How can financial data inform better business decisions?

Financial data plays a pivotal role to make short and long term business decisions. It helps to the management in performance evaluation, future predictions, risk mitigation and business control by means of budgeting, forecasting, resource allocations, planning & analysis, costing and risk management etc.

It is also important to understand how the data will be used and spend the time needed to create adequate data governance (e.g. who owns the single source of truth and how will it be shared or published, how will changes be communicated, etc.).

Financial data always has to be tied to actionable prompts. If you do not intend to use the data, then the report is just busy work. Example: Inventory Turnover - Are we having issues moving our inventory along the value chain? - How do I compare to industry competitors? - Do I know the answer based on the number I am looking at? If the report does not tell that story and answer that question, then why invest resources in building/maintaining it?

Usually budgeting and forecasting is done based on the historicals. If we don't have accurate data sources, forecast figures will not be reliable. So having accurate data and consistency in data across all data sources is also important for forecasting and budgeting.

Financial data plays a key role in making productive decisions for present and future of the any company. It is not just numbers, but a snapshot of health of any organization and decision making skills.

Defining the right metrics for analysis is important. Financial ratios can definitely provide a good view of the health of the business. However, linkage of financial metrics with business KPIs is the key. With the use of modern age tools like Power Apps and Power BI such metrics can be measured and analyzed on a consistent basis.

Metrics have the ability to really support the business or hinder it. The metrics have to be meaningful, ideally they should be a direct reflection of something than can be controlled by the company if needed. For example, a metric that tries to understand the impact of weather won't be as relevant because you can't do anything about it. Additionally, metrics have to be properly understood by their users.

In my experience, not just defining the right Key Performance Indicators is pivotal but also realizing the need to make changes in it plays a big role in measuring the growth of an organization. Often organizations continues to use the same KPI’s inspite of changing business or market dynamics. A big mistake!

Establishing key metrics up front is key to having an end goal. End goals gives you something to drive toward (and success metrics makes your leaders more at ease). But also remember that it's totally fine to add or remove success metrics in the middle of an initiative because you may find that certain metrics, even when going well on their own, aren't leading to success. Example: you have MQLs as a success metric - you're doing amazing attracting MQLs but your revenue is lackluster. MQLs is no longer a success metric because you're not really seeing much success.

L’entreprise doit arrimer le choix des indicateurs à ses propres valeurs et faire mieux que ses concurrents afin de se démarquer sur le marché.

Data analysis, in my view, is the art of storytelling with numbers. It’s not just about deciphering patterns; it’s about understanding the ‘why’ behind the data. In my career, I’ve found that descriptive analytics reveals historical tales, diagnostic analytics unveils the reasons behind the scenes, and predictive analytics foretells possible futures. These aren’t just tools; they are brushes that bring insights to life. Each graph is a stroke of clarity, and every chart is a window into the business landscape.

Analyze data to uncover patterns, trends, and correlations. Employ descriptive, diagnostic, predictive, and prescriptive analytics. Use visualizations to present data insights clearly and compellingly. Identify both opportunities and risks. Make informed decisions to drive growth and success.

Within this important step of your month end closing procedure or of your day-to-day job as Business and Financial analyst is important that once you have validated the source data, you are presenting data trends using standard format/framework along with storytelling; visuals like trends past or future are very effective but without a storyboard are not meaningful cannot tell the why, what and how, explaining possible scenarios including recommendations to the Senior management and the remediation plan for key deviations from targets.

Data out of context is useless. 80% achievement of specific target might not feel enough. However, what if the performance increased from 50% to 80%? Or decreased from 90% to 80%? Find the appropriate ways to display the information and it's context. Keep it simple, don't overload charts as people struggle to make sense of them. Break it down in sections in a relevant way for the decision makers.

Having the right information—at the right time—is essential to running a successful business. ERP provides business analytics solutions that are specific to your industry and will help you gain the insights you need to make smarter decisions. Epicor software features built-in business intelligence solutions that make it easier to establish financial and operational targets, visualize results, and help everyone in your organization understand their impact. Easy-to-use dashboards,charts, and reports can help you improve operations, provide greater service, and drive growth.

A good understanding of business is vital to be able to analyze the data and draw meaningful and actionable insight from the same. There are various ways of analyzing the data however unless it gives actionable insight , it is of little use.

