If you are in finance and accounting, doesn’t it seem like everyone outside of your sphere of influence appears to be up to their elbows in the latest data analytics tools—while accounting is stuck like a truck in mud with Microsoft Excel spreadsheets?
Thanks to the meteoric rise of all things automation, there is an increasing expectation for accounting to be more focused on interpreting and analyzing the financials— and not just in crunching the numbers. Why you ask? Or more importantly, what can this renewed focus and interest in reporting and analytics do for an organization? Allow us to explain.
Specifically, analytics in accounting works differently than it does, for instance, in other fields and disciplines. In accounting, analytics can help identify potential risks, find opportunities to boost process efficiency, and empower everyone from the accounting, audit, and business teams to the CFO to get a better sense of the financials. Some might construe it as a zero-sum game. We like to look at it as an all-in game in which analytics can not only make the accounting department more efficient, but it can also help financial statements tell a broader, stronger, and more informed story of the business.
To be clear, the use of analytics by accounting professionals is not new. Reporting on trends and past performance with the data at hand is something that many finance teams have been doing since the . the discovery of fire. However, all kidding aside, what is evolving and growing is a) the volume of data that we are creating, b) the availability of computing power to process and analyze it and c) the number of accounting strings to capture more data such as division, subdivision, regions, locations, product lines, etc. Let’s face it, accounting strings are growing – the old 100-6100 accounting strings are probably a thing of the past. The new is 100-6100-350-100-250-…-….
So, how can optimized reporting and analytics take your organization to the next level? To begin with, it is more than just the collection of the data itself. Optimized reporting involves pulling data from a broad spectrum of sources to provide management with the valuable information they need in order to make insightful business decisions. The future is all about merging and creating an amalgam of data that joins financial and other operational data; and the most efficient way of accessing that type of data is with a solid analytics and reporting software package.
Ideally, an optimized reporting process would inform managers of only the most relevant information they need in order to make well-informed decisions. With the right finance and accounting software tools though, robust reporting and analytics can not only help business owners automate the reporting process, but it also opens a treasure chest of more interesting and actionable information than one could get from a simple, traditional financial statement.
For years, accounting teams have been branded as the scorekeeper, or the keeper of the flame, so to speak. Their role was simply ensuring proper transactional accounting and a strong governance and controls processes. As a result, much of the analysis, if any, has been focused on efficiency and risk reduction.
The times though, they are a-changing, and rapidly so. As accounting organizations are now increasingly seeing more business exposure, with a greater expectation or greater role in decision making and support. Let’s be clear, the evolution of tools that act like a Finance or FP&A department are helping Accounting Teams go beyond traditional roles without hiring or building out a bigger Finance department.
The problem is that many of the tools Accounting uses every day—the ERP system, other transactional apps, and even closing tools like task checklists—simply aren’t designed to help with the bigger picture activities, like financial analytics. Unless you have a product like AnalyticsFYI from FYIsoft.
AnalyticsFYI, for example, can analyze decades of historical data and can help accounting teams understand how their company growth has moved with economic indicators like GDP over the past decade. In addition, AnalyticsFYI gives teams the power to more accurately project cash flow, even in the midst of uncertainty like 2020 brought us all.
In order to get to the next level, accounting organizations know that they have to upgrade their financial close platform to reduce manual reconciliations and close checklists. Financial reporting tools like ReportFYI that can provide built-in flexible reporting and analytics can not only help accounting solve the business questions of today, but also those that they aren’t even aware of yet! This way, Accounting doesn’t just cut the manual effort through automation—they can also perform better reporting and more financial analysis, all in one fell swoop, on one platform. In closing, if you feel like you need another set of eyes on your reporting and analytics capabilities, we can help you assess how to get your accounting org to the next level. In the meantime, feel free to request a demo and one of our experts will be in touch.