Data analytics for small to medium sized practices

ACCA Practice Room: Data analytics for small to medium sized practices

This is a summary of an ACCA Practice Room session, hosted by Anastasia Chalkidou and Sarah Whale.

As some of the basics of accounting have become more automated, accountants have increasingly found themselves becoming valued advisors to their clients. And to do this now means accountants need a good grasp of data analytics - for two reasons. First, their clients will be sharing data with them and asking for help. And second, they need to be analysing their own data to understand their business better and better serve their clients. 

But where to begin? The biggest problem with client data is that there’s nearly always too much of it. And the biggest problem for smaller firms? There’s often not enough data to start seeing the trends you need to drive you in the right direction. Whether your practice is bigger or smaller, it’s possible you’re suffering from analysis paralysis. 

Three key skills

There are three broad areas of skill accountants need to derive maximum value from analytics:

• Technical skills
• Application proficiency
• Critical thinking and problem solving 

Technical skills include things like understanding the business you’re working with (even if it’s your own), understanding data, knowing how to prepare it, model it, evaluate it and deploy the insights you take from it. 

Application proficiency includes a lot more than just knowing how to use Excel. Nowadays, it means being able to move your own business into the Cloud, and pull your clients in there with you. It means understanding application programming interfaces and how you can orchestrate different tools to cover your clients’ needs in the round. 

Critical thinking and problem solving are probably the hardest of the three areas of skill to learn - although accountants will be familiar with them in other contexts. It’s not enough just having the data and being able to present it nicely. You have to be able to work with it, gain insights from it, and apply those insights to your clients’ business to help them succeed. 

There’s also key learning to be done about data security and data governance - something that can’t be skipped. 

Top tips for getting started with analytics 

The first step is for your firm to walk the talk and implement a strong analytics program of its own. What you can do for yourself you can do for your clients with confidence. Here are some top tips to get you started:

• Have a strategy: you need to understand where you want to go with your data, what areas of the business you want to look at, and what you want to do with your data. Do you want to change your business model? Improve processes? Productivity? Each will have a different analytic approach.
• Get qualified: You can’t be expected to teach yourself everything, not while you’re busy running a business. ACCA offers a certificate in data analytics and has playbooks you can read to help you get your head round it all.
• Look at your KPIs: your key performance indicators will give you an idea of what kind of analytics systems and processes you need to put in place. Is one of your KPIs brand exposure? If so you’ll need some social media analytics in place. How about profit? There’s always plenty to analyse there and you’ll have to take an analytics approach that filters out the noise. 
• Get to know the tools available: There are so many products and tools out there to help you get to the bottom of your data. There’s the big three to start, and it’s worth understanding them - AI, machine learning, and natural language processing. These allow you to iterate quickly, automate, and move on from mistakes at speed. Then there are all the companies with analytics platforms. Do your research and pick what works for you - you can often have a trial period, or put only one part of your business through the platform to see if it works for you. Don’t fall for the hard sell! It has to be right for your goals and your clients’ needs.( check out the tools suggestions in the Data Analytics Playbook) 

Most importantly, don’t be afraid! Data analytics might sound scary, but really it’s just a way of getting to know a business better. Start small, speak to the experts, and do your research and you’ll get on top of analytics in no time. 

Links to useful resources:

ACCA and CA ANZ Playbook in Data Analytics for SMPs

ACCA report Analytics in finance and accountancy and a quick guide for SMPs

ACCA Certificate in Data Analytics