Accounting versus finance, and the role of business intelligence
Accounting versus finance, and the role of business intelligence
Two crucial functions – accounting and finance – play different but interwoven roles in a business. Together they form the basis for decision making and for reporting. In this article we look at the key role business intelligence plays and where it is create of value across both.
Accounting: looking back
Accounting is a matter of laying out the pieces that map the financial past and present. Business intelligence plays a crucial part in reporting financial transactions, with automatically generated reports such as the profit and loss, the balance sheet, and for example an intercompany matrix that maps outstanding balances between group companies efficiently.
Business intelligence saves the accounting function considerable effort, because processes that used to require manual checking are now automated into reporting. That reduces the chance of human error and raises efficiency. It can also have a direct financial effect, by surfacing unpaid invoices that would otherwise be missed.
Finance: looking ahead
Finance uses financial data to forecast future scenarios, limit risk, and take the strategic decisions that set the direction of the business.
Business intelligence plays a key role in simplifying financial analysis, with an essential contribution from accounting: accurate historical data is indispensable to planning ahead. For finance it is crucial to integrate information from a range of internal and external sources in order to analyse and forecast accurately. Business intelligence consolidates and analyses that data, which produces effective reporting, and that reporting simplifies and improves the way decisions get made. Think of liquidity forecasts, budget versus actuals, and return analysis.
“Now that we have precise visibility of stock and liquidity, we can anticipate much better”
Marnix Benink, GWI Auto
The interplay between accounting and finance, strengthened by business intelligence, is what we call: financial business intelligence. Our aim is for business intelligence to play an integral role in both, so that the core processes are supported as efficiently and effectively as possible.
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