Data is at the heart of the modern world. It is all around us.
Every day, humans create more than 2.5 quintillion bytes of data.
When it comes to business, data is one of the biggest assets a company has. Yet many are failing to maximise their data, even ignoring it as such a vital asset.
Across finance, there is a huge amount of data available to accountants and teams – all of which should enable simpler and smarter decision making, driving key insights into the health of a business, its risks and opportunities.
But are you listening to what your data is telling you?
Importantly, do you even have arrangements in place to allow your data to tell its story and present a clear financial narrative?
Here, I will explore five ways to make sure you get decisions right by listening to your data and what it’s trying to tell you.
Here’s what I cover:
1. Advocate data from the top
It was only a short while ago that an over-reliance on Excel locked finance teams into a static mode.
Data was often confined to fields in a spreadsheet and you would need an Excel-formula whizz in your office to manipulate the data and get some meaning from it.
Fast forward and in today’s business world, data is seen as a dynamic and competitive asset, rather than simply static information.
It enables you to proactively plan and deliver analysis for your business or your clients.
It’s always obvious to me when working with finance and accountancy teams that those who use data well have an agile leader in place: someone who fully grasps and advocates the importance of data, and who fosters a data-driven environment in which people and technology are available to make success a reality.
Once data is advocated for at the top, buy-in from the rest of the business seems to follow.
What emerges is a culture in which data and its use is central to the business.
Ensure an agile leader advocates from the top, creating a culture in which data is highly valued and where everyone buys into it and wants to listen to it.
2. Set your team to (new) work
If you’re the agile leader in your team or company, then part of your role will be to re-position finance as a strategic voice and ensure your people are central to how data is used: to act quickly and make value-added business decisions, forecast the future, and maintain a competitive edge for your business.
Gone are the days when finance teams were solely responsible for bookkeeping and processing transactions or working discretely behind the scenes as number crunchers.
Many day-to-day finance activities have also been digitalised, therefore freeing up time for the finance team.
So, if spare capacity is there and savings are to be had, your finance team should be encouraged to get to grips with data, taking the time to learn about your business’s key challenges and identify opportunities and areas to improve… and then be the ones to look for ways data can add value.
Encourage your finance team’s unique view of the business to analyse and interpret your data, taking responsibility for listening to what it is saying and passing this on to internal stakeholders to help them make better decisions.
3. Give your team the tools to succeed
A culture of data analytics and the evolving role of the finance team requires a platform that offers the processing power and ease of use to streamline finance processes and to drive valuable insights in an instant.
It doesn’t seem that long ago that Computer Weekly reported: “Almost three-quarters of financial professionals say they struggle to collect data from multiple sources and perform the analysis required to answer questions about corporate financial performance.”
Luckily, the technology is now here to process and drive huge amounts of data.
The right technology will provide finance and accountancy teams with instant access to powerful data and analysis, helping them do their jobs better by providing accurate insights that are right at their fingertips.
A cloud-based financial reporting platform is a good place to start automating compliance and statutory reporting, regular management information reporting, and improved accuracy reporting for multi-entity consolidations.
4. Start listening to your data
With the above in place, you’ll be primed to start listening to your data.
Data analytics can then be applied in a wide variety of ways, such as developing company goals and objectives, identifying opportunities, creating financial policy, evaluating trends, and more – providing CFOs, finance directors and accounting managers with reliable insights they need to make critical decisions.
One of the clear benefits I often witness when data is utilised and listened to is that it locks you into a successful feedback loop.
One in which leadership has advocated for and backed a greater emphasis on data and the finance team’s evolving role; and where the finance team, in turn, are better able to support leadership and management by providing visible, regular, timely and accurate data reporting.
Be bold and confident in the way you start to listen to your data.
Now is the time to fully embrace it, because getting value is what comes next and that’s the end game…
5. Get value from your data
Data is often talked about in terms of the 3Vs: volume, velocity and variety.
Once you have the technology in place to handle the sheer volume, velocity and variety of data, a fourth V is the end game: value.
By getting value from your data, you will have achieved a seismic shift away from a static mode of working to one where data is dynamic and enables your people to be inquisitive and follow hunches, querying data for answers, exploring questions such as “what will happen next?” and predicting outcomes.
Top tips on how to get value from your finance data
- Data can help you understand the health of your business and where things are working, enabling you to seize and leverage opportunities. For example, sales data and metrics can be utilised to know when to spend more on marketing or a specific campaign. Having instant data feedback in place will help you to understand whether an opportunity exists and, if it does, to turn up the dial.
- Current data can be used to understand and predict risk. By utilising a finance reporting platform’s in-built triggers and notifications, you can ensure data is actionable and capable of alerting teams of potential issues and problems.
- Having accurate, timely data across multiple dimensions allows a business to do three dimensional forecasting and business analysis, such as cash forecasting, revenue forecasting, sales forecasting, and budget versus actual. You might also forecast P&L (profit and loss), cash flow and balance sheets (3D reporting).
Across finance, there is a huge amount of data available to accountants and teams.
But are you listening to what your data is telling you?
You can make sure you get decisions right by listening to your data and what it’s trying to tell you, starting with an agile leader in your business who will advocate for data from the top.
Then encourage your finance team’s unique view of the business to analyse and interpret your data.
Give them the technology to do so and let the tech start driving the value you can get from data, ultimately helping you to make smarter business decisions.
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