Financial analytics

Άρθρο
05/03/2024

Businesses capture a tremendous amount of data during daily activities that's supports valuable business intelligence (BI) for decision makers:

Sales figures
Purchases
Operational expenses
Employee salaries
Budgets

Business Central contains many features to help you gather, analyze, and share your organization's finance data:

Financial reporting (for financial statements and KPIs)
Ad-hoc analysis on lists
Ad-hoc analysis of data in Excel (using open in Excel)
Built-in finance reports

Each of these features has its own advantages and disadvantages, depending on the type of data analysis and the role of the user. To learn more, go to Analytics, business intelligence, and reporting overview.

This article introduces you can use these analytical features to provide financial insights.

Analytics needs in finance

When thinking of analytics needs in finance, it might help to use a mental model based on personas described on a high-level and their different analytics needs.

People in different roles have different needs when it comes to data, and they use the data in different ways. For example, people in finance interact with data differently than people in sales.

Role	Data aggregation	Typical ways to consume data
CFO / CEO	Performance data	KPIs Dashboards Financial reports
Finance Management	Trends, summaries	Built-in managerial reports Ad-hoc analysis
Bookkeeper	Detailed data	Built-in operational reports On-screen task data

Finance KPIs

A key performance indicator (KPI) is a measurable value that shows how effectively you’re meeting your goals. In finance, people often use the following KPIs to monitor their organization's financial health:

Gross Profit Margin
Net Profit Margin
Working Capital
Current/Quick Ratio
Financial leverage, also known as the Equity Multiplier
Debt-to-Equity Ratio
Total Asset Turnover
Return on Equity
Return on Assets

Using financial reporting to produce financial statements and KPIs

The Financial Reports feature gives you insights into the financial data shown on your chart of accounts (COA). You can set up financial reports to analyze figures in general ledger (G/L) accounts, and compare general ledger entries with budget entries. The results display in charts and reports on your home page, such as the Cash Flow chart, and the Income Statement and Balance Sheet reports.

Dimensions play an important role in business intelligence. A dimension is data that you can add to an entry as a parameter. Dimensions let you group entries that have similar characteristics so they're easier to analyze. For example, customers, regions, products, and salespersons. Among other purposes, use dimensions when you define analysis views and create financial reports. Learn more at Work with Dimensions.

Tip

As a quick way to analyze transactional data, you can filter totals in the chart of accounts and all entries in Entries pages by dimensions. Look for the Set Dimension Filter action.

The following table describes a sequence of tasks in financial reporting, with links to the articles that describe them.

To	See
Create new financial reports to define financial statements for reporting or to display as charts.	Prepare Financial Reports with Financial Data and Account Categories
Use statistical accounts to supplement information in financial reports. Statistical accounts let you add metrics that are based on nontransactional data. You can add the nontransactional data as number-based units, such as employee headcount, square footage, or number of customers with overdue accounts.	Analyze data with statistical accounts
Learn how to set up a new financial report through examples.	Walkthrough: Use financial reporting to make a cash flow forecasts
Analyze your financial performance by setting up key performance indicators (KPIs) based on financial reports, which you then publish as web services. The published financial reports KPIs can be viewed on a web site or imported to Microsoft Excel using OData web services.	Set Up and Publish KPI Web Services Based on Financial Reports
Set up views to analyze data using dimensions.	Analyze Data by Dimensions
Create new analysis reports for sales, purchases, and inventory, and set up analysis templates.	Create Analysis Reports

Finance reporting across business units or legal entities

Some organizations use Business Central in multiple business units or legal entities. Others use Business Central in subsidiaries that must report into parent organizations. Business Central gives accountants tools that help them transfer general ledger entries from two or more companies (subsidiaries) into a consolidated company.

To learn more, go to Company consolidation.

Ad-hoc analysis of finance data

Sometimes, you just need to check whether the numbers add up correctly, or quickly confirm a figure. The following features are great for ad-hoc analyses:

Data analysis on ledger list pages
Open in Excel

The Data analysis feature lets you open almost a list page, such as General Ledger Entries, Fixed Asset Ledger Entries, Check Ledger Entries, or Bank Account Ledger Entries, enter analysis mode, and then group, filter, and pivot data as you see fit.

Similarly, you can use the Open in Excel action to open a list page for ledger entries, optionally filter the list to a subset of the data, and then use Excel to work with the data. For example, by using features such as Analyze Data, What-If Analysis, or Forecast Sheet.

Tip

If you configure OneDrive for system features, the Excel workbook opens in your browser by using Excel for the web.

For more information on how to do ad-hoc analysis on ledgers, see Ad hoc analysis on finance data.

Built-in reports for finance

Business Central includes several built-in reports, tracing functions, and tools to help auditors or controllers who are responsible for reporting to the finance department.

To get an overview of available reports, you can choose All reports on the top pane of your home page. This action opens the Role Explorer, which is filtered to the features in the Report & Analysis option. To learn more, go to Finding Reports with the Role Explorer.

Built-in reports come in two flavors:

Designed for print (pdf).
Designed for analysis in Excel.

For more information, see these overviews for reports that are relevant for finance.

On-screen finance task pages

Business Central has several pages that give you financial overviews and tasks to do.

Show general ledger entries and balances from the Chart of Accounts page

The Chart of Accounts page shows all general ledger accounts with aggregated numbers posted to the general ledger. From this page, you can do things like:

View reports that show general ledger entries and balances.
Review a list of posting groups for that account.
View separate debit and credit balances for a single account.

To learn more, go to Understand the Chart of Accounts.

View actual amounts compared to budgeted amounts for all accounts and for several periods

As a part of gathering, analyzing, and sharing your company data, you might want to view actual amounts compared to budgeted amounts for all accounts and for several periods. You can make this comparison from the Chart of Accounts page, by choosing the G/L Balance/Budget action.

To learn more, go to Analyze Actual Amounts Versus Budgeted Amounts.

Analyze data by dimensions

Dimensions are values that categorize entries so you can track and analyze them on documents, such as sales orders. Dimensions can, for example, indicate the project or department an entry came from.

So, instead of setting up separate general ledger accounts for each department and project, you can use dimensions as a basis for analysis and avoid having to create a complicated chart of accounts structure.

In financial analysis, a dimension is data you add to a G/L entry as a kind of marker. This data is used to group G/L entries with similar characteristics, such as customers, regions, products, and salesperson, and easily retrieve these groups for analysis. You can use dimensions on entries in journals, documents, and budgets. For more information, see Analyze Data by Dimensions

Analyzing cash flow

On the Accountant home page, under Finance Performance, the Cash Cycle, Cash Flow, and Income & Expense charts offer ways to analyze cash flow:

Review figures for a period by using the timeline slider.
Filter the chart by choosing the source in the legend.
Change the length of the period, or go to the previous or next period, by choosing options on the Finance Performance drop down.