- Business intelligence and data visualisation tools can help businesses gather and interpret data.
- Small businesses may have smaller budgets, but there are affordable BI tools out there they can use.
- By using BI and data visualisation tools accountants can help clients understand their business better.
By Sholto Macpherson
A cattle feed supplier in New Zealand couldn’t work out why it kept running out of stock. Then research revealed that farmers would leave their orders to the end of the week, resulting in a delivery bottleneck, says Warwick Russell CA, the managing director of Auckland-based SMEtric Insights.
Russell connected the feed supplier’s accounting, inventory and logistics software to a data visualisation tool to track what each farmer had purchased and when.
“Now we can identify the farmers that haven’t placed an order that week and chase them up to avoid last-minute orders,” Russell says. “You can’t see that when you’re looking at multiple systems.”
Picture: Warwick Russell CA.
Business intelligence tools with data visualisation capabilities provide a much more powerful form of reporting than the standard reports generated by accounting or business software. And the cloud computing revolution has made them affordable even for small businesses.
In the above example, the Kiwi cattle feed supplier was using small business software – Xero for accounting, Cin7 for inventory and MyTrucking for logistics. But Microsoft Power BI Pro, for example, is now US$10 per user per month (10GB limit per user).
Data visualisation is the process of turning data into pictures – like making charts in Excel. The limitation is that the data needs to be a set of numbers that has already been ordered, like a reconciled set of accounts.
If you are taking data in many different formats then you need to order it first. Business intelligence (or insight) tools take raw data, order it, then visualise it. BI tools also have more analysis options than data visualisation tools because they have access to the raw data.
Data visualisations are for the client
Why should accountants bother with data visualisation tools when the data is sitting in the accounting system in the first place?
Visualisations are more to help the client than the accountant, especially for managers who aren’t finance-report savvy, says Heather Smith CA, a management accountant and principal of ANISE Consulting. A table of numbers is harder to understand than a dashboard that tells you a red number is bad and a green number is good.
“Dashboards and visualisations are the same as your car dashboard. You set your journey and your eyes flick down at it to know that you’re on track,” Smith says. “I can quickly look at a report, see where I’m going and make adjustments as necessary, and then look back at the road the business is driving on.”
“Dashboards and visualisations are the same as your car dashboard. You set your journey and your eyes flick down at it to know that you’re on track.”
Picture: Heather Smith CA.
The best way to start the conversation is not with software but with a whiteboard, Smith recommends. Identify the triggers in the business, the information required to track those triggers, and the ‘story’ you want the numbers to tell.
Then you can set up reports for those numbers and select the appropriate visualisation that has the greatest meaning for the business owner.
Businesses may want to build their own interactive reports for a critical set of data. For example, a finance chief may want to provide a report on a web page with columns of text and images to explain the contents of graphs to investors.
Instead of coding a collection of pie, column and trend line graphs from scratch, you can buy access to software libraries containing dozens of charts. These libraries can supply graphs that respond in real time to changes in the data set.
Two of the best known are FusionCharts and Highcharts, which supply a mix of well-tested charts and maps. One new competitor, the open-source Datawrapper, was developed for data journalism and powers the interactive graphs in online news services.
Small can be beautiful
Small businesses may have smaller budgets when it comes to software, but they still have complex problems to solve. Accountants in small and medium practices are stepping up to provide high-value advisory services using business insight and data visualisation tools.
These types of tools make it much easier to create dashboards showing financial performance that are more easily readable by business managers.
Three of the most popular, browser-based, data visualisation programs for small business are Fathom, Futrli and Spotlight Reporting. All three have a broad mix of KPI metrics, graph types and publishing options, online and in print.
There is no clear winner among the three, which places small and medium practices in a bind, says Rebecca Mihalic CA, a partner at accounting firm business DEPOT. Training staff in three platforms is too expensive and time consuming; it is much smarter to pick one platform and market it to all clients. However, each client has specific needs and may request one platform above the others.
Mihalic sells a monitoring package to clients that is driven by Futrli’s alerts feature, which emails the accountant if a nominated metric (such as a specific type of expenditure) exceeds a certain limit. Mihalic uses this feature to underpin her CFO-style services, which include regularly updating clients on how their business is performing.
Picture: Rebecca Mihalic CA.
Fathom, which includes deeper analysis tools for goal setting and KPI tracking, is more useful for larger clients, Mihalic adds.
Spotlight Reporting also has its strengths. “I’m going to use Spotlight – which has a Multi module for franchise businesses – with one of my new franchise clients,” she says.
Mihalic has also been using a specialised visualisation tool called Float that forecasts cash flow. “I have micro-companies and daily cash flow is really important to them. Float is a bit better at > predicting when debtors are going to drop money in,” Mihalic says.
It’s important to train regularly on these data visualisation programs to keep up with new features that may make a difference to your clients. A good example is when a program adds a new data source other than accounting software.
Fathom, Futrli and Spotlight Reporting offer “all you can eat” partner programs, but subscribing to all three is often too expensive for a small accounting firm. Mihalic recommends on-charging the cost of the program to the client or increasing the price of the accounting fee accordingly.
In addition, if firms pass on the cost of the software transparently then they no longer need to have awkward conversations when software companies raise prices.
One tip Mihalic has for accountants thinking about using these programs is to use them on your own business first before recommending them to clients.
“Everything I use for my clients I use for myself. You can’t understand it in any other way.”
Multiple source visualisations
While the small business systems are useful to monitor the performance of any business, they have been built to visualise data from a single data source: the accounting file. And if you want to sync an accounting file automatically, you can only sync from popular small business applications such as Xero, MYOB, Reckon and Intuit QuickBooks Online.
If you want to upload accounting data from enterprise resource planning (ERP) systems such as Attaché or NetSuite, you will have to import it manually. It’s the same if you want to view financial data alongside information from other internal systems or external sources.
More powerful visualisation tools can pull data from your accounting system, customer data from a customer relationship management (CRM) system, and interest rates, exchange rates and demographic statistics from government bodies such as the Australian Bureau of Statistics or Stats NZ.
Another reason to step up to the more powerful products is that it is easier to analyse your entire client base. Most small and medium practices have a broad mix of clients from various industries. However, if a partner has developed expertise in one particular industry, benchmarking that client group can show extremely valuable information such as growth and trend analysis.
Mihalic, for example, has many clients in construction and is thinking about using the data to answer questions about the state of the industry.
“My [construction] clients are being told that changes in property values and regulations are impacting their industry. I’d love to prove or disprove if it is affecting their business on a profitability basis,” she says.
The biggest obstacle for accountants wanting to explore Power BI, Tableau, Qlik and other business intelligence tools is not creating the visualisations and graphs. While these tools are useful for visualising manually imported Excel and CSV files, they are far more valuable when connected to real-time data.
Unfortunately, extracting data from business systems and other sources is not as easy as syncing your Xero or MYOB file. Data arrives in different formats with all sorts of irrelevant information that needs to be filtered out.
Irrelevant information includes running totals, internal IDs and time codes. The data must be ‘cleaned’ or transformed into a desired format using a range of techniques and tools. The data also needs to be stored in a database in its cleaned format so it can then be interpreted into a real-time graph.
Accountants keen to explore multi-source visualisation can get a free primer in Microsoft Excel. Excel contains a good number of these data-cleaning tools, and understanding what they do and how they work is a great introduction to the higher-end business intelligence tools. Then you can transfer that knowledge to Microsoft Power BI, which has a similar interface and logic, says Tim Heng, director of SumProduct, a consultancy specialising in financial modelling and business intelligence.
Picture: Tim Heng.
Excel contains features to transform and visualise data, such as pivot tables, Goal Seek (finding answers from what-if scenarios), IF statements (cells show different values based on conditions), VLOOKUP (searching for values), and drop-down lists as cells.
An Excel add-in program, the Analysis ToolPak, provides more powerful data analysis tools for financial, statistical and engineering data analysis. The difference between Excel and Power BI is that the former is best used for single-import projects; the latter is designed for ongoing data updates
“I see that as a big advantage of Power BI, because the skills are more transferable,” Heng says.
The best data visualisations are driven by business insights
Microsoft Power BI is a relative newcomer (released 2015) compared to established products such as Tableau, which has been popular since 2003.
Tableau has a larger library of visualisations and a broader range of data sources. Tableau can also connect more easily to data warehouses. One feature in Tableau that is less developed in Power BI is displaying geographical information. An accountant can use Tableau to show sales, deliveries or field workers, group geographies into custom territories, and show data by postcodes.
“If you look at a table with a list of suburbs it’s hard to understand how they interact [compared with] a map where the bubbles blend and interact,” Heng says.
SMEtric’s Russell recently installed TV screens in the offices of a large shopfitting business so that its 100 employees could see where sales were in the pipeline, the profitability of jobs, and comparisons between actual and quoted.
But the Power BI visualisations on the TV screens – what the employees could see – were only the final step in a larger project. The critical foundation included building connections to several business systems and creating a process to format the data from those systems so that it would make sense on a screen.
It is possible to manually export data files from accounting or business systems and upload them to a data visualisation tool, but this misses the magic of real-time reporting.
Business intelligence is not just data visualisation, it’s the automation and extraction of data from core systems, Russell says. You can export and import Excel files but then data visualisation “is just Excel on steroids”.
Smith predicts that voice-activated business insight tools are going to be “the next big thing”. Apps such as Aider and Chata.ai create a Siri-like experience where a business owner can ask their phone questions about their business data.
“A lot of people coming into this area are going to leap across the graphical solutions to voice because they are so much easier to use,” Smith says. “Businesses are going to get much deeper insights to help them run their business at a much lower cost. The winner is going to be the accountant and the small business.”
Essential questions to ask about BI and data visualisation tools
If you are thinking about talking about data with your clients there are a few simple questions that will help you determine which tool is best.
How many sources do I want to visualise?
If you just want to visualise the data in an accounting file then you can start with a small business tool such as Fathom, Futrli or Spotlight. If you want to look at multiple sources of data, such as from CRMs, inventory apps and other operational systems, then you will need to look at more powerful business intelligence tools.
What are the skill levels of users within my practice?
If you just want to test the waters, start with visualising financial data first. You can practise telling stories with data to your clients so they can see the value of data analysis. When you are prepared to invest in data cleaning skills (also known as data engineering), then you will be ready to explore business intelligence tools.
Will I work with partners?
Data engineering agencies such as dataSights and PT 2.0 work with accounting firms to set up clients on business intelligence tools. These agencies will do the hard job of connecting data sources to Microsoft Power BI or Google Data Studio, and then the accountant can show dashboards to the client. This approach will give you access to more powerful tools without having to hire highly skilled staff.
Options for enterprise
Accounting firms working with bigger businesses can assist them through business intelligence and visualisation tools that connect to large-scale enterprise resource planning (ERP)systems. This is a relatively new opportunity, as previous versions of enterprise analytics tools required programming knowledge to generate reports.
Two years ago, Oracle and SAP released cloud-based analytics programs that are much easier for businesses to use.
Oracle Analytics Cloud and SAPAnalytics Cloud are designed for business managers and analysts to create their own reports from very large datasets.
This shift to ‘self-service’ in data visualisation has made it easier and faster to make critical decisions. It also opens the door to accountants working with mid-size and larger businesses who want to provide strategic advice.
These high-end tools are more powerful than Microsoft PowerBI and Tableau in that they are designed to run artificial intelligence models over very large amounts of data.
These tools have also collapsed in cost. SAP Analytics Cloud for Business Intelligence costs for US$25a user a month. Firms working with mid-size and enterprise companies running Oracle or SAP databases now have a much cheaper and easier way to find insights in the data.
What you need to know about 12 of the most popular business insight products
See the link below to download a table that outlines some of the key facts users need to know about 12 of the most popular business insight and data visualisation solutions. The options listed here are by no means exhaustive. A product’s inclusion should not be regarded as an endorsement by Chartered Accountants Australia and New Zealand or Acuity. All of the information included in this guide has been supplied by the relevant vendors. Prices may be subject to change.
CA Catalyst produces how-to guides, diagnostic tools, webcasts, exclusive events and workshops to help members embrace technology. During October and November, ANISE Consulting principal Heather Smith CA will facilitate a Data Analytics and Visualisation roadshow in five Australian capital cities. A webinar will also be available.To find out more, join the CA Catalyst community today
From CA Library
Good Charts Workbook: Tips, tools, and exercises for making better data visualizations by Scott Berinato.Download