Accounting experts have now been utilizing data analytics for their day-to-day operations.
Businesses have to adapt to the ever-changing technological trends that are continuously shaping the market landscape. Through digital transformation, organizations are able to augment their business models and improve the way they operate.
As we live in a progressively data-driven world, this has helped industry sectors to transform their meaningless data into useful information for their business growth. This has been made possible through the use of data analytics. Today, data analytics is also considered as an emerging technology in the accounting industry.
How data analytics is used by accounting professionals
Accounting experts have now been utilizing data analytics for their day-to-day operations. More so, a lot of accounting professionals these days are required to have skills in data analytics in applying for jobs.
Data analytics plays a big role on how accounting professionals make strategic business decisions and meet their clients’ requirements. This type of technology helps professionals to easily monitor, audit, and analyze their clients financial information. In addition, data analytics enables the following:
Classify and manage risks
Accounting professionals like CPAs and CMAs know how to classify risks within and outside of their client’s organization. Through different data points these professionals can determine possible risks that may emerge in different areas of their client’s business. With the use of predictive analysis, they will be able to create effective decisions that will help the company in the future.
Optimize client experience
Data analytics also serve as a competitive advantage for accounting professionals and firms as they are able to maintain their client base and also bring in more clients. Through this technology, these professionals can look through the total time it requires to finish an audit as well as the turnover tax return. Accounting professionals can also perform client satisfaction surveys through data analytics.
Track business performance
Accounting professionals also utilize data analytics to monitor how a business is performing. This can be done by looking into their financial information and identifying whether the company is able to meet their goals and is doing well in the field.
Types of data analytics and how it is used in accounting
A successful data analysis will not be possible without making use of the right techniques and methodologies. Accounting experts often utilize the following types of data analytics to arrive to a successful outcome:
Descriptive analysis
It provides insights from past information. Accounting professionals make use of descriptive analysis in standard report generation. This is also applicable in basic spreadsheet functions like sums, percent changes, vertical and horizontal analysis of financial statements, and others.
Predictive analysis
Predictive analysis determines patterns by looking through historical data. One example of this is when accounting professionals are able to predict an accounts receivable balance and collection for their clients. Through predictive analysis, they can prevent possible control failures.
Prescriptive analysis
This helps accounting professionals to specify the best option to choose to achieve a customized goal for their clients. Example is when these professionals are able to determine what action to make to decrease the time needed in the collection period of accounts receivable.
Data analytics is a new concept to the business industry, more specifically the accounting field. While you may lack the right expertise and resources to perform this process in your accounting, remember that you have other options for it. Outsourcing providers like OP360 offer data analytics services to help you out with your business growth. Let’s get started by filling out our information form!
