By Andy Campbell, Global Solution Evangelist (PSA) at FinancialForce
Accounting has traditionally been about historical reporting—evaluating a company’s performance over the past year, the past quarter or the past month. In today’s fast-moving, ever-evolving digital economy, however, that kind of backward-looking financial reporting is no longer fit for purpose.
Instead of focusing on past events, financial organisations need real-time analytics. That’s how they can gain a better understanding of business trends and react faster and smarter to what’s happening now to gain a crucial competitive edge.
Below are five core benefits that real-time data analytics can bring to help financial organisations drive revenue growth and fundamentally improve the bottom line.
Make more impactful decisions
Real-time information can provide greater insight into variables like the number of contracts that are about to close or the number of new deals entering the pipeline. Without timely analytics, organisations must wait until the end of the month or the end of the quarter to get financial reports showing how they’re performing, where they’re falling behind, and which deals are actually closing. But by then it’s often too late to make any significant changes.
By contrast, with real-time analytics you don’t have to wait for next week or next month to arrive, instead you can see what’s happening now and take immediate action. That means you can course-correct more quickly if business is sliding off track, or you can capitalise on unexpected productivity.
Transform AR and AP
Two areas impacted by real-time analytics are accounts receivable and accounts payable. Both of these functions typically operate on a monthly basis, which runs the risk of revealing unexpected and unwanted surprises at the end of the month.
Real-time analytics removes this risk by allowing you to see which of your customers are paying on time and which are not. This opens up the possibility for building a profile of those that have a tendency not to pay. Another benefit is that you could receive warning signs on the fly, rather than waiting until the end of the month or the end of the quarter.
On the accounts payable side, real-time analytics can help you optimise cash flow by providing greater visibility into not only who you have to pay but also when is the ideal time to pay them.
Drive greater customer renewals
These days, more businesses are service businesses and customer renewals are critical. For example, a software company that sells on a subscription basis will spend a lot to acquire a customer in the first place, but succeeds through its ability to renew customers month after month and year after year.
Real-time analytics can enable you to understand the behaviour of those customers that continually renew—and the patterns of those who don’t. Then you can use that information to understand what is causing those customers to churn and what you can do to address the issue.
Generate more accurate forecasts
Again, traditional accounting systems tend to do forecasting on a monthly or quarterly basis, but the reality is that the world changes much faster than this. That’s why you need to receive and analyse data in real-time. With real-time analytics, you can run your businesses with greater confidence and predictability by driving better decision-making, more accurate forecasts and better outcomes.
Get a complete view of your business
A real-time analytics platform is not just about getting data faster, it’s also a platform for bringing together disparate sources of data in one place, whether it’s payroll data from the accounting system, sales data from the CRM system, or even employee data from the HR system. An analytics platform enables you to look at the data in meaningful ways and uncover insights you can’t get through traditional financial systems.
For instance, by integrating information from various systems, you can get a complete view of your customers. You can see patterns emerge that reveal the health of those customers—and use that insight to better optimise relationships with your customers.
The beauty of real-time analytics is that it can help you uncover new opportunities and capitalise on them more effectively. It can also help you discover potential problems and resolve them faster. At the end of the day, your business can avoid expensive mistakes, increase revenue and gain a true competitive edge.