So far, big data and predictive analytics have been considered an area of strategic focus primarily for CEOS and marketing executives, but big data also presents a wide range of opportunity and strategic advancement for the financial branch of executive decision making. CFOs can also tap into this trend and start using this vast field of available raw material make planning decisions and execute short and long term financial initiatives.
How can CFOs and higher level accounting managers use available analytics to reduce error and set their companies on the path to financial success? Here are a few ways these new data tools are being applied in 2014.
Budgeting and Long Term Planning
Forecasting models built around predictive analytics can help financial managers sidestep error and reduce waste. Specifically, big data can help long term planners predict targeted areas of future need.
Expanding the Role of Accounting Pros
While public accountants are primarily deployed to keep company financial reporting and tax issues complaint with legal regulations, this may change in the near future. Big data allows accountants to make specific recommendations and expand their roles as company financial advisors.
Advanced Analytics and Profitability Modeling
A close examination of budget variances, both past and future, can help financial experts identify and anticipate issues inherent in annual and long term business cycles. Big data and predicative analytics reveal hidden patterns in budget fluctuations, and once these variances are visible, forecasters can take appropriate action. Profitability modeling uses some of the same forecasting and planning techniques to determine the outcomes of a range of strategic decisions. Idetifying the optimal model can help CEOs make decisions about resource allocation.
The tools that generate the big data points that help marketing pros can also be used to track vast numbers of individual transactions. Once financial managers have the ability to give equal careful attention to every single account and every single exchange, fraud and odd patterns will be easier to detect and examine.
Can big data support your financial management strategy? Can it help your accounting team make better decisions with less risk and wasted effort? For more information on how to strengthen your teams by strengthening your data resources, reach out the DC financial experts at Cordia.