In my last post, I wrote about the key to improving productivity and accuracy of data by integrating your accounting system with other airport systems by using a multidimensional accounting system like Microsoft Dynamics NAV 2017. This post will discuss how to improve your financial reports by incorporating key statistical data or non-financial data that can be combined with financial data to create key performance metrics (KPM’s).
The Big Picture
In my posts, I describe how any airport, large or small, can improve their financial management processes by following 5 easy steps. Please refer to the white paper entitled “Modern Airport, