How to start analyzing data as an accountancy firm?
Posted by Sjoerd-Jaap Westra
A big-data business world generates information at an impossible-to-comprehend rate, making it intimidating for your accountancy firm to start tackling the massive data bases available at the typical enterprise. However, incorporating data analysis in your accounting processes brings many benefits, from fraud detection to productivity improvements. Understanding what you need out of a software analytics tool before tackling a big-data set can make the difference between changing with the technical landscape and getting swept away.
Moving From Structured to Unstructured Data
One of the biggest changes when you use software for data analytics is processing both unstructured and structured data. CFO Magazine reports accountancy firms that are familiar with using data analytics tools tend to use structured data sources, such as spreadsheets, instead of the unstructured data that big-data methods commonly pick up. This data is not pre-filtered, making it impossible for a human to go through manually.
Benefits of Accounting Software Tools
Software tools, such as Unit4 for Accountancy solutions, are essential for making sense of the data generated by corporations. Data visualization tools create useful reporting output for your accountancy firm, as well as providing you with a way to pick out potential issues during auditing procedures.
One of the biggest benefits of using data analytics software for your firm is being able to look at complete data sets, instead of small subsets. A comprehensive view of the data sets you're working with allows you to identify patterns, discrepancies, and other anomalies.
The Journal of Accountancy particularly recommends data analysis software for auditing and risk assessment. Rapid technological advances are common as software development companies examine new ways to dive into the sea of big data and introduce ways to visualize and interpret the information. Your accountancy firm can also incorporate more data sources, such as checking accounts payable and accounts receivable reports against vendor files and other information sources. You gain higher visibility into the data you have on hand.
In addition, you can also reduce errors present in the data sets, with features such as de-duplication that cut down on identical records. When you eliminate the bad data present in accounting records, you have more time and resources to look at the information that really matters for your project.
The Wall Street Journal reports another major accountancy area benefiting from software analysis is fraud detection. Employee fraud can cost companies substantial amounts of money, so being able to look at a data set and point out subtle problems in accounting can mean the difference between catching theft and letting it go on for several more years.
Analysis allows your accountancy firm to quickly work its way through data sets, giving you the resources to examine unusual patterns and other problems within the data. Sometimes an obvious pattern is found, while other situations require human interpretation and insight to discover the source of the problem.
Software tools improve accountancy firm productivity by automating the more mundane parts of the job, incorporating features that improve your accounting quality of life, and providing substantial tools to aid auditing and fraud detection processes.
Customer expectations are rising
As an accountant you are facing an increased demand for your services and increased expectations from all of your customers.
If you are interested in learning how to handle these expectations read: Living up to the rising customer expectations
- CFO Magazine: Accounting's Big Data Problem
- Journal of Accountancy: Data analytics helps auditors gain deep insight
- The Wall Street Journal: Accountants Increasingly Use Data Analysis to Catch Fraud