Accounting software: analysis tools to make your life easier

You may have strong intuition of trends and performance within your business, but analysis tools will put hard numbers against your hunches and lend them credibility.

Accurate and consistent data is vital in analysis. Without it, the exercises you conduct are at risk of being skewed and unreliable. Analysis tools can provide health checks across entire organisations in seconds using established rules each time, providing comparability and consistency. That helps with scaling up and improving efficiency.

Take time to choose the correct software

Perhaps counterintuitively, implementation of analysis tools should be an intensive process, regardless of whether you’re in practice or business. You shouldn’t be using one of these tools just by subscribing and clicking a few buttons. Every business has its own needs and you need to marry up what you’re trying to achieve with what the software can do. To be able to use analysis packages properly, you have to know the common problems that come up with them, and that only comes with testing.  

Be prepared for all outcomes

Bringing in analysis tools will expose flaws in old processes and working practices, so it’s important to be prepared for when you put one of these systems in place. It will eventually help with efficiency, but could showcase flaws at the start, so you must adapt accordingly. Another consideration to make is how to manage the transition. New analysis tools should be sold as a positive introduction and not an attack on individuals working with current processes.

Key features and benefits of analysis software

Data visualisation: analysis software can integrate data from multiple sources and provide easy access to this information, creating a single source of truth. 

Financial reporting: this helps accountants to automate and analyse financial information, generating and drilling down into data, streamlining processes and monitoring the finances of an organisation.

Trend analysis: features like descriptive, exploratory, inferential, predictive, and prescriptive analytics allow users to perform various types of analysis, from summarizing data to forecasting future trends. 

Improved accuracy and increased efficiency: by automating calculations and providing tools for data validation, analysis software minimises the risk of errors, while having the ability to handle large amounts of data which significantly speeds up the analysis process. 

Forecasting: good analysis software correctly uses current and past data to predict future trends. It can help a company to budget, create strategy for long-term goals and make future decisions.

Tips for picking the right analysis software for you

1. Check your KPIs

Knowing what you want to measure and how is a vital starting point. It defines the scope of data you’re looking at, sets your priorities and identifies which areas need most attention. Some programmes cast a very wide net, while others are function-specific, so having clarity on your focus is vital.

2. Check your needs

Sometimes, the simplest solution is the best one. Most mainstream accountancy softwares, such as Xero, Quickbooks, FreeAgent, have built-in analysis tools. While these aren’t as powerful or as specific as some of the targeted softwares, they may well meet your needs.

3. Keep at it

Giving apps like these a one-month trial is a waste of time. Like any change in habits, make a plan, give it at least three months, expect it to be challenging and stay strong.

4. Understand the software and its limitations

Many of these tools are extremely powerful and offer insight that wouldn’t be possible without them. But they assist accounts, they don’t replace them. But the process can go wrong, and where it does, those mistakes can be replicated and lead to fundamental errors. Human oversight is essential.

Further reading

Are technological developments making accounting careers more attractive?

Working with AI: boosting your career in the right way

How your accountancy practice can use software to achieve process excellence

AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.