Big data: The Future of Accounting

Data and accounting go hand in hand, and as accountants our day-to-day lives centre around the interpretation and understanding of data. Financial data underpins everything we do from auditing, reporting, and sharing insights.

But what if we told you there’s more to data than simply looking at what has happened. A way to use data that provides accurate insights and helps you prepare for the future? Welcome to the world of data science.

What is big data?

Big data is the term used for large volumes of data both structured and unstructured. Through data science practices, this data can be grouped and interpreted to provide in-depth insight and analysis.

Data science is the process of using scientific methods, algorithms, and technology to compile data from multiple sources and extract actionable insights. Using these methods, data can be harnessed to show future scenarios, predict trends and uncover opportunities.

Why does data matter to accountants?

Sales were through the roof this month but profit isn’t what you expected. How do you uncover the reason for this and make sure it doesn’t happen again? The answer is data.

Accounting traditionally focuses on historic data – what happened in the last period and how does it compare to the previous period? Data can do so much more than this though, it can arm you with the information to make better decisions, while minimising the potential for mistakes or losses.

Accountants are now also playing a more important role in business decisions. You may have noticed your clients turning to you for financial advice before making decisions, or perhaps you’re being asked for more in-depth reporting to anticipate future trends. Using the right data enables you to deliver these insights and drive deeper relationships with your clients where you contribute to the overall sales and operational strategies.

The Institute of Chartered Accountants also recently published a report looking at how data and analytics are set to impact the accountancy profession. Its findings show that data will “enable the accountancy profession to radically improve decision-making across organisations”

What data is important to accountants?

As an accountant, data is your ally but it’s important that you are using the right sources.

Historical Data

Historical data refers to the information from a company’s financial past. This includes yearly revenue, stock price valuation, cash flow information and much more.

This data can be used to look at previous financial events so you can spot any trends and understand what caused them, and what impact they had.

Predictive Data

Predictive accounting uses the data available to you anticipate future financial scenarios and proactively prepare for them. Using data in this way will enable you to spot potential problems and adjust to minimise their impact and severity.

How do you find the data you need?

To use data successfully you’ll need to make sure you’re using accurate data from the right sources.

Enter Panintelligence – A business intelligence tool designed to seamlessly integrate with accounting software sure as Sage 200 and Sage 50. A three-in-one solution, pi combines business intelligence with quick and easy reporting plus powerful predictive analytics. Panintelligence does all of the heavy lifting for you, simply input the data sources you want to use and schedule your reports.

To get started with Panintelligence contact our consultants by calling 0121 323 2304 or email us info@softext.co.uk.