Accountants regularly analyze variances and calculate historical performance. Diagnostic analytics = “Why did it happen?”ĭiagnostics are used to monitor changes in data. Compiling and verifying large amounts of data is important to this accurate reporting.Ģ. Accurate reporting is a hallmark of solid accounting practices. Accountants report on the flow of money through their organizations: revenue and expenses, inventory counts, sales tax collected. This is used most often and includes the categorization and classification of information. Descriptive analytics = “What is happening?” To get a better handle on big data, it’s important to understand four key types of data analytics.ġ.
These patterns can help businesses build analytic models that, in turn, help them identify investment opportunities and generate higher profit margins. In turn, investment decisions can be expedited, which allows companies to respond faster to opportunities to beat their competition - and the market - to the punch.Īccountants who assist, or act as, investment advisors use big data to find behavioral patterns in consumers and the market. Tax accountants use data science to quickly analyze complex taxation questions related to investment scenarios. The result: less margin of error resulting in more precise recommendations. “A strong facility with data analytics gives them the toolset to help strengthen their partnership with business leaders.”Īuditors, both those working internally and externally, can shift from a sample-based model to employ continuous monitoring where much larger data sets are analyzed and verified.
“Accountants will be increasingly expected to add value to the business decision making within their organizations and for their clients,” comments Associate Professor Wendell Gilland, who teaches Data Analytics for Accountants at UNC Kenan-Flagler Business School. Test your IQ here”.īut why is this important? And what does it have to do with accounting?Īccountants use data analytics to help businesses uncover valuable insights within their financials, identify process improvements that can increase efficiency, and better manage risk. > Are you data savvy? It’s a key component of your Business IQ. It’s very likely that you’ve heard these expressions around the office.
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