“Those who have the knowledge, don’t predict. Those who predict, don’t have knowledge.” – Lao Tzu, an ancient Chinese philosopher.
Where the demand grows for lean operations organizations are risk-averse and to defend the financial analysts are the ones with the most lucrative backdrop. With their analytics-driven solution, the organizations are breathing relief in having a concrete ground over the actions. In recent times there is a rush among organizations to become data-savvy, not much on the application of data usage.
In a survey of 2019 by Deloitte U.S., it was found that almost 63 percent of the executives denied that their organization is ‘truly’ analytics-driven. On the other hand, 67% say they are not comfortable accessing or using data from their tools and resources.
The time has come to switch to the bigger screen for the data-driven organizations where actual strategies can be derived from the collected data making way for robust financial plans. We need more departmeá¹t built analytics team for finance who can make easy plans that not only speak sustenance for the organizations but a sure growth strategy for the next financial year.
Various strategies are being extended forth to perform criteria like gap analysis, training academies, up-skilling programs, certifications, reimbursement of tuition, rewards, and recognition, etc. But this is no easy task. Becoming a data-driven organization is very challenging and entails significant investment and persistence. Up-skilling or reskilling employees will not happen just with capital investment or training programs.
What is Financial Analytics (FA)?
A short preview first, about one-third of the finance function can be handled with Finance Analytics. Yet, it is failing to supplement the modern decision-making process due to the misuse of analytics. Data suggests that even 1% of revenue per the decision adds up having a huge impact on the businesses.
Deriving a financial statemÄá¹t after analyzing the procured data assists in decoding the financial and other processes and status are analyzed through management decisions that service organization’s interest. The statement, profitability, income, expenditure, asset value, liabilities, and other parameters of financial health and prospects of the company, everything comes under financial analytics.
Financial analysis is more of an assessment and how effective is the investment of an organization or business, to check off operational funds, to secure debtors, and raise all claims surrounding the business assets. Plus it’s an important tool that helps to evaluate whether the purchase element worths the investment or can fulfill even long-term targets. In a nutshell, FA can combine income statement, data, cash flow statement, balance sheet, and many other, rather a multifactor dependent valuation, represented in an interactive form.
Benefits Of Financial Analytics
Over the past few years, organizations are roping in dynamic capabilities in improving financial performances. Other than drawing annual reports of finance every year, CFOs today are grasping bigger and better opportunities by analyzing past financial records and comparing performances with the contenders. Compounding financial data with operational data with exte
al inputs from social media, demographics, and big data, finance analytics will provide both speed accuracy in finance. This is because financial analytic can prepare to view into the deeper prospects, magnifying each cluster for a more detailed overview.
What are the Career Opportunities for FA?
Over the past few years, organizations are roping in dynamic capabilities in improving financial performances. Other than drawing annual reports of finance every year, CFOs today are grasping bigger and better opportunities by analyzing past financial records and comparing performances with the contenders. Compounding financial data with operational data with exte
al inputs from social media, demographics, and big data, finance analytics will provide both speed accuracy in finance. This is because financial analytic can prepare to view into the deeper prospects, magnifying each cluster for a more detailed overview.
Role of Financial Analytic Professionals
Finance Analytics is a wide job role and can range from hedge and fund analysts to operational and risk analysts. you would need to have sound knowledge in finance and accounting to be an analyst.
Key Responsibilities are as follows-
Grow financial performance as well as financial results, trends, and variances.
Create recommendations with respect to the needs of the management.
Create financial models for valuation, planning, forecastingr
Capital budgeting as well as expenditure planning.
Reconcile transactions by cross-verification of outgoing and incoming datar
Do comparative analysis and marketing research for supporting inherent financial analysisr
Responsible for up-keeping technical knowledge of financial instruments, market conditions, and trends
How to skill F&A professionals with Analytics?
There has to be a change in mindset at every level of the organization. Therefore, driving cultural change is paramount. In addition to the traditional training methods, educational programs should be more engaging, the workforce needs to break silos, collaborate and learn not just the use of analytical tools but focus on the outcomes and solving a real-time problem that the organization faces. This requires capital investment, an intent to up-skill, correct tone at the top, and most importantly a cultural change. A prime example is the banking system in India. Computerization of public sector banks and their evolution from the hardbound ledgers to core-banking would have never been achieved if the employees didn’t adapt to the change, adopt new technology, and most importantly bring about a shift in mindset.
To ‘win the war of skills’ Indian Institutes of Management-Lucknow in collaboration with
WileyNXT has launched the Analytics for Finance & Accounting Course.
For over 200 years, Wiley has been helping people and organizations develop the skills and knowledge they need to succeed. They are dedicated to developing efficient learning products, digital transformation education, learning, assessment, and certification solutions to help universities, businesses, and individuals move between education and employment and achieve their ambitions.
Miles Education is the channel partner for the course. For more insights keep an eye on the Miles Education website for more updates!