If you work in accounting and tax, then you know your data sources run the gamut — ERPs, general ledgers tools, budget and forecasting tools, CRMs, HRIS, banking systems, and on the list goes.
There could be hundreds of data sources housing your financial data, stifling a cohesive view of your data, let alone allowing you to analyze it.
So, what are accounting and tax teams doing to solve this problem?
They’re optimizing their data stacks, building a single source of truth — a repository for all their financial data that tells them where their organization stands financially and can help them answer key questions.
In this blog, we examine the top four reasons accounting and tax teams are focused on optimizing their data stack with insights from two leading finance pros: Travis Haworth, Digital Transformation Advisor at Capitalize Analytics, and Alula Zeryihun, Manager at Capitalize Analytics.
Reason #1: The quest for a single source of truth
Data is everywhere, but many businesses still rely on gut decisions. Why? Because data that cannot be seen cannot be used.
The legacy approach to wrangling financial data typically involves lengthy processes and expensive personnel. For example, you may need to hire a Python developer who can run complex analyses — only after being taught the ins and outs of the business — said Haworth.
This approach isn’t scalable or practical.
With a modern data stack, all this data is aggregated and reconciled. It becomes easier than ever to use and access and helps the business answer questions faster.
After all, success isn’t just about making the right move; it’s about making many right moves in rapid succession, and organizations can’t do that without available access to data.
“If you have quality data, then you have something that could be used for automated processes or just being able to be consumed a lot easier with fewer friction points down the road,” said
Zeryihun. “That’s really where the efficiency comes in — minimizing friction and allowing the data to flow properly.”
Reason #2: Leadership relies on data
Business leaders have incredible instincts — most of the time. They usually have a gut feeling about where to lead the business and want to back that decision up with data.
That’s great, but only once the business has readily available access to data can they analyze it to answer specific questions, like, “What makes a good customer?”
Haworth said that while this question may seem simple on the surface, answering it involves scrutinizing multiple layers. Most companies would start by looking at customer revenue in their CRM, but revenue doesn’t show profitability. In other words, gross revenue is not the same as net revenue.
Haworth said that after you factor in things like sales commissions, customer support, administrative expenses, and so on, you may discover some surprising facts — like the customer you thought was your most profitable is costing you more than you’re making. Having readily available data insights helps you understand the full picture and pivot where necessary.
Reason #3: Bridging the talent shortage
In the finance world, good talent has all but dried up. Part of the problem is the high barriers to entry. Many of the big firms now require candidates to have an MBA just to get a foot in the door.
Limited talent working incredibly long hours — especially around quarter close — leads to burning the fuse at both ends, said Haworth. “Bad data compounds gaps in people and processes.”
Automation can bridge the talent shortage by helping workers do more with less. If organizations want to succeed, they must equip their employees with the right technology and processes.
Reason #4 Creating better processes
“Innovation starts in tax” was a common saying Zeryihun heard when he worked in public accounting.
Zeryihuna said, “From the perspective of a public accounting firm, a lot of the innovation was taking place in tax because we were building solutions that were automating thousands of hours’ worth of manual work.”
Modern data stacks are vital to accounting and finance teams because of the value automation creates. What value exactly?
First, instead of working 70 hours at quarter close, accountants can use automation to work 50 hours or less. Second, during slower times, organizations may not need to hire as many people thanks to automated processes.
Finally, Haworth said, the most exciting result of automation is the ability for these professionals to step into finance transformation roles. “They’ll go find different things in different roles. It could be ops analytics; it could be supply chain. There’s always more work to be done, and it’s the cliche that if you’re not doing grunt work, you save time to do more value-added work and more analytics. It’s cliche, but it’s true.”
Zeryihun added, “As people develop these skills, in addition to their technical domain expertise, this actually positions them to be highly valuable targets for others. It just opens a lot of doors. It’s mutually beneficial.” Not only do better processes help the business, but they also empower employees.
The modern data stack for finance and accounting teams
So, what does the modern data stack look like? Here’s a quick breakdown of that ecosystem:
First, you have your data sources, which are aggregated in a data storage system. Then, you need a solution to analyze that data and report any findings to stakeholders.
For many companies, this looks like a SALT stack, which stands for Snowflake, Alteryx, and Tableau.
Snowflake is a great option for a cloud data warehouse, housing all the data from your myriad of sources. Alteryx, a low-code and no-code analytics platform, can ingest data from anywhere—your cloud data warehouse, lakes, and even individual data sources. Once you have your data in Alteryx, the sky’s the limit. You can perform quick data cleansing and blending processes for incremental efficiency gains while automating many of your tax and audit analytic workflows. Plus, governance and documentation are built-in.
Finally, you can export your data from Alteryx into your BI tool of choice — for this step, many organizations use Tableau, but you can also use reporting tools directly in Alteryx, like Auto Insights, which lets you generate emails and PowerPoints in seconds.
Ready to optimize your data stack?
Tax and accounting professionals are done wrestling 40-tab Excel workbooks and waiting thirty minutes to access reports. With a modern data stack, they have all their financial data at their fingertips. They can work fewer hours while accomplishing more, leveling up in their careers along the way.