A finance team’s role is crucial in helping the rest of the business learn from the past and shape the future. And while accounting is built on the principle of recording and making sense of past performance, the key skills of forecasting and guiding the business are increasingly important.
Data analytics, machine learning and other technology tools allow decision-making to be guided by real-time data analysis. A company’s past performance can be analysed to a granular degree, shedding light on every aspect of the business.
Given the volume of data – there’s more of it, it’s more accessible and the analytic tools are simpler and more powerful – in theory it should be simple: more data, more insight, wider understanding of the business’s strategy throughout the business, better performance.
Not necessarily, according to David Lyford-Smith, Technical Manager in the ICAEW Tech Faculty. He says: “Every accountant has to demonstrate the strength of their assumptions and calculations, but often the end goal is not to calculate a final answer because, more often than not, there isn’t one.
“Indeed, the recent explosion in the volume of data produced and the ease of capturing it is shaping the way many businesses operate. But simply generating and managing data isn’t enough. It needs to be analysed at speed and then applied to the future direction of the business.”
Ultimately, what the data reveals has to be communicated in an engaging way that those in other business units can understand.
Visualisation is a critical storytelling tool. Human beings find it easier to process information in visual rather than numerical or text form. And while accountants can use data to build a model to produce a cashflow forecast, for example, ultimately that forecast is a communication tool – its purpose is to convince and persuade.
Increasingly, much of the accountant’s work centres on informing and persuading someone: to say, ‘This is what we know to be true, this is what we think will be true, and here are some possible different outcomes based on that; and here’s why you the viewer should be convinced of what we’ve done and why this story we’re telling is compelling and persuasive.’
The value of a mathematical model that relies on absolute truth is limited in the real world; the best models and interpretations act as tools of persuasion to show the viewer the reasoning is sound and the conclusions are worthwhile. Part of that comes from doing the right calculations, but making the presentation easy to follow and well-documented turns something inert into a living piece of insight.
The ACA is the only accounting qualification to fully integrate data analytic tools into students’ learning journey. By embedding data analytics, the ACA prioritises the need for accountants to bring their work to life.
The ACA gives accountants the necessary training to do this. The qualification not only requires development of a thorough understanding of empirical measurement and meticulous recording, but it ensures that accountants develop vital professional skills: leadership, communication and the ability to tell a story for others in the business to follow and act on.
Technology can only take you so far. But when you use it to tell a story, the possibilities are endless.