The Everlasting Relationship Between Big Data & Financial Reporting
- Did you know Google gets more than 3.5 billion searches every day?
- To download all the data from the internet today, a person would take approximately 181 million years.
That is a massive amount of data, right? Or should we say big data! You might have heard big data across various industries as it has become quite a buzzword in recent years. However, the question at large is, what is big data? Big data is enormous, complex data collected from multiple sources that are difficult to analyze using traditional software and tools. But thanks to technology, companies can now record, document, and analyze such massive amounts of data.
Technologies like data analytics and AI help South African businesses gain valuable insights into this big data and use these insights for better decision-making and future planning. Big data has already proved beneficial for various industries like manufacturing and retail in the past. But now, it has settled its roots in the financial sector too.
Let’s understand how companies can report and benefit from big data.
The Role of Big Data in Financial Reporting
The emergence of big data and technology development will likely change the financial reporting process. Although the nature of financial reporting is the same, the traditional methods of recording, collecting, and analyzing information have changed.
Traditional reporting techniques like spreadsheets and paper-based reporting can make it nearly impossible to identify trend patterns in the data. However, with modern analysis tools, businesses can now establish correlations between otherwise disconnected data and gain valuable insights into their financials for more accurate decision-making.
Importance of Big Data in Financial Reporting
Companies in South Africa face several financial reporting challenges due to the changes in reporting guidelines by CIPC. Then, there is also the risk of making mistakes while reporting the collected data. Moreover, the rapidly changing technology poses a threat to financial reporting. Big data or analysis can help companies in the following ways:-
- Assessing Risks at an Early Stage
Big data and analytics can help businesses increase the accuracy and quality of their financial reports. As a result, this allows professionals to identify risks earlier and resolve them before, reducing the cost of errors and omissions.
- Offering Real-Time Reporting Opportunities
The amalgamation of big data and advanced technology helps provide real-time insights to the company’s stakeholders. Not only on a monthly, quarterly, or annual basis, big data allows companies to analyse financial data whenever required.
- Allowing Data-Driven Audits
Earlier, auditing was merely analyzing the income statement and balance sheet. Moreover, an auditor had to manually scan enormous files to identify risks. However, today, with the advent of data analysis, auditors can quickly assess the massive amount of unstructured data using technology.
Make Your Way Towards the Best Reporting Solution
The world is witnessing too many technological changes. Therefore, the reporting professionals must stay abreast of the associated changes, complexities, risks, and costs of acquiring them. Companies need to bring in skilled professionals or train in-house experts to help them benefit from the big data opportunities.
The iXBRL services offered by DataTracks can help you convert your financial reports meticulously into the iXBRL format for submission to CIPC. DataTracks has successfully delivered 200,000 reports for more than 19,900 clients globally, making them one of the most trusted iXBRL service providers.
Get in touch with an XBRL expert @ +27-10-446-9061 or email at firstname.lastname@example.org. and ensure having the best tool for your financial reporting needs.