As the role of the accountant changes, the importance and usefulness of data increases proportionately.
Indeed, being able to understand data and extract insights from it is perhaps the key differentiator that the accountancy profession now has to enable its strategic shift from financial monitor to business advisor. So what can you do over the summer break to get your data skills as up-to-date as possible?
Understand the difference between data and insights
“Much of the skill is in identifying what your data actually brings in that’s of benefit to you,” says Chris Daly, Chief Executive Officer at the Chartered Institute of Marketing. The trick, Daly explains, is interpreting the data you have. “Aim to get the broader picture, rather than simply analysing only what’s in front of you.”
For example, “you can have a fantastic percentage increase but not be generating the impact you’d expect – you need to get under the skin of the figures and bring a human approach.”
Look at predictive analytics
Perhaps the most latently beneficial technology for accountants is predictive analytics – looking at a range of scenarios and making data-driven assessments. As Dan Somers, CEO at Warwick Analytics puts it, “before the big data phenomenon, finance departments were analysing the known unknowns such as profitability and return on investment.”
Nowadays, they are “not just analysing the structured information,” (i.e. spreadsheets), but are also considering “semi-structured and unstructured data, enriching traditional finance data such as SAP or management information systems with data from other departments.”
Know the legislation
GDPR came into force on May 25 this year and many companies now need to appoint a Data Protection Officer. Good knowledge of the legalities around data protection will stand you in good stead to differentiate yourself in your career –brushing up on GDPR can be a useful place to start. “The two drivers are transparency and accountability,” says Ardi Kolah LL.M, Director of the GDPR Programme at Henley Business School.
“It’s a misconception to think about GDPR purely from the point of view of compliance. GDPR is wider – it’s about reputation and controlling risk.” It’s not just about safeguarding rights and freedoms, Kolah explains, but to “deepen digital trust and – ultimately – enable companies to do more with people’s personal data. It’s a framework for the digital age, in other words, which did not exist before.”
Aim to get the broader picture, rather than simply analysing only what’s in front of you
Find causal links
“There’s the potential for huge amounts of data analysis by tracking usage of web sites and apps,” says Charles Nixon, Chairman at Cambridge Marketing Colleges. “But the biggest issue is – can you find causal links between them?” Say you have placed an advert offering services and you want to identify growth from the data take-up. “In the old days, you would be in the dark; you would say, I placed an ad, I have no idea who saw it but sales went up so it must have worked.”
Today, the data tracking makes this much sharper; “I can see how many clicked and went to the website.” The caveat for Nixon is that this “is the same scenario, it’s just more digitised. You don’t know whether it actually turned into a purchase because it’s not the same cookie.” For Nixon, this means that “you have the key, but you can’t prove the causality. How much of your data analysis is implied, and how much of it can you actually prove?”
Be up to speed on the cloud
It may sound obvious but ensure your knowledge of cloud software such as Xero, QuickBooks and SAP is comprehensive and up-to-date. If it isn’t, consider whether you need some training in order to fill the gaps. What areas are you not confident in? What’s new on the horizon? Try the extensive online resources at AAT, ACCA and CIMA for help.
Remember that robust data skills are empowering
“Technology enables us to automate much of the reporting function that has been the classic role of accountants,” says Sam Ellis, Head of Operations and Finance at InterWorks Europe. “It’s also allowing users to self-serve their analytics.” Typically, Ellis, says, “in the past we’d send a report to a client or a colleague and they wouldn’t be able to do anything with that report – they’d make requests to find out how to change different parts of it.
But now, the technology allows you to empower them to make their own changes – for the visualisation they’re actually seeing.” Not only do you get back time to do analysis yourself, “you are also enabling other people to better analyse the data you’re presenting.”
Enhance your data analytics skills
“Some accountants may look at this new technology and think it’s just replicating what they already do, which is the measurable part of things,” says Ellis; “for example, to produce a P&L or a balance sheet and ask, why is this.” What data analytics can do, however, “is to measure the things they aren’t currently looking at. It’s about freeing you up to manipulate what you’re seeing at the moment, and look it from lots of different angles very quickly.”
However, Ellis adds, “it’s all measuring something that is quantifiable. Data analytics is quantitative – not qualitative.’
Mark Blayney Stuart is Business Journalist of the Year, Wales Media Awards 2017 and Former Head of Research at the Chartered Institute of Marketing.