Real world ready | Data analytics
How understanding data analytics can boost your career
Effective accounting has long required an analytical approach. But in 2024, the ability to harness the power of artificial intelligence (AI) technology to analyse Big Data is becoming an increasingly important skill for accountants and finance professionals.
Not only does data analysis save time and drive efficiency, it also offers valuable insights that allow both accountancy firms and businesses to stay ahead of the game. Here, we examine how data analytics programs are changing the way accountants work and explain why it’s an important technological trend for today’s students.
What is data analytics?
Data analytics is the process of using technology to convert large amounts of data into conclusions and insights that can inform business decisions.
It can be used to calculate sales figures, identify patterns and trends, and manage business risks – among many other things.
In accounting terms, data analytics can broadly be split into three categories:
1. Descriptive data analytics, which offers insights into the existing situation.
2. Predictive data analytics, which demonstrates what will happen in the future (according to the patterns shown in the historical data).
3. Prescriptive data analytics, which helps accountants and business decide what should be done based on the results of the other forms of analysis.
And while many firms already use descriptive data analytics to examine and understand how a company is doing, the real potential lies in using prescriptive data analytics to determine how to act to ensure success in the future.
As Beatriz Sanz Saiz, Global Consulting Data and Analytics Leader at EY, says: “There is a unique opportunity to challenge the status quo by harvesting analytics and artificial intelligence to reinvent the traditional approach to problem solving.”
Ways today’s students are likely to use data analytics in their careers include:
1
Everyday calculations
Data analytics programmes make calculating everything from expenses to revenue quicker and easier.
That’s why many accountants already use them to compute sums, averages, and percentage changes for everyday tasks such as reporting sales results and managing customer credit risk.
2
Tax management
Data analytics can help tax accountants to quickly examine complex tax concerns about investment scenarios, allowing businesses to make investment decisions more quickly.
And the importance of data analytics in this field is expected to continue to grow over the years to come.
“Amid increasing demands for tax transparency by governments and supranational organizations, many tax authorities are building sophisticated data-gathering platforms that enable matching and sharing of taxpayer data,” EY says.
“They are then using data analytics to mine this data to help increase tax collections, target compliance initiatives, and improve overall efficiency.
“Practically speaking, this means an unprecedented amount of taxpayer information is flowing between governments and businesses.”
3
Forecasting
By taking advantage of predictive analytics programmes, accountants can forecast future outcomes based on the statistical relationships found in historical data.
This in turn allows them to deliver tailored recommendations that have the potential to help their employers – or their clients – determine the best possible course of action and achieve new heights.
4
Continuous auditing
Another use for data analytics tools lies in continuous auditing and/or monitoring.
Data analytics technology can be used to extract and analyse relevant transactional data and files from the database that holds accounting data, as well as unstructured data that is sourced externally.
This is a huge boon for both internal – and external – auditors, who now have the latest information at their fingertips in a way they never did before.
“Artificial intelligence and data analytics present a transformative potential for internal audit departments,” KPMG said in a recent report.
5
Performance monitoring
Regular performance reviews are essential for businesses of all kinds. With accounting data analytics, it’s easy to evaluate how a business is doing and whether its goals are being met.
That’s why more and more chief financial officers are turning to data analytics to uncover patterns and trends they can use to drive company strategy.
It’s also why knowledge of data analytics could prove very useful if you’re aiming for the top!
6
Risk management
Depending on the circumstances, business risks can originate both internally and externally.
Either way, data analytics programmes can help to highlight the areas of risk faced by a company and can also use predictive and/or prescriptive analytics to help the company decide how best to deal with those risks to avoid them becoming a problem further down the line – making this another area where technology of this kind looks set to become indispensable.
What employers look for in data analytics recruits
There’s little doubt that data analysis is a growing field that can offer exciting new opportunities for accounts today.
But what are the skills and attributes you’ll need to build a successful career accounting-related data analysis?
According to recruitment experts, having the below will get you off to a good start…
· Good technical skills – to work in data analytics, you will generally need a good understanding of data collection and how to manipulate the results.
· A logical approach – the ability to comprehend the business context and therefore the key questions raised by a problem or opportunity will be highly valued.
· An analytical mindset – even among new recruits with no data analytics experience or training, employers will be on the lookout for candidates with a curious and inquiring nature.
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