Big data is a buzzword in the accounting profession. It’s often described as too big for traditional data management to handle, streaming at a significant speed that quickly must be dealt with, and coming in all types of formats. Although the enormity of big data may be its focal point, what truly matters is what organizations do with the data that matters. This is what makes it relevant to the accounting industry. With access to big data, accountants have a goldmine from which to find additional ways to add value to your business. Here are a few reasons why data matters to your organization.
Why Does Data Matter?
Accountants use real-time reporting technology to aggregate data across and within the organization. They use this information to determine meaningful performance benchmarks. These benchmarks can show how and why the competition may be outperforming you. It will also show what you are doing well! This analysis helps accountants provide value to internal decision-makers on when and how to utilize organizational resources.
Accountants use data to consider the impact of external forces on business performance. These factors include regulatory changes, fraud, supply-chain risks, and mergers and acquisitions. Accountants use data to see the bigger picture by anticipating economic changes. For instance, social media may warn about a shift in consumer behavior. A negative correlation between data sets might be a red flag indicating fraud. Identifying these risks makes accountants better able to help clients mitigate them to protect business performance.
Client Experience (Internal and External)
Big data and cloud technology allow accountants to provide intelligent, actionable insights for their clients through regular conversations. Rather than monthly, quarterly or annually analyzing a client’s financial records, accountants use real-time data to help make strategic decisions by providing real-time dashboard updates. This helps clients develop new products and services while complying with privacy issues and ethical data usage.
Having accountants develop skills to become data-savvy advisors also differentiates their firm and increases its competitive edge.
Thanks to big data and automation, audit sampling is becoming a thing of the past. Auditors now run tests against all transactions in ledgers and look for outliers or exceptions flagged by an automated program. This creates increased efficiency and effectiveness with fewer errors.
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