What’s real-time data?
Real-time data is information that’s delivered immediately after it’s collected.
Imagine this. You buy an ice cream cone on a hot day. As soon as you hand over your cash and the register closes, your purchase flows through to the ice cream company’s accounting software. It’s tagged as sales revenue.
The company’s accounting specialist can click on your purchase and see all the necessary transaction details – you paid cash, you were at a certain location, and ordered a medium twist.
Your purchase instantly shows up in their revenue numbers – which keep climbing as the store employees take orders and ring up each of the customers in line behind you.
It’s happening in real-time.
What’s not real-time data?
The store’s final sales number that an employee prints from the register and calls, faxes, or emails to management at closing time. Or, the amount of cash that’s in the register at closing and reported to management.
That data is reflected as a sum in the accounting system. It doesn’t show each transaction or many details beyond the day’s profit. Transactions aren’t flowing into the accounting system seconds after they happen.
Real-time data is a strategic priority
According to Gartner, “Data and analytics are the key accelerant of an organization’s digitization and transformation efforts.” Many financial and accounting systems – and plenty of other business tools – are embracing the benefits of real-time data.
It has an immense impact on an organization’s performance. For accounting teams and management, they can see how their organization is doing at any given moment. Equipped with a high level of financial visibility, they can make informed decisions faster, which could make them more of a threat in a competitive landscape.
Maybe it’s time you take a look at how your financial data is recorded and reported. Could real-time data help you? We say yes. For the reasons above, and because you could experience these five benefits.
Benefits of real-time financial data
1. Understand business performance
Real-time data can tell you how your business is doing from a granular view and a global view. At any given moment.
Depending on your system’s level of detail and tracking, you might be able to drill into factors like location, department, project, customer, vendor, etc. You can evaluate how each of these elements is performing and how it impacts your business’ overall success.
You can get a snapshot of your entire business – its cash flow, assets, revenue, expenses, net revenue, and more.
How does it compare to last year? Your fiscal year goals? You gain a better understanding of how your business operates now.
2. Detect fraud and errors faster
Because transactions are posted immediately, you can spot mistakes and any suspicious activity sooner. You’ll know when account balances aren’t lining up. If a deposit or payment is wrong. And you can take action more quickly.
Maybe it’s pinpointing fraudulent behavior to reduce damage and refine your internal controls. With the bulk of your data flowing into your system real-time, you may be able to speed up your bank reconciliations and monthly closes.
You may see fewer data errors – like forgetting to enter purchases or transposing numbers. If errors do happen, you can spot and fix them as soon as they appear.
3. Improve the accuracy of your business predictions, forecasts, and goals
When you’ve got accurate, up-to-date data, you can use it to set business goals based on historical facts. You may start to grow more confident in the level of detail your financial system provides.
And use this data to set realistic – or aggressive – goals for the company. Facts guide your strategy.
Do you want to increase revenue? Which revenue sources are underperforming and need some support? Do you want to open a new branch? Do you want to improve the efficiency of your projects or product delivery?
You can look back on your company’s performance, take note of the trends, and set an achievable plan for growth. And, you can adjust as you go with the real-time information you see on a daily, weekly, and monthly basis.
4. Take advantage of up-to-date reporting
Every financial system’s reporting capabilities are different. But with real-time data, your financial reports will reflect your company’s current position. You don’t have to wait for a specific date to pass to pull your reports.
Or, wait on another piece of information to complete the report. Or include asterisks about the accuracy of the report. You can simplify the reporting process and save time providing information to key stakeholders.
Plus, real-time data means there’s less manual data entry. You may benefit from more accurate reports as well!
5. Make strategic business decisions
All the benefits of real-time data tie into an overarching theme that more data leads to more insights. Insights lead to a heightened ability to make decisions for the good and growth of your organization.
What’s your data telling you about your business? What changes can you make? What’s holding you back, taking too much time, or isn’t profitable? What’s going well?
When you can get this information in a couple of clicks at any time, you can change the trajectory of your business. You’re not using last year’s data to guesstimate what you should do this year.
You’re using real-time financials, built on a foundation of historical data, to make forward-thinking decisions. You can look ahead and match what you know about your business with the external environment.
It could be a powerful way to lead your organization and people into an increasingly competitive marketplace.
How can you get real-time financial data?
It comes down to the accounting software you use. Think about the system you use now.
Are you manually entering all or most of your financial transactions? Can it offer real-time data? To what extent?
Is it limited to simple transactions such as electronic bank deposits and credit card transactions? Do you still have to upload or manually enter data like sales numbers, inventory, or payroll? Can it connect to a wide range of applications you can use to automate the flow of information?
There may be a possibility it can do more. If not, there are other systems out there that have more advanced capabilities.
Sage Intacct is one such accounting software. It’s built on the value of real-time data. It’s cloud-based and has connections to a variety of systems – point-of-sale programs, CRMs, payroll, expense tracking, AP/AR, and more.
Once the systems are connected to Sage Intacct, all business transactions flow into the software to show you how your organization is performing. You can use its predefined dimensions – location, department, class, etc. – to see reports and dashboards that reflect your business best.
Plus, you’re not limited to financial data. You can pull in operational data for a complete view of your company. It’s reporting and dashboard capabilities also bring you added flexibility and more in-depth insights every time you log in.
When you’re examining your current financial system or exploring others, pay attention to each system’s real-time capabilities. How does it collect data? How much data can it pull in? How’s it displayed?
Will you need to export and import data continuously? Can you build connections to your business applications and let those programs talk to each other?
You’ll reap the most benefits of real-time data and a financial system if it’s real-time capabilities are more robust. You could save valuable time for your accounting team and empower yourself and executives to make strategic business decisions. It may be time to start exploring your accounting software options.
Have questions about Sage Intacct and the power of real-time data? Let’s talk!