The bold new frontier of data
Great opportunities await accountants in analysis, forecasting and advisory
Is your firm an advisory hero? With the right forecasting and data analysis tools, it could be. “Firms that haven’t moved in that direction [of advisory services] are kind of missing the boat on the fact that they are sitting on the most powerful piece of information that their clients need help with, which is this wealth of business data,” said Madeline Reeves, director of market development for Fathom, a provider of management reporting and financial analysis tools. “They sit at this perfect apex where they can be the translator, essentially, of that information and provide so much value to their clients.”
Today’s clients are increasingly looking for proactive advice. With clients’ financial data and access to innovative technology at their fingertips, accounting professionals are ideally positioned to fulfill this need and help clients make smarter business decisions.
Judging by the numbers, data is often a tremendously underutilized tool, and for those accounting professionals looking to provide clients higher-value services, there are significant revenue-generating opportunities to explore.
Pwc’s 2016 “Big Decisions Survey” of more than 2,100 company decision-makers and leaders found that two-thirds (61 percent) of respondents acknowledged their companies could rely on data analysis more and intuition less. “They don’t consider their own organizations to be highly data-driven. This puts them at risk of being surpassed by their more data-driven competitors, given recent advances in technology and data and analytics techniques,” the survey stated.
More specifically, the survey found that 56 percent of respondents said they mostly use descriptive (“What happened?”) or diagnostic approaches (“Why did it happen?”), and 29 percent said analytics are predictive (“What will happen?”). The most sophisticated companies (13 percent) reported using prescriptive approaches (“What action should be taken?”).
“Decision-makers acknowledge it’s not data or analysis that holds them back from making decisions. Instead, they’re more likely to feel limited by a whole host of other factors: availability of resources, budgetary considerations, issues with implementation, leadership courage, operational capacity to act, policy constraints and poor market responses,” the survey stated.
Meanwhile, a separate study on the small and midsized enterprise market found that SMES are often more nimble and able to act on insight quicker than their larger peers. The research also suggested that many do not shy away from technology.
According to Dresner Advisory Services’ 2018 “Small and Midsized Enterprise Business Intelligence Market Study,” SMES place their topmost focus on basic business intelligence technologies such as reporting and dashboards. Small organizations are also more likely to engage software-as-a-service and open-source software strategies.
Helping clients — regardless of size — better understand the data they have to mitigate risk and improve business performance can help accounting