“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Mark Twain
Financial data literacy is the next evolution of the accounting practice! This article will discuss data literacy as a total concept with a focus on financial data literacy.
For many years’ advisors (bookkeepers, accountants, CPA’s) have been delivering processing, compliance, tax, accounting and reporting services to their customers creating financial literacy within SME’s, across the globe. The status quo for an SME is to pay for processing, reports and add-hoc advisory services. The question to every advisor and SME owner is whether this is enough?
We agree and if you are not, you should be!
Data is the new oil and the new era of business is based on taking advantage of your data. Your data contains insights that you can’t discover through a report that has been pre-configured on someone’s standards and based on historical data but may provide some trends and history-based forecast…. “Congratulations you’ve increased your sales from the previous period and your forecast looks good but WHY?” Businesses have a lot of moving parts and your financial data is able to keep you up to date with all those moving parts!
MIT defines data literacy as the ability to read, work with, analyse and argue with your data so let’s break this up:
Our accounting partners inform us that 10-15% of companies have both the management culture and maturity to utilize analytics. We agree with this estimate as statistics about data literacy is as follows:
Change……. The low data literacy and financial data literacy creates a massive opportunity for companies and our advisory partners internationally. We believe that change is necessary within the advisory (internal and outsourced) space. Advisors need to understand that value-based services is the future of the business and enabling your customer’s success, is the basis for your own success.
Most advisors are well geared to provide a data literacy based advisory service to their customers as they already have the financial literacy capability meaning they would understand the various rules and calculations applied to the data and how to interpret the results. If you are not working with an advisor or have your own CPA looking after your finances, the same would apply.
Gain executive support and drive
Become data literate
Communicating: Start proper engagement and communication practices based on life data not snapshots
Develop a financial data literacy training plan
Moving from pure reporting systems to analytical systems
If you are a company looking to become more financial data literate please get in contact with us via support or email: firstname.lastname@example.org, or if you are an advisor practice please Partner Up so we can start you on your data literacy journey to insights today!
The research was conducted by Censuswide on behalf of Qlik. The research surveyed 7,377 business decision-makers (junior managers and above). Respondents were from across Europe, Asia and the US. Research was carried out between August 2017 – February 2018. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles.
We will be posting an article on cashflow analysis so stay tuned!
We are working on a couple of things as usual, so there will be some new goodies and some improved goodies to be released the week after next.
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