Data is something that finance departments definitely have in excess. Spreadsheets, bills, journals, and other documents all contain it. Unfortunately, having a lot of data does not ensure that you can fully realise all of its potential without compromising operational effectiveness. Up to 73% of enterprise data, according to Forrester, is not used for analytics. What then can be done to alter the situation and utilise data from diverse data sources to gain actionable insights and boost your company’s growth? Finance leaders’ needs for dynamic modelling, comprehensive data analysis, and precise planning are met by financial business intelligence.
Why are spreadsheets considered so bad?
Because it makes sense to keep a system that works well in place, many CFOs are still hesitant to switch from Excel to BI tools in finance. Spreadsheets have been used for record keeping and data analysis for so long that their value is no longer even debatable.
There are several reasons, why you should stop relying on such solutions for financial reporting and start using more updated options instead, including business intelligence software.
Human mistakes is one of the key causes of this. Numerous studies have found that 9 out of 10 spreadsheets had errors, which is not at all surprising considering the human data entry process. A single incorrect decimal point can cause significant accounting problems.
Spreadsheets also have the drawback of providing a static view of previous data, making it pointless to use them in complicated and dynamic operations. A comprehensive corporate vision cannot be captured in dry financial statements and end-of-month reports because it is difficult to turn them into useful insights.
Businesses are forced to react quickly to these changes in the financial environment due to its perpetual flux. Under these circumstances, it would be foolish and potentially disastrous to ignore the quantity of data that your systems have. Can you make use of the unprocessed data that is confined in spreadsheets? Getting a handle on your figures by skimming through hundreds of pages of standard reports is hardly a good idea.
Additionally, manual number crunching takes too much time, which not only eats up your employees’ valuable time but also prevents speedy decision-making.
Three to five days per month may be spent by employees filling out Excel files. Then there is versioning, which requires checking a dozen other files to see whether everything fits after altering a single digit, shifting working files to different shared folders, or sharing a final presentation file with some links to the working files. But what if your company’s unique circumstances call for you to make well-informed judgements more frequently than once a month or even once a week?
Last but not least, because spreadsheets do not align with the financial planning procedure, it is challenging for the finance office to gain a comprehensive understanding of the current position and to take proactive measures.
It is quite difficult to conduct plan vs actual analysis, calculate variance, and extrapolate data in Excel. The smallest modification can cause the entire structure to fall apart in an instant.
Leaning towards BI in finance is already justified by the reasons given above for why spreadsheets make the work of the finance department more difficult. This technology has amazing capabilities.
Read on to learn more about how it facilitates accounting and finance tasks and what precisely makes business intelligence so appealing to financial services.
The benefits of BI
Some people believe that BI is primarily a means of presenting data. Outstanding data visualisation, however, falls far short of the full potential of financial business intelligence technologies. Simply expressed, in comparison to other types of new chances and value this technology delivers to your organisation, the aesthetics are just a nice-to-have feature.
It wouldn’t be a problem at all if visualisation were all that was required. For instance, Excel’s features enable the presentation of charts and graphs as well. Its limitations, including those related to data size limitations, below-par collaborative features, and other issues, are relatively severe when compared to Business Intelligence solutions in finance.
Faster, ‘click-of-a-button’ updates and predictive analytics in a flash are what finance departments scream for, something like BI tools for finance. What can you hope to achieve from using technology utilising a well-thought-out strategy?
- Stakeholder involvement
The unique benefit of BI financial services is that they offer true stakeholder participation in the “process,” which entails long-term financial planning, budgeting, forecasting, and comparison. For instance, more productive dialogues within the department are made possible when a manager clearly understands the relationship between an input (such as specific indices, plans for sales volumes, etc.) and an output. Questions that come up in meetings can be handled right away with self-service BI solutions like Power BI.
- Saved time
The days when businesses could only use so many Excel files and manually match and filter them in order to obtain a complete view of the data are long gone. Business intelligence in finance is now an option, offering significantly quicker report preparation and, consequently, operational efficiency.
Add to it the fact that some firms require you to act immediately rather than waiting until the end of the month. If you work in the fast-moving consumer products industry, for instance, you need to keep an eye on your competitors and the market.
