Collecting and analyzing reams of financial data is an important part of an accountant’s job. From this data, the accountant is expected to extract nuggets of information about a business’s health and functionality.
Historically this work has been performed solely by the accountant, with no technical help. Today, however, a multitude of computer-based tools are available to assist in financial analysis tasks. The information derived from these tools is collectively known as business intelligence.
According to the website Online Analytical Processing (OLAP.com), “the term Business Intelligence (BI) refers to technologies, applications and practices for the collection, integration, analysis, and presentation of business information.” The purpose of business intelligence, explains the site, is to support better business decision making.
Although BI is useful in nearly every area of business, it has proven truly revolutionary in the accounting arena. Instead of spending days combing through columns of numbers, accountants can now pull out the information they need with the click of a button. Not only is this a massive time saver, it also provides more targeted data.
“You’ll get a more accurate picture of what’s worth your effort. By getting into the nitty-gritty, business intelligence sheds light on what really makes your organization tick,” explains Dennis Najjar on the website Accounting Department.
The programs and processes that generate business intelligence in accounting must be learned. Prospective accountants can develop these skills through academic accountancy programs such as University of North Dakota’s Master’s in Accountancy online. An essential part of the accounting curriculum, education in business intelligence prepares candidates to function in today’s technology-driven environment.
The Value of Business Intelligence
The ability to extract data easily is undeniably convenient for accountants. But does it really add significant benefit to the accountant’s role? According to the website LinkedIn, the answer is a resounding yes.
“Understanding [business intelligence and analytics], and where they fit into your organization, can give real competitive advantage and make the difference between success and failure…[they] enhance effective decision making, and increase the efficiencies of the organization, from an internal and external perspective,” the site says.
The accountant’s main contribution, explains LinkedIn, is in knowing what to do with the data once it has been isolated. For this reason, the accountant plays an essential role in deciding exactly what data should be mined. LinkedIn identifies seven steps that accountants should take when implementing a business intelligence strategy:
- First, identify the desired outcomes. What exactly do you want to get out of your business intelligence strategy?
- Next, drill down into how those outcomes can be achieved. You must also ensure that the outcomes are tied to the vision and business plan of the organization.
- A careful analysis of the company’s structure and requirements follows. Accountants should utilize key performance indicators (KPI) at this stage to ensure the proper data is being collected.
- When the bones of your plan are in place, get management’s buy-in. Support from the very top level is essential because C-suite executives will need to trust your analytics and tie them into the decision-making process.
- Evaluate your technology choices and decide which product best meets your requirements. If your needs are simple, a single package may work for you. If your needs are complex, you may require a portfolio of business intelligence tools. Access free trials, if available, to help you make your decision.
- When your business intelligence tools are in place, come up with an analysis methodology that works for all involved.
- Perform your analytics and then present them to management and stakeholders. You can feel comfortable knowing that your analyses are based on solid data and can serve as the basis for effective, informed decisions.
A Personal Perspective
To accountants who are used to doing everything the old-fashioned way, all of this technology might seem intimidating. But those who have incorporated business intelligence into their routines tend to be ecstatic at the results. Accountant Deshika Moodley identifies five key benefits she has reaped from the use of business analytics:
- More productive use of time. By removing the manual element of data analysis, business intelligence eliminates the grunt work from many daily tasks. “I love being able to give our directors our top 5 expenses in a heartbeat whilst in the middle of month end,” Moodley enthuses.
- Better focus on key goals. Rather than being distracted by the minutiae of day-to-day operations, Moodley has designed an interface that keeps essential updates at her fingertips.
- Customization. Moodley appreciates the ability to customize and manipulate financial reports to make them easier to analyze. “I’m empowered to draw key conclusions from volumes of data in an instant,” she says.
- Dashboards. Business intelligence programs have allowed Moodley to create dashboards to assist with product and revenue analysis. This key edge allows her to drill down on both successful and flagging product lines.
- KPI formulas. Moodley is responsible for running KPIs on a regular basis. By creating formulas that are linked to her accounting programs, she can generate the required information instantly and effortlessly. “[It allows] me to keep my finger on the pulse of the business,” she explains.
Moodley is not alone. Accountants everywhere are seeing what business intelligence can do for them. They are increasingly adopting this technology and discovering that they become better and more effective at their jobs as a result. It is a sea change that is permanently shifting the role and the importance of accountants — for the better.
University of North Dakota’s Master’s in Accountancy Online Degree
University of North Dakota’s Master of Accountancy (M.Acc.) online program helps students master accounting principles and the skills necessary to reap the career benefits of accounting at the highest levels.
UND is accredited by the Association to Advance Collegiate Schools of Business International, which only recognizes about 30% of business programs in the United States. The master’s in accountancy online program offers practitioner and fundamentals tracks. Coursework is done online, which allows busy professionals to study accountancy and earn their degree without disrupting their work or personal lives.
For more information, contact UND today.
Definition of business intelligence – OLAP
Providing targeted information – Accounting Department
The value of business intelligence – LinkedIn
A personal perspective – Sage Intelligence