Today’s ever-changing technology forces individuals, particularly CPAs, to constantly adapt to keep pace. One advancement that has helped this evolution is data analytics, which is the science of analyzing raw data in order to make conclusions. Data analytics helps to automate, decipher, and break down raw data into digestible information that the average person could interpret.
Here are some of the many benefits of using data analytics in your business or practice:
- Cost reduction. Utilizing data analytics to sort through a significant amount of raw data builds efficiencies and thereby reduces time spent manually processing such data. Creating a streamlined process for inputs and outputs helps to better understand (i) the information you are looking at and (ii) your customers or clients.
- Faster and better decision making. With data analytics comes speed –quicker outputs for companies to analyze, which leads to quicker decision making based upon those outputs. As technology is constantly evolving, companies need to stay ahead of their competitors in order to thrive in a competitive marketplace.
- New product or service development. With the ability to observe and interpret outputs in a timely manner, companies are better able to understand the needs of their customers. As a result, companies will have more time to create new products or services or enhance their existing products or services to better suit their current customers or to attract new customers.
Another example of how data analytics can help is in using artificial intelligence. MindBridge AI, a sponsor at the NJCPA 2019 Annual Convention & Expo this past June, presented a robust AI-powered auditing software that, among other things, assists auditors in making more precise sample selections. I found the MindBridge AI auditing software to be extremely educational and useful as it reduces the randomness of sample selection and associates transactions with a perceived risk value to better identify high-risk transactions and samples. Utilizing this software helps to ensure that independent auditors have made an accurate assessment and sampled each account balance. Such software also gives independent auditors the comfort that their auditing techniques are appropriate.
Advancements in data analytics will keep coming so staying on top of these changes will help you gain a business advantage.