We’ve been hearing about the importance of data for a very long time, now. Until the last few decades, there were no quick and simple automated methods commercially available for aggregating data so that it can be analyzed — and none to do that analysis. Even today, firms find it difficult to work with the data they have.
Modern accounting firms need to put data management at the center of their activities. Through it, they can not only better advise clients, they can also manage their businesses more effectively.
Accounting firms have a zillion ways data enters their care. Unfortunately it’s not all in one format or in one place. Worse, it isn’t always clear how and if those different bits of data interact. These are just some of the challenges in effective data management.
1. Volume of data:
Accounting firms’ data can come from numerous sources, such as financial statements, tax documents, and other financial records. This is on top of non-financial data and personal identifiable information (PII), and many more. Among them, there are thousands or tens of thousands of records across dozens of data points, in a truly brain-pureéing jumble of formats.
With this, you should also consider the data source. Though this might strictly be considered a function of data reliability, it would also fall under both accuracy and completeness, suggesting it needs its own category.
Inaccurate, questionable and just plain old bad data needs to be cleaned. There are automated methods for accomplishing this.
3. Data security:
Obviously, simply possessing the data doesn’t make it yours. There is an enormous amount of regulation, best practices, and laws surrounding the security of many kinds of data. Failing in this respect can mean grave consequences for firms.
4. Data integration:
Managing the many formats and sources of your firm’s data is an especially vexing challenge, Though many accounting software packages now allow you to export data in multiple common formats, not all do. Others solve the problem by allowing integration with other popular accounting software pieces but again — not all do, especially if they’re legacy products.
How to rein it all in
We’ve pitched a bunch of problems at you, so how about some solutions? No meaningful conversation about data aggregation and analysis can be had these days without discussing your firm’s tech stack — the technology you’re using to run your business. Your tech stack is the center of all the data your firm generates and receives, and its general health and well-being will be where you find all your answers.
Keep it up to date:
When your tech stack is up to date and uses vendors who still actively support their products, there’s a good chance you can work to integrate its data outputs with other pieces of your stack — you can usually find a list of integrations on the vendors’ websites or onboarding materials; if you can’t find them, contact the vendor.
Where integrations don’t exist, most modern systems allow you to export their data in multiple formats so you can re-import them elsewhere for aggregation and analysis.
If your stack isn’t up-to-date, then it’s time to take steps to get it there. This is an investment, not an expense. Automating data validations, input, and actions reduces error and saves scads of time across multiple departments — better yet, it puts the power of that data in the hands of anyone at the firm who needs it, without needing to work across multiple systems. Done well, it pays for itself in increased insights and time saved.
Embrace data visualization
Numbers are telling — as an accountant, you know this already. But not everyone can see the story behind the numbers, and that’s where data visualization comes in. Charts and graphs — even when simple — are far easier for most people to understand than raw numbers.
Many software packages in your tech stack could offer data visualization along with raw data. If they don’t, then it could fall to you to get the data into a format you and your client can more easily digest. Data visualization is especially helpful when tracking elements across time; the old MoM or YoY charts, for example.
When reporting out to your client, using data visualization wherever practicable and logical is a good practice. And even internally, visualization helps unite your data points into formats that anyone can easily interpret, regardless of their department or background.
Talk to your vendor(s)
If there’s any chance you aren’t using your existing tech to its fullest potential when scraping data, you should communicate directly with your vendor to get the lay of the land. Especially when you are already paying for the technology, there’s no reason you shouldn’t be getting full benefit from it.
Similarly, when you are replacing existing tech or adopting new tech, you should understand how it handles the data it’s given, as well as the data it outputs. Make sure the vendor is aware of what else is currently in your tech stack that it might need to integrate with, or at least share data with, and make sure you’re clear on the process for getting what you need out of it.
For Botkeeper, data insight and visualization are a big component of the platform. Our “Business Insights” module can aggregate data across multiple financial and non-financial platforms, producing a dashboard of the information that’s most important to your firm and clients in easy-to-understand charts you can download or share directly. It’s endlessly customizable and has dozens of built-in widgets you can add to your dashboard as you like. It makes working with your data far simpler.
Sound enticing? We thought so. Check it out by talking to us today!