Data driven processes are redefining what’s possible in a growing variety of accounting and business contexts in the UK and around the world.
Increasingly, effective and innovative use of data and the associated technologies is becoming a competitive differentiator for companies of all sizes.
Here we’ll look specifically at how real-time financial data can help support businesses across all industries in their efforts to pursue growth, prepare for the future, protect their interests and manage their finances more efficiently.
1. Understanding credit profiles
Credit and a company’s ability to access it on short notice can be absolutely essential to success and sustainability. Plus, credit reports are now very easily accessible to anyone inclined to take a look and they often say a lot about what a company is all about and how well managed or otherwise it has been.
Having instant access to real-time financial data makes it possible for directors and their accounting teams to know precisely where their company stands in terms of its credit position, which in turn makes it easier for improvements to be made in this crucial context.
2. Checking out potential partners
Having a supplier or contractor failing or defaulting on their commitments can be a major headache and a cause for real financial concern for any company. Real-time access to financial data on potential business partners makes due diligence processes much easier and enables users to spot red flags in advance of making any important commitments.
3. Warnings of credit concerns
Just as access to financial data can inform decisions about which companies might be good to work with and which ought to be avoided, so it can help provide warnings when existing operating partners are struggling. So a company can be forewarned of any financial or credit-related problems being faced by a business partner and appropriate action can promptly be taken to protect relevant interests.
4. Picking out priority targets
For many businesses, deciding which companies to target as potential partners or clients can be a difficult and painstaking process. Access to crucial financial data in real time can inform and guide these efforts and make it much easier for priority targets to be identified.
5. Planning cash flow contingencies
Cash flow turbulence can hit companies in any sector and of any size and it’s important to have contingency plans in place to ensure testing periods can be ridden out and financial challenges overcome. Real-time access to financial data affords companies a minute-to-minute sense of what their financing options are and how their cash flow problems might best be managed.
No doubt more ways of using financial data to good effect will emerge in months and years to come but the field is already changing the way that businesses carry out due diligence and ready themselves for the future. It’s a brave new world and we at Red Flag Alert are very proud to be a part of it.