You can examine and rapidly understand operational data with the use of BI, such as, say, the outcomes of marketing efforts. If a campaign that is losing money, it is a clear indication that the plan needs to be changed, if not only slightly. Tracking low-margin or bad-selling products is another option. Excel is not the best tool for this, especially if you have a large number of product lines.
- A central location for all of your data
Imagine how much more value a finance department could provide by using the data to analyse problems and provide solutions, as opposed to wasting countless hours looking for data on operations, supply chains, HR, procurement, sales, and, well, you name it. A comprehensive BI system, or Big Data, allows for the centralization of financial data from across the entire organisation and beyond.
Employees in the finance department gain the opportunity to swiftly contribute new data to the data warehouse and interact with all relevant information in one place without having to look for extra data thanks to business intelligence. Imagine being able to funnel all of your data sources and be able to quickly visualise it.
The issue may not even be combining data from many sources. A data warehouse and an internal development team may be set up for the purpose of assisting users with managerial reporting. But even then, you can still end up with something that doesn’t fully function after going through all the corporate IT loops.
- Effective money management
The BI solution improves financial management’s efficiency on all fronts by offering comprehensive financial business insights packaged in dashboards.
– Control of cash flow
When one crisis follows another then cash flow is essential. With finance business intelligence, you will have visibility into your cash flow and be able to generate accurate forecasts to improve its health.
– Management of revenue
When the data is gathered, analysed, and visualised by a financial BI system, it is possible to respond more quickly and correctly to mission-critical decisions like what, when, and who to sell to, as well as what price to establish.
– Expense control
Any company that wants to stay in business must be able to make timely payments to creditors, which is impossible without effective expense management? Among other things, BI is made to track the business’s spending. It enables firms to acquire a comprehensive understanding of staff spending, ensure adherence to expense policies, and track expense trends by replacing mountains of receipts and spreadsheets with smart dashboards.
- Reliable forecasting
Finance-related business intelligence systems make it possible to combine the plan and the fact on a single level of business logic using a single tool. And if this tool can also demonstrate what a fact entails and why it is the way it is, that is priceless information.
- Error-free reporting
The careless manual process of copying and pasting numbers can cause mistakes and erode confidence in your financial data. Fortunately, financial Business Intelligence can take care of all this grunt work for you. You may save time, money, and, most importantly, the reputation as a subject-matter expert that “takes decades to build and five minutes to lose” by using BI software for direct data access and report automation.
- Visibility of the entire company
A one-stop shop for all financial information is what a CFO most needs. They can dive down into the reporting to find the answers to any issues regarding finances thanks to calibrated dashboards that track financial data across the entire organisation. How do the costs of manufacturing comparable units at various businesses compare? Comparing our output volumes to the same time last year, are there any differences? What factors cause the variations? How well does our performance match the budget and forecast? What products should be removed from the supply chain because they move slowly? In relation to that, BI excels in handling that area of the business.
- Useful information
The clarity of financial business analytics has never been greater thanks to BI technology. When reflected on a dashboard, hidden patterns and trends, oblique linkages, missed opportunities, and underappreciated risks all quickly arise.
By comparing financial KPIs to business performance in this way, BI tools for finance are an essential part of any modern firm. They also give a dynamic perspective of market trends, product interest, and consumer mood to indicate potential future strategic opportunities.
Make use of BI financial services to get going
In reality, a competitive advantage can be created by combining all the advantages that financial business intelligence offers organisations. You may save a tremendous amount of time on thorough and comprehensive analysis by automating number crunching, storing and processing data in one location, and presenting it in a way that is clear to all stakeholders. This ensures that data-driven decisions are made rather than ones based on intuition. And as a result, you will be able to operate more confidently and at ease in the market, while those who are hesitant to utilise the power of business intelligence software will be operating in the dark.
If you would like to see how Itas Solutions can help you and your organisation reap the benefits of BI technology in your accounting with the latest cloud solutions for your business accounting needs with powerful cloud accounting software such as Sage’s Intacct, we will only be too happy to show you the benefits and how we can help.
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