Accounting Software & Data Analytics – why are they useful
Data Analytics is mainly used for decision making in a business. Decisions can be based on gut feelings, past experience or a feeling, alternatively it can be based on facts, such a data.
Decisions making can be prone to human bias but Data Analytics can reduce or remove the effects of human judgement and help us make better decisions.
Data Analytics can give a business a competitive advantage and help businesses to understand why certain things are happening in the market and they can use these results to predict the future of the market and prepare now in a measured way.
Accounting software allows us to analyse data in a quick and meaningful way to assist with decision making. There are many accounting software providers such as SAGE, QUICKBOOKS, XERO SURF, BIG RED CLOUD, BILLFASTER. This software will capture your data and you can produce data reports for current, past and future periods based on real-time information. Some software will allow a data sharing facility, which can allow the others to see the management accounts ongoingly and provide them with financial reports. You can also use the software to issue all your sales invoices and upload all you purchases and bank statements, which allows for ease of reference and good accounts management.
Data Analytics Approach
- Visualisation
Presenting data using graphs, bar charts or picture representatives can allow us to examine what is happening. It is restricted by the amount of information that can be analysed, as only so much detail within certain parameters can be portrayed.
- Predictive Modelling using statistics
Forecasting is using data to create more certain forecasts and then act accordingly.
Probability of a customer responding to a marketing campaign, what is the impact and value of that response
- Profiling
The aim is to ask the the right questions to get to where we need to be:
What is the norm is the industry?
Where are you?
Forecast a future?
Summary
Every business needs data that is accurate and pre- exists, it needs to be relevant in today’s market and the future economy. Regardless of statistics, you may still need an expert, such as an accountant or business advisor, to answer specific business questions, and process the changes needed. Having accounting software which can analyse your data gives you a leading edge in terms of making the right decisions for your business.
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