Many financial managers experience challenges on a daily basis. They possess crucial information that can heavily impact business strategy, but are often unable to contribute to researching the results. Since traditional reporting methods are so time-consuming, they often just forward the information, rather than analyse and discuss it. The right BI tools can change this situation.
Don’t wait for information
Business analytics programmes play a major role in freeing up financial directors, because they make large amounts of data transparent, quickly and simply.
In a previous article we looked at the difference between business analytics and the traditional style of reporting. Whereas traditional reports often concern research questions developed by IT, business analytics systems offer a ‘DIY’ analysis of the data with a single mouse click. This allows large amounts of data to be easily translated to organisation-wide, real-time KPIs and trends displayed in orderly dashboards.
These KPIs offer insight into activities and processes which can be improved, leading to increased speed, efficiency, accuracy and, of course, higher profits. In short, it’s the information that upper management needs to be able to run the company efficiently.
A major step
In comparison to traditional reporting, this represents a major step forward for financial professionals. Insight is related to what’s happening now, not at the time the database was consulted. This leads to vastly improved decision-making processes. Trends can be recognised earlier to support positive changes and tackle negative ones.
Two ways of saving time
BI tools help financial managers save time in two ways. Firstly, the required information is available immediately. No more waiting for the IT department to process a request. Secondly, they can collect much of the information their colleagues require themselves. This means no excess report requests to work through. Essentially, the financial department no longer has to provide the rest of the organisation with information. As an added bonus, everyone has access to the same information.
From accountant to analyst
The time saved can instead be used to analyse and evaluate results. It enables financial professionals to actively advise the management team on matters such as adjusting the strategy or improving business processes.
The availability of real-time financial figures in a single overview, enables financial directors to constantly monitor the organisation. Management easily assesses the cash flow, liquidity, turnover, profit, return and equity capital at any given moment. They have direct insight into outstanding payables and receivables of all business units. Discussions can always be substantiated with current total turnover, costs and profit figures, with the option to zoom in to the transaction level to discover specific causes.
With the right BI tools, gathering sales-related information is also extremely simple. It’s possible to quickly see who’s purchasing what, where and when. Sales volumes per account manager, and their share compared to the total margin, are always just one click away. Gain insight into what a seemingly successful (high volume) product actually adds to the profit. And what would happen if certain products were to be removed from your product range.
With such insights, financial directors can be effectively involved in subsequent discussions. What product lines need stronger marketing, and where? How can we optimise our stock to increase our working capital? How can we tackle projects that don’t generate sufficient revenue? Which customers have problems with payments and why? And what can we do about it?
Financial expertise as the basis of the business strategy
The information behind these events and trends is easily accessible and available for anyone involved, meaning financial experts in the company become both controllers and strategists. If administrative tasks are reduced, they can far better focus their expertise on optimising the company.