Role of Business Intelligence Techniques in Accounting and Finance

Bookkeeping services are essential because they provide complete fiscal supervision. To transform your organization for greater effectiveness, proactive finance functions are needed.

Finance executives have moved ahead with their role of being bookkeepers to strategic gurus and BI helps in this transition; the business intelligence techniques you employ in account and finance provides an answer to all your complex queries.

By gathering accurate data and providing the right data to the right set of people at the right time, BI helps the finance executives to make the right decision. The efficient delivery of data is not enough, so Business Intelligence aids organizations in moving their focus to make it a smart enterprise model.

With the adoption of the strategic approach to data, just efficient data delivery is not enough; it was good when the organizations relied on a tactical approach to data. To achieve the strategic approach it is imperative to apply suitable filters, and extract actionable value from financial and operational data.

To get into this transformation and be in line to be called the smart enterprise that is effective and sustainable, it becomes crucial for all employees within the finance function to be empowered to make informed decisions.

In this fast-growing world, the Conventional BI system that needs experts to interpret data and generate reports for other employees, is not enough. Employees must be armed with applications that provide analytics and enable innovation and improvement in performance.

What is Business Intelligence?

BI is the in-depth analysis of factors that are defined as the standard for the success of an organization. Taking an example, your digital marketing team produces a report that gives details of the ROI of each social media campaign that is going on.

If you are running an effective BI assessment it will help in breaking things down. By choosing key performance indicators, better known as KPIs, you can derive an explicit and comprehensive understanding of the general data.

This helps you in getting a more accurate picture of what’s worth your effort. In addition to it, by getting into the nitty-gritty and fundamentals of the business, BI throws light on what really makes your organization grow.

Business intelligence is one of the most useful tools that helps in analyzing and getting closer to the in-depth picture of business in terms of accounting practices.

Objectives of Business Intelligence

To make good decisions in business it is important to have high-quality information and key performance indicators (KPIs) as its basis. But when it comes to the merging of the information, it becomes the biggest concern. In a big company, it really becomes difficult to find documents, spreadsheets or databases that get hidden but contain a lot of relevant information and are difficult to merge. BI can be really advantageous as it provides all the necessary information at the click of a mouse.

The main objective of using Business Intelligence is the improvement of the decision basis. As it is very evident that usually the decisions are taken on the basis of the available information but with better preparation of the information as well as with multiplicity of information the decision substantially improves.

The second objective is to increase the transparency of corporate actions with the help of BI. The employee is able to understand the company’s decisions and take responsibility for his area through facts and operating numbers as BI enhances visibility. 

How Does Business Intelligence relate to the Technology and Methodology of Accounting?

BI helps in providing an effective example to the heads of the business that translates to productive accounting practices. The BI software is equipped to organize a large magnitude of data. This is the reason reporting, dashboards and layout components become essential to rely on to make sense of what’s going on.

The Teams that make use of these tools, customize and modify these data to increase the understanding. With the growth of the company, it becomes easy to manage complicated bookkeeping tasks if you are having a firm knowledge of how to communicate complex data clearly.

BI tactics used in Bookkeeping

It is always assumed that the KPI’s or the Key performance indicators are for production line managers, retail sales staff and internet marketing teams only. But, measuring the performance, keeping sight of trends going on in finance and identifying valid solutions to the ongoing problems are some of the important tasks that the accounting departments commonly use them for.

Taking an example of your accounts payable division you can understand the importance of BI. Most of the time account division is worried about factors like invoice amounts, but gathering data about how long it takes an invoice to be paid from the time of its receipt or the number of errors in the invoice is also very essential to identify critical snags in existing processes.

In addition to this, accounts receivable departments can further use KPIs in order to forecast cash flows in a precise manner. This can simply be done by grouping the accounts with the help of the age. If you want to have an idea about the administrative cost then it is needed to Track disputes with credit account holders, collection-agency resolutions and litigation. This gives you an exact picture of how much you’re actually spending on administrative costs.

All these practices show that BI helps in quantifying the performance of the accounting services. If your business accounting service provider is transparent about its progress-tracking and oversight methodologies then it can help you go a long way.

Endnote

Business Intelligence is helpful for the business and is very crucial in taking important decisions for the company. It assists in optimizing business processes, minimizing the risks involved, reducing the overall costs, and increasing added value by analyzing each and every data closely and using the bulk data in the right way. Thus, making your enterprise an effective business model.