help the organization better predict and more aggressively plan for the future.
The real value is looking at the numbers with such different ‘goggles’ that you can see (and more importantly avoid!) looming issues or challenges, and so you can offer the business new ideas for day-to-day improvements ‒ often from more unobvious areas. Working in a model where consolidated information is available in a single pane of glass without the distracting debate of accuracy, business leaders can glean information that helps identify the root cause of problems and find resolutions that prevent the same or new issues going forward.
Technology Solutions Enable Greater Business Intelligence
Finding the right solution to enable a detailed analysis of financial data is critical in the transition from looking at the historical numbers as financial data to finding the hidden triggers and predictors that give you true, forward-looking business intelligence (BI).
To see financial reporting in a way that shows where you’re going versus where you’ve been, you may need to combine your accounting package with a BI tool. Below you will see a few examples of the benefits of this approach. In these two examples, the companies are using Xero as their accounting package and ClicData as their BI tool.
Example 1: Direct Revenue Impact
To identify roadblocks that were keeping the company from meeting revenue growth targets, the executive team requested the creation of a new dashboard that would enable a clear view into a richer level of detail.
Using a BI tool in addition to their accounting software, the team was able to pull information from multiple systems including their enterprise resource planning (ERP) software, their CRM, and Google Analytics. The consolidated view of business data showed far more than just the numbers.
In this case, the data revealed a clear deficiency in one of the sales leaders which were having a negative ripple effect throughout the entire sales organization.
With that knowledge squarely in hand and objective data to back it up, the executive team was able to pinpoint the root cause and correct the issue with a staffing change.
With a new sales structure in place, improvements to the revenue numbers followed in short order. Although the company was paying tens of thousands of dollars to an external IT consultant to run custom reports previously, this kind of direct insight was never revealed.
Example 2: Quantifiable Time Savings
Another organization needed to eliminate the excessive time and resources being spent on delivering financial reports every month.
Not only was the process cumbersome and time-consuming, but it was also difficult to validate report accuracy because data was coming from so many places and being consolidated and managed manually in Excel spreadsheets. That left a lot of room for subjectivity and errors too.
The executive team set out to find a solution that would not only reduce the cost of resources but allow them to deliver more accurate, detailed data much faster, including all of the data from multiple instances of their accounting system. The BI tool helped consolidate all of the data from every Xero instance as well as add other data sources.
This new view armed the team with a rich analysis of performance at the micro and macro levels, not only saving significant time, and therefore money, versus the manual process, the executives were able to improve and speed decision making and better plan for the future.
Improve Your Business with BI
Naturally most CFOs welcome the ability to gain more insight into their data. Who wouldn’t? It enables them to provide actionable insights to the business, improve forecasting, speed decision making and ultimately makes them more valuable to the executive team.
By adding a BI tool, the accounting team can operate more efficiently and effectively, providing significant time savings. And the consolidated reporting for management is proving even more valuable in uncovering proactive ways to improve daily operations.
BI Brings Confidence
A BI solution instills confidence in your data. There is no longer the need to manually manipulate data in Excel while hoping that your accounting team will see “the forest through the trees”. Don’t expect they will magically figure this all out on their own.
Give them the tools they need to help them avoid errors (or maybe even prevent intentional modifications or skewed results), and reeducate them on why using the data to better predict the future is just as important as looking at the past.
Looking at consolidated data in an aggregate view rather than bits and pieces of data from separate systems provides an opportunity to uncover hidden trends and can be the ‘holy grail’ for predictive analytics.
Improved forecasting means you can better plan for capacity peaks and valleys that directly impact the customer experience, response time, and revenue.
Ultimately, smart BI with the right tools in hand empowers your executive team to make more informed decisions faster. Who doesn’t need that in today’s fast-paced business environment?
If your company is struggling to consolidate and access data from multiple systems, consider implementing a BI solution to pull it all together so you can almost immediately improve analytics and business outcomes.