Financial planning requires just that—planning. After all, it’s not called “financial guessing,” or “financial shot in the dark.” And to plan effectively, you need access to real-time data. You also need a visual analytics solution that allows you to clearly communicate the details of that data.
When you implement a visual analytics solution, you’ll be in good company. According to Accenture’s 2014 High Performance Finance Study, 39 percent of respondents plan to increase investment in cloud computing and Software as a Service by 25 percent over the next two years. And 72 percent of CFOs already rely on insights developed from Big Data and analytics to make better decisions.
Tell the Inside Story with Data Visualization
Real-time data is a must for managing your profitability—it allows you to make decisions and develop budgets and plans based on the most current information available. But a visual analytics solution is also essential for demystifying the financial planning process. The right solution allows you to pull together all relevant data across multiple departments for analysis and interpretation. Visual analytics can help you illustrate your revenue pipeline, production costs, and accounts payable balances to your entire company with clear, well-designed graphics that are much easier to understand than complex spreadsheets.
Think of it this way: raw financial data provides information about the inner workings of your company. Visual analytics leverages that information into a clear, coherent story that’s easily understood by everyone in your company, even those without a finance background. And when visual analytics are extracted from the real-time data in your existing CRM or ERP system, there are no data sources to reconcile. You’re always working with the most current information, so you have a single source of truth for the entire company to reference.
Accurately Forecast Revenues
Visual analytics can help finance teams forecast revenues more accurately by identifying trends and anomalies. For example, a data visualization showing revenue by source can be useful in determining which customers to target in marketing efforts—and how much additional revenue those customers could bring in.
Manage Costs and Cash Flow
Clear data visualizations are a great tool for monitoring costs and cash flow. They show everyone at a glance when and where big spends are happening, and whether cash on hand is sufficient to cover increased costs.
Data visualizations can also be used to create in-depth reporting mechanisms that highlight areas of risk exposure so that those exposures can be mitigated. For example, a data visualization might show the company’s total credit risk broken down by industry, which will quickly allow decision-makers to see whether risk is concentrated too heavily in one sector. Using real-time data, as opposed to outdated extracts, means that the information is always up-to-date. Instead of worrying about whether the numbers are accurate, the responsible parties can instead focus their efforts on how to re-balance the risk.
Increase Accountability and Improve Transparency
Finally, visual analytics provide a powerful tool for increasing accountability by improving transparency across your organization. Visual reports will show exactly how each department is performing. For example, one simple data visualization can illustrate the precise costs of current sales and marketing efforts, so key stakeholders can decide whether the company is receiving an adequate return on investment. You can also create a data visualization to show the status of all accounts receivable to easily see which accounts are current and which are delinquent.
Best Practices for Finance Departments
At iCharts, we’ve developed pre-built interactive dashboards that have been proven to increase profitability and cash flow. Our iCharts CloudScale customers can access these dashboards as a standalone product or as an integration within NetSuite.