Nothing is more powerful than seeing bottom line results when we are talking about bridging the gap between performance and results. When we are all performing well, the end result will show it. If not, we can reverse engineer that result to provide a clearer line of sight between individual actions and results. As part of the sales team, what are your metrics, such as pricing? No problem there, then what is the gross margin on sales? No problem there, what operating expenses are over budget? We should not be afraid to go down that rabbit hole in order to identify opportunities where we can contribute to better results. Finance needs to guide executives through that storyline to drive appropriate action and results.

By analyzing financial data such as revenue, expenses, cash flow, and profitability, businesses can identify trends, patterns, and areas of improvement. This information can help in making informed decisions related to budgeting, investment, pricing strategies, and resource allocation. Additionally, financial data can also be used to forecast future performance and assess the impact of various business decisions on the overall financial well-being of the company. Ultimately, leveraging financial data can lead to more strategic and successful business outcomes.

Communication is key in my opinion. You can be the best accountant in the world but if you can't make your audience understand what it is then its wasted. We must also appreciate that people have preferences on how they consume data. Some like graphs / charts, others data, some written words and some being talked through. Understanding your target audience and their preference to this, along with ensuring it can be easily explained will give it a greater chance of success.

I like to start my communication (especially in a meeting) is to set out the context, the high level what is this about, why are we having this meeting and what actions I need them to consider. I then start to build a story and take them on a journey. Introduce one point at a time and give space for the audience to process and ask their questions. Preempt their questions and try to answer them as much as possible. Don't rush through the presentation

In my professional experience, translating data insights into actionable outcomes is more than a task; it’s a strategic orchestration. Practicality reigns as data-driven plans evolve from static blueprints to adaptable compositions. Assigning roles and responsibilities isn’t a mere process; it’s a strategic alignment of resources and competencies. Progress monitoring isn’t just a duty; it’s a systematic rhythm ensuring every action aligns with the overarching business objectives. Successes and failures aren’t just outcomes; they serve as pivotal milestones and learning experiences in the continuous refinement of strategic evolution.

Yes based on the data insights, we need to discuss with department heads and management so that corrective steps can be taken so that organisation goals are aligned.

Goes without saying that all of the above steps are irrelevant if you don't action them. Financial data provides vital insights into a business's performance, enabling informed decisions. By analyzing revenue trends, cost structures, and profit margins, businesses can pinpoint areas for improvement. They can allocate resources more effectively, optimize pricing strategies, and identify profitable opportunities. Additionally, financial data aids in risk assessment, guiding decisions on investments and expansions. Regular monitoring of key financial metrics facilitates proactive decision-making, ensuring sustainable growth and resilience in dynamic market conditions.

Once we have a clear status of affairs, it's important to take specified actions on the savings or expenditure overruns, by either rationing or making the suitable adjustments.

L’entreprise mets à jour perpétuellement ses informations car ça influence considérablement la collecte et le traitement des données qui participent de sa vie. Je préconise à chaque de s’approprier les notions de la RSE (Responsabilité Sociétale de l’entreprise). C’est une approche qui permet à l’entreprise d’être beaucoup plus en contact avec les réalités environnementales et forcément participe à son essor

While budgeting and forecasting, we should always consider whether the numbers align with the organisation goal set for the fiscal year. And also the forecasting figure should always be evaluated on a continuous basis to check the inconsistency in the present situation.

Financial data is critical in informing and helping shape better business decisions. It is the base for budgeting and planning, evaluation of the company's performance by using KPIs and industry benchmarks, monitor the cash flow statements to understand the liquidity and working capital needs as well as investment decisions. A regular analysis will provide valuable insights to all parties related to the company

Otro aspecto a considerar en la información financiera y sus fuentes, se refiere al sistema contable y su repercusión en la información financiera; cuando se analizacon detenimiento, como se gestan las organizaciones económicas, sus tipos y las variedades, la forma de construir, administrar, vigilar y mantener informado un negocio; la información financiera es la mejor manera de entender la utilidad de la contabilidad

Cash flow and the nudge- one thing i prefer to see is a good cash flow. By prioritising timely paying customers, we can improve the financial position of the company. During the planning stages bottom line (profit) is given priority and in the budget stages, topline(revenue) gets priority. By consciously prioritising cash flow during delivery, we create an impression among customers that they can get early deliveries by prompt /prior payments

Data quality and integrity checks are one of the most important thing that people often ignore. Most people take the financial data "as is" from any available source without verifying if data is correct or not. It may not be possible to have 100% accurate data if you're getting the data from third-party providers, but we still need a system to identify the data errors and keep them to minimum, specially for financial data since lots of important decisions are taken based on insights generated from the financial data.