How to extract the right data from your financial management systemsEmma
As with all data, understanding what your data is telling you is critical, especially when extracting the right data from your financial management systems.
When investigating, researching and purchasing financial and accounting software, it is advisable to get some feedback from financial managers and financial directors who have had exposure to a variety of software packages. They can help you make an informed decision based on your business, products, size and scope of operations. For entrepreneurs and SME businesses, choosing the right software and being able to interpret the data can make the difference between success and failure. Many entrepreneurs are very sales oriented and are not experienced enough to know what to do with the data or are unable to extract the right data from their current financial management systems.
Engage the services of an experienced financial executive
In order to extract and interpret meaningful data from your existing system, or when investigating a new system, you will be in need of someone who is capable of and has the necessary experience, when it comes to extracting beneficial financial data. For those companies that don’t want or don’t need the services of a full time Financial Director or Financial Manager, there are reputable companies, such as The Finance Team, who outsource the services of trustworthy and experienced FMs or FDs on a part time or interim basis. In this way, companies are able to tap into their knowledge and expertise when extracting the necessary data from their financial management systems. These part time FD’s and FM’s are continuously exposed to a variety of financial management systems and are thus able to benefit the companies through their expertise and experience.
What data should be analysed
Being able to extract the right data from current financial management systems can sometimes be tricky. The following criteria should be taken into consideration over and above the standard criteria:
- Volume: the amount of data being collected.
- Velocity: the speed at which data is being generated/collected.
- Variety: Businesses data can come from a variety of different sources.
Financial data contains objective metrics that measure the quality of financial health of the company. Companies who can extract insights from their business data and apply those insights correctly to systems and operations will definitely have a competitive advantage over others companies that cannot.
Extracting the right financial data can make money for the business
Possibly the most feared phrase. Being able to extract accurate and timeous financial data, will avoid the possibility of a SARS audit down the line. In fact, through the correct evaluation and extraction of financial data, you could possibly “make” money for your company. Armed with this financial data, experienced FMs and FDs could possibly cut down the amount of tax payable by your company. Again, one need not engage a full time resource in order to do this. Part time and interim FMs and FDs are up to date with current tax legislation; they have to be in order to engage and add value to the companies that they service.
At the end of the day all financial management systems offer a similar range of benefits, the trick is how to use the data produced by the financial management systems to your benefit.
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