Living in an era where technology evolves every day, we are lucky to have the opportunity to use new tools and concepts to improve our work in the accounting industry. In fact, the use of technology in accounting is not new. We use accounting systems to book entries, organize accounts and generate invoices. However, with the increasing amount of data such as historical entries, new M&As, and expanded business lines, we need new technology to convert big data into meaningful insights – this is when data analytics shines.
Data analytics is the process of digging into raw data and drawing conclusions to assist with decisions. It is the combination of automation and visualization. In the accounting industry, it is especially valuable when it comes to analyzing financial information and providing business insights to help companies make decisions. My team helps clients with their financial reporting, risk control/moderation, and performance prediction. We advise and help to automate tedious and repetitive tasks such as data cleaning and transforming and then put the cleaned numbers in a new light with interactive visualizations. Our clients are able to identify patterns, trends, and outliers in their data sets that would have otherwise gone unnoticed. By leveraging data analytics, we can offer our clients a more complete picture of their financial status and overall business health.
Here are 3 advantages Data Analytics offers:
1. A faster, more streamlined audit process
Data analytics certainly makes accountants’ lives much easier, with one of the biggest advantages being that it helps to streamline financial audits. Audits used to be performed by manually checking every transaction, invoice, and journal entry and requiring multiple people to perform. Now with data analytics, we can automate many of these processes with a couple of simple clicks and even put our hands on a larger set of sample data from the start of the process. This allows us to identify potential issues more quickly and accurately.
2. Additional protection from fraud
Another area where data analytics is making an impact is fraud detection. Fraudulent activities can be difficult to identify, especially if they are subtle and spread across multiple accounts. Data analytics can help us to flag unusual patterns and anomalies in financial transactions, which could be indicative of fraud. This helps to detect deceitful activity early, reducing the risk of harm to businesses.
3. Leaves accountants free to serve as strategic advisors
Furthermore, data analytics is also changing the role of accountants. Instead of simply being seen as number crunchers and record journalists, accountants are now becoming strategic advisors and trusted consultants for their clients. You might have already noticed the growth of advisory services has increased dramatically in the past few years. By implementing data analytics as a more efficient way to analyze data and drive insights, we help businesses to make better decisions and improve overall financial performance.
In conclusion, data analytics has a significant impact on the accounting industry. It is a valuable tool that enables accountants to be much more efficient and thus able to offer more comprehensive services to their clients. In the meantime, businesses that are open to embracing data analytics are much more likely to have a competitive advantage in their industry. As Stewart Brand put it, ‘Once a new technology rolls over you, if you’re not part of the steamroller, you’re part of the road.’ If you want to be part of the steamroller and prefer to make decisions based on data-driven insights, Wiss is here to assist you.