When I talk to early stage Controllers that want to advance their company's analytical capabilities, 90% of the time they tell me they need to hire more accountants first. When I check back with them a year later, virtually every time they are dissatisfied with their analytical progress.
Why? Because they hired for their strength. It's tempting to hire someone for something you know how to do so that you can learn a new skill, but if you hire an accountant they will:
- Need to get familiar with your business as it relates to accounting
- Require training and resources related to accounting
- Require management and coaching related to accounting
- Ask questions related to accounting
- You get the point...
If you're an expert at accounting, then whoever you hire is going to carry a highly redundant skillset. This is fine when you can hire multiple people, but this is a bad move if you have only one open headcount - assuming the goal is to move into advanced analysis.
There's another big reason that hiring to backfill the accounting role often doesn't uplevel your analytics: FP&A is a different skillset. If you need to build a software product you would hire a developer, not an accountant so you can learn to code. Same thing applies to analytics. If you get creative in FP&A you get a promotion; get creative in Accounting and you can go to jail. It's simply a different skillset, toolset, and mindset.
Great analysis takes time, human time, no way around it - and if starting from scratch it's a full time job.
Let's brainstorm the analytical process:
Bring in data from all over the place
- Requires access, learnings, and business partnership
Clean and transform the data for analysis
- Even data scientists spend 80% of their time on this!
- We automate this with AIP (without the cost of a data scientist!) but it still takes time
Aggregate the data into a single source of analytical truth
- Necessary, but extremely time consuming and painful (which is why we automated this with AIP)
- Even data scientists spend 80% of their time cleaning data
BUILD BUILD BUILD BUILD
- Exploratory analysis takes a ton of time, often weeks of pure exploration before you can truly explain the business with numbers
- AIP's Business Intelligence makes this way faster, but someone has to build the charts to generate trends and surface hypothesis
Analyze the results
- Review results, trends, anomalies, and truly gain a DEEP understanding of the historical metrics.
- This generates more ideas and analysis, which then takes us back to the beginning as we need more data, and we repeat the process all over again!
Draw conclusions
- Think through the insights, draw conclusions, and figure out how to frame your recommendations to drive informed business decisions
ACTION it
- Requires meeting with business owners and creating action plans
- This alone takes a ton of time!
Pro tip: This step is where you need to be spending your time, try to skip to here!
Measure & monitor performance!
- If you're not using AIP, or another system, then your analysis often goes stale immediately after it's performed
- AIP facilitates a data funnel that allows you to keep both financial and non-financial analytics up to date and at your fingertips so your net-new analytical efforts are spent gaining net-new answers (instead of refreshing prior analysis with new data)
Accounting to Analytics Action Plan
If you are an accounting professional looking to expand the financial planning and analysis (FP&A) capabilities of your team, here are a few actionable steps you can take:
Build a set of "Primary KPIs" to act as the north star
Put your tasks into a basic Primary KPI spreadsheet and see how they stack up. Don't lie to yourself about this, or try to stretch tasks you want to do or are comfortable doing into a primary KPI.
Plan your work and work your plan!
Using the primary KPIs, block your calendar off with tasks focused on accomplishing your goals. Take note if you aren't working on something that drives your Primary KPIs forward.
Offshore/outsource/decline backward looking or administrative tasks
Calendar your work and document it in your KPI sheet, so that if you're going to take on something new it's SUPER clear what you are giving up. Oftentimes we are trading Primary KPI progress for near-term fire drills or comfortable tasks because it feels good to check something off our list.
Keep your analytical model up to date
If you don't do this you will spend all of your time refreshing analysis that's already been done. This is one of the most common mistakes I see in a stalled FP&A team!
Share your findings: Visualize the data and share the insights with others
It doesn't matter if it's not game changing, it's probably an insight or perspective others might appreciate. Also, it provides opportunities for feedback and brainstorming. Don't fall victim to your internal echo chamber. It's really difficult to pull yourself out of the weeds once you dive in, so this is a critical step to pulling yourself back to reality. Share your progress for feedback, even if there are no surprises.
"I built [insert cool analysis] and I didn't find anything surprising, but I wanted to share it with you anyway. Next I'm thinking of looking at [insert next analysis] because [insert hypothesis]."
This simple process will:
1) build confidence
2) surface the team's added insights to help generate new hypothesis
3) exercise your explanatory muscles while the stakes are low
Clear your calendar to spend more time generating hypotheses and meeting with the business.
Doing things gets in the way of getting things done! You need to make time to think. You will not blindly stumble your way into a goldmine without falling down a dirty data crevice first. Plan your work and work your plan.
Moral of the story: If you want to make analytical progress, hire an FP&A analyst. By following this playbook you can uplevel your FP&A analytical skills while continuing to grow and develop as an Accountant and a leader.
