Today, we have access to more data than ever before. Big data is transforming the way entire industries make decisions, and accountants are leveraging this aggregated data set in order to extrapolate key business insights for their clients. By using huge pools of data, accountants can help their clients make sophisticated business decisions – giving them the competitive edge they need to get ahead.
Big data already has changed the way businesses and their advisors work, enabling accounting professionals to move toward more CFO-type services that many didn’t have the time or resources to offer in the past. In the future, we’ll see the roles of accounting professionals continue to evolve further.
The End is Nigh For Spreadsheets
The demise of the spreadsheet may be in the not-too-distant future, thanks to the capabilities and insights drawn from real-time data. While spreadsheets are great for intermittently reviewing data, having a truly active accounting system means the data should get pulled directly from a cloud accounting platform into analytical tools like Microsoft Power BI, Crunchboards and Spotlight Reporting.
When looking at the data and the non-financial metrics, accountants may find that their clients have not necessarily looked at that before. An e-commerce or a SaaS client may have been using Google Analytics to measure their online performance, but they were never leveraging that against their accounting software.
By using huge pools of data, accountants can help their clients make sophisticated business decisions.
Accountants at their core really are good at analyzing a business, regardless of whether they're compliance-based or otherwise. But sometimes a convoluted spreadsheet can make even the most experienced accountants feel as if they need a degree in programing Excel, not to mention, this complicated data set will be out of date a week later. Real-time reporting tools enable accountants to become the proactive, rather than the reactive, advisor.
Accountants Become Subject Matter Experts
When working within verticals, accounting professionals can extract data across the channels they’re servicing; enabling them to accelerate toward the designation of subject matter expert. By leveraging industry-level KPIs, rather than just observing the data anomalies with one client, this enables the accountant to advise more effectively across the channel.
At Xero, we're introducing Report Templates, giving accountants and bookkeepers the capability to design and compile customized management and financial reports. This release comes complete with a number of predefined templates that can be tweaked and customized with almost unlimited flexibility over the reports that can be created. All templates can be saved for future use across all clients.
This is just one of the cloud accounting advancements that will give way to accountants working outside the typical income statements and balance sheets and more into trending and forecasting. By looking to how different companies have been trending we’re going to be ahead of the problems that may arise for clients in advance.
As a result we can give advice that would lend for them to be able to make more informed significant business decisions; whether that be a new acquisition or the decision for them to close up shop, pivot or retire.
Security concerns may surface for accountants and their clients when it comes to their data being shared. As I have found, security is everyone’s responsibility. It’s about creating an open dialogue with clients, but not before doing the due diligence on the tools you’re getting the data from.
Although the vendor may not be able to specifically lay out their algorithms, by asking the questions like, “Where is the data coming from?” or, “How are you compiling it?”, accountants can provide their clients with a better sense of understanding.
By leveraging big data, we’ll continue to see a paradigm shift in the industry where accountants shift from compliance-driven advisors to the connected advisor. We’ll be able to congratulate clients on their success or correct their path before it becomes detrimental.
Xero Ambassador David Emmerman is a partner in Emmerman, Boyle & Associates in New York City. For the past 15 years, David has had a passion for working with his small business clients and his team to develop a best-in-class accounting experience. Having had a passion for technology for the past 20 years, his experience with small business owners and cloud-based solutions have come together perfectly in his role as a Xero Ambassador.