Data analytics has become increasingly important in accounting, with the rise of big data and advances in technology providing more opportunities for analysis and insight. The ability to quickly and easily analyze large amounts of data allows accountants and their teams to support strategic decision-making, drive growth and create company value. With data analytics technologies, accounting professionals are now more essential to their organizations than ever.
The International Federation of Accountants (IFAC) recognizes the impact that data analytics technologies will have on the role of accountants in the future, particularly concerning data analysis and management. According to IFAC, technology will likely allow future accountants to work with more sophisticated data, providing new opportunities to create value and drive growth. They view technology as an enabler, not a threat, and emphasize that accountants must continuously develop new skills and adapt to new artificial intelligence and machine learning tools to remain effective.
IFAC also stresses the importance of ethical considerations and the need for accountants to uphold professional standards as they leverage technology to provide data-driven insights and support decision-making. This expectation is a mission that the online Master of Business Administration (MBA) with a concentration in Accounting program from William Paterson University (WP) takes seriously, reflected throughout the curriculum.
Data Analytics in Financial Accounting
In financial accounting, data analytics can help identify trends, detect fraud and improve the accuracy of financial reporting. With training, accountants can use exploratory multivariate and inferential statistics and work with relational and nonrelational databases to extract conclusions that would otherwise be out of reach. For example, data analytics tools can monitor transactions and detect unusual patterns or outliers that might indicate fraud. Data and process mapping can help organizations identify potential financial misstatements and prevent financial losses.
Data analytics techniques and tools can also improve the efficiency of financial monitoring and reporting processes. For example, data analytics can help companies in their efforts to consistently generate positive cash flow and reach their financial goals. Data analytics can automate routine tasks, such as reconciling accounts, generating reports and preparing financial statements. Automating routine tasks frees accountants’ time so they can focus on more complex, value-adding activities, such as analyzing financial data to support strategic decision-making.
Data analytics can also greatly improve the client experience by continually evaluating a complex matrix of key performance indicators (KPIs) or parameters such as turnover of tax returns and time to audit. It can combine this analysis with feedback from client surveys for insights into optimal improvements to the client experience.
Data Analytics in Management Accounting
Data analytics plays a critical role in management accounting, providing insights into the performance of different operations and business units. For example, data analytics can use sales data to identify which products are selling well and which are not, helping organizations make more informed decisions about product offerings and pricing.
Data analytics can also help organizations monitor key performance metrics (KPIs) such as revenue growth, profit margins and customer satisfaction and adjust as needed to improve performance. Professionals can also use these KPIs to understand the performance of individual employees as it relates to the financial impact on the business. These types of analyses can also inform budgeting and forecasting, helping organizations plan for the future and make better decisions about resource allocation.
Data Analytics in Strategic Decision-Making
Finally, data analytics plays a crucial role in strategic decision-making by providing business executives with the insights they need about the business and its markets to make informed decisions. For example, data analytics can analyze customer data to identify trends and preferences, helping organizations make strategic product development investments with optimal profit margins. It can also help companies to develop more effective sales and marketing strategies.
Data analytics can also help evaluate the performance of different business units and departments, enabling companies to determine resource allocation and the prioritization of potential investments. Forecasting tools can assess the effectiveness of different business strategies, helping organizations make more informed decisions about which strategies to pursue and which to abandon.
Data analytics has become an increasingly important tool for accountants in supporting strategic decision-making, driving growth and creating value for organizations. Graduates of WP’s online MBA with a concentration in Accounting program receive the data analytics background to provide this support and grow professionally.
The ability to quickly and easily analyze large amounts of data has opened up new opportunities for accountants to deliver data-driven insights and support executives in making informed decisions. Whether in financial accounting, management accounting or strategic decision-making, data analytics plays a critical role in the field of accounting — and that role will expand exponentially in the coming years.
Learn more about William Paterson University’s online MBA with a concentration in Accounting program.
