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Tax & AccountingDecember 14, 2020

How Are You Using the Data You Already Have?

In turbulent times, data-driven decision-making becomes increasingly important, both within the firm and externally with clients. Clients are increasingly asking firms to provide guidance and projections driven by data, even if they don't use those words. They may ask the firm to advise where they can find this data themselves or for the firm to recommend technologies and tools can they can use to facilitate daily decision-making.But before your firm starts advising clients, make sure that it has implemented and is utilizing the same type of analytics-driven decision-making it's suggesting to clients. After all, if your firm isn't using data to make decisions internally, can you adequately support clients as they look to find data-driven insights into their business?

For those firms concerned about where to find the data or who are just beginning to consider implementing analytics internally, the good news is that you're probably already collecting the data you need. Your existing workflow, calendar, and resource allocation software usually has the data you'll need to make decisions to guide the firm's future.

You're no doubt used to a workflow solution providing real-time views into work-in-process and a more efficient way to track engagement tasks for every client and staff member. But the same data that drives increased visibility, accountability, flexibility, and control within the firm can also help generate real-time benchmarking data. It can provide transparency into current and previous year's engagement performance and highlight areas to increase profitability.

With existing data from your workflow platform, the firm can:

  • Determine ROI. With the additional visibility a workflow solution can provide into resource cost and utilization, return on investment (ROI) calculations are easier to perform and more accurate.
  • Identify opportunities to scale the firm. With a robust workflow platform and an analytics tool, you can identify gaps in performance, process improvements, and opportunities to scale and grow your business.
  • Pinpoint ways to increase productivity and employee effectiveness. Workflow data can be combined with other performance measures and financial results to help increase overall productivity, optimize efficiencies, and elevate overall employee effectiveness.
  • Discover potential issues. Using real-time structured data helps identify short-term and long-term issues with your team, processes, and clients.

With the data provided by your workflow system, combined with an analytics tool like XCManalytics as a Service®, your firm can measure business development processes. You will be able to see if the firm is targeting the right clients, offering the services those clients want to buy, and rewarding the right staff for their productivity. You will also be able to use client data to provide guidance such as estimated tax liability, possibly changes the client can make to increase profitability or ROI, or how to pivot their business to take advantage of changing market conditions.

When workflow is integrated with metrics and analytics, the firm obtains visibility into what needs to be done, what has been done, who is doing what, and what needs to be reallocated. Workflow + data analytics helps leaders proactively eliminate bottlenecks to complete work that drives revenue and prevents any delays that impact cash flow and/or client relationships. And predictive data analytics help track the key performance indicators (KPIs) for optimally managing a firm in the modern environment.

So, before your firm starts discussing with clients how they can use data to drive decision-making based on changing business conditions, make sure that you can speak from a position of authority. Implement the same data-based decision-making that you're recommending to clients in your firm, and look to your workflow solution to provide the data you need for data-driven insights.

Mark McAndrew
Mark McAndrew, Author at Tax & Accounting

As the Director of Project Management for Firm Management (FM) at Wolters Kluwer, Mark focuses on the vision and strategy of all FM products and delivering customer and shareholder outcomes within the FM solutions set. Mark has extensive experience within both the Fortune 1000 and large public accounting firm spaces. He is a frequent speaker on business process management and workflow advisory consulting, tax and accounting outsourcing, and productivity enablement software deployments.