Optimising the quality of management accounts will enable you to produce performance data that is more reliable and meaningful for everyone in your business. That’s the message from Liam Bastick FCA, Director at international financial modelling and training experts SumProduct.

“You won’t get sidetracked by dead ends, and you won’t drown in minutiae,” he says. “Instead, you’ll make the right decisions at the right time, based upon the right information. But achieving high-quality management accounts is an iterative process – and that’s where Power BI can play an important role.”

Creating interactive, graphical displays helps you to refine how you probe and analyse your company’s data, ensuring that you also learn how to ask better questions, Bastick adds. “So, the iterative loop continues. Over time, you develop a much richer understanding of your business.”

In Bastick’s view, these are the three biggest ways that Power BI improves management accounts:

1. Tailored insights from customised dashboards

Power BI enables users to build bespoke dashboards for different management needs. A CFO may have one that focuses on cash position, liquidity ratios and group-wide forecasts, for example, while the COO sees real-time gross margin by product line and outstanding purchase orders.

Accountants in the CFO’s team, meanwhile, can create automated dashboards that refresh overnight in real time with the latest data from the company’s enterprise resource planning system. When they next log in, they are greeted with up-to-date key performance indicators (KPIs) and visual alerts if any thresholds are breached. That makes management accounts far more actionable.

In Bastick’s view, one example of where customised dashboards would be of great use is in franchise-based companies. “In that world, any franchisee must meet certain financial criteria to stay in the group,” he says. “In return, they receive advertising, leads and other benefits.

“If we think of, say, a hotel chain, the CFO would want to have a dashboard showing them lots of detail across the entire business. Which hotels should be incentivised? Which ones require more promotion? And which ones could the chain divest? At the same time, the financial controller of each hotel would also want a dashboard showing them how their franchise is doing as part of the wider business.”

Bastick explains that on Power BI, security settings can restrict franchisees from the broader array of data that the group CFO sees. While Excel does have its own security protocols, he says, “it’s fairly easy to break some of them once a workbook is open.”

2. Out with static spreadsheets, in with dynamic collaboration

Bastick points out that, for years, management accounts have relied heavily on static spreadsheets, whether from Excel or competing software platforms.

“By the time someone in a decision-making capacity sees and reads that type of information, it’s going to be out of date,” he says. “Power BI marks a significant improvement by enabling collaborative visualisations in real time.”

This means that in a monthly management review, the finance team and department heads can all log in at once to the same, living dashboard – filtering by cost centre, drilling into P&L variances and annotating key trends for follow-up. Accountants can discuss figures with stakeholders within the platform, tag colleagues for input and track decision rationales alongside the numbers.

“That flexibility would be particularly powerful in sectors such as fast-moving consumer goods and pharma, especially when you consider their reliance on steps like twice-daily ordering and just-in-time stock takes,” Bastick says. “So, to some extent, dynamic data ties into the basics of operations. Real-time management accounts will help you balance stock, pricing and cash flow.”

3. Enhanced decision-making through interactive reporting

In tandem with finance staff, management accounts can be shaped by input from a variety of stakeholders, from non-executive directors – who will each come from a different specialist field – to operations and the CEO.

Some of those voices may be looking for more qualitative or narrative data, rather than hard figures alone, to hone the company’s decision-making. “This is what’s known as self-service business intelligence,” Bastick says. “You can use those tools to create graphic visualisations of charts and tables that will essentially add colour to the management accounts – and perhaps even reveal trends or facts you hadn’t expected to find. You can then interact further with those discoveries by drilling down deeper to find out the underlying causes and what they mean for the business.”

Keep KPIs nimble

For Bastick, the detail that accountants can obtain from Power BI ought to help management accounts overcome the serious risk of becoming rote and stale.

One of the biggest mistakes that people can make in finance, and business in general, is to use the same KPIs for years, he explains. Once you’re on top of your KPIs, they become stats; once ‘under control’, they will not be very reliable if anything unexpected or worrying happens within the business. “It means that there are factors at work that you haven’t considered and warrant deeper investigation – and that your KPIs need urgent reassessment.”

He adds: “By helping you to create more insightful management accounts, Power BI will encourage you to keep adjusting and evolving your KPIs – which I believe will make or break a business, particularly at a volatile time like we’re in now.”