By Andrew Nichols, Head of Analytics and Procurement at Tungsten Network
The issue of data and managing it well is rarely out of the headlines at the moment. Much has been written to encourage European businesses to get ready for GDPR and also about the suspicious working practices of Cambridge Analytica. What everyone agrees upon is that data has the power and potential for good and bad and that as a result, businesses must use it responsibly.
While the digital age has brought manifold benefits, one of the challenges is the sheer magnitude of data touchpoints that exists. It is clear that, if handled correctly, the data can be used to inform and guide a business’ strategy but the problem is that many organisations do not have the systems in place to maximise it.
According to our research, which involved speaking to 2,700 businesses, 80 per cent of firms use outdated tools and models such as Microsoft Excel for complex data analysis and financial management tasks. Clunky spreadsheets are being used to crunch vast data sets, something that they are entirely unsuited for. As a result, many accounts teams are tied up in slow, inefficient processes that require huge amounts of time, effort and concentration.
Missing out on crucial insight
It’s not just about the inefficiencies –many companies are operating in the dark without the insight their data could provide. Harvesting and analysing the data tied up in invoices provides invaluable intelligence such as deeper insight into purchasing patterns, payment processes and cash flow trends. For example, it is possible to mine the data and learn more about spend by customer and country, or trends by month, based on volume and value. This can enable companies to manage their cash better, look for cost savings and negotiate better deals.
It can also help firms manage their cash flow situation and anticipate any shortages in funds. Without technology in place, many managers base their actions on a gut feeling or wishful thinking which of course might be fine or might lead them into a precarious position. When it comes to cash flow, it is key to have as much information as possible and to know when invoices haven’t been paid. The issue of late payment plagues businesses across the world and can even bankrupt otherwise good businesses. Therefore, knowing where money is tied up and who needs to be chased is key in the fight against late payment.
Unfortunately, many firms don’t think they have any other option other than to use time-consuming or outdated methods to manually visualise their data. They are continuing in their cumbersome ways, unaware that there are many products on the market, specifically designed to help companies penetrate and analyse their data at the click of a button.
Delving into the data
It’s something we’ve been looking to tackle at Tungsten Network with the launch of Analytics Accounts Receivable, which gives businesses an immediate overview of their invoice performance, tracking invoice progression in near real time all the way through to payment. The software can be used to build and download customisable, detailed invoice reports, helping them track their invoices at the most granular level. It builds on our analytics product for accounts payable and enables companies to turn data into actionable insight.
We know that this is something that organisations are longing for – when asked, 65 per cent of firms said that they would see value in gaining more insights into their invoices. Advanced analytics tools help enterprises see where the money is tied up and this in turn puts the power back into their hands. They gain detailed insight into their financials and have full visibility of their supply chain.
Staying competitive in a data-driven world need not be a headache. With supplier analytics tools readily available, firms can obtain detailed, ready-made and real-time insight to inform their day-to-day decision making. Sophisticated data analytics tools can give firms, of all shapes and sizes, actionable intelligence so that they don’t get left behind but can remain efficient and profitable, using the power of data to the max.