How to Use Finance Data and Analytics to Drive Business Insight
May 21, 2019
The finance department has moved far beyond number crunching and balancing the books. There’s a need for the finance leadership to turn information into actions the business can take, no matter whether it operates in services, manufacturing, or merchandising. CFOs understand their role involves strategic planning to recognize where the company has been and how it will achieve future state goals. Real-time data and analytics are the key to driving these business insights and actions.All significant decisions should be made with company finances in mind. Finance analytics help leaders make better-informed decisions on which investments will yield the highest long-term returns. Whether the human resource department is debating more costly benefits that will attract more job candidates, or the CIO needs to determine which processes need to be put in place to executive business plans most efficiently, corporate monetary insight is needed. With spreadsheets no longer an efficient way to move information through an organization, how do finance departments achieve actionable business insight?
1. Clean Information and Data
Over time, organizations accumulate vast amounts of information and store them in various places from spreadsheets to databases. Through data cleansing, all information that is incomplete, duplicated, irrelevant, incorrect, or improperly formatted is either removed or updated. Accurate customer and employee data will allow for better communication and processes, and greater legal compliance. Once company data has been updated and organized, the CFO can prove information is credible and reliable to be used for financial reporting and planning.
2. Decide Which KPIs to Focus on
The CFO should align with all organization leaders to determine what metrics, or KPIs, need to be used to support the business. With so many datapoints to focus on, the executive team should align on which metrics drive shareholder value and regularly report on these, such as gross profit margin, net profit, and current ratio. Through long-term monitoring of these KPIs, you’ll be able to identify trends and indicators of future financial pitfalls and successes and adjust current business practices accordingly.
3. Managerial Access to Real-time Analytics
The third action business leaders need to take to drive the business forward is to enable managers to make decisions through real-time analytics. With reliable, credible data that produces the KPIs you focus on, up-to-date the moment you access them, managers can make informed decisions and progress faster. At any point two managers run a report, they should be looking at the same version and same metrics. Then insightful decisions based on that reporting can be made to move the business forward.
Real-time, reliable financial analytics that focus on your particular business’ KPIs will equip your leaders to make informed decisions. From compliance management to revenue collection and process evaluation, decision-makers can understand the current state of business through financial reporting. Discover how to improve data analysis and gain actionable insights across just one, or many, functional areas in our webinar “Transform Your Workday Finance and HR Data from Rough Diamonds to Brilliant Insights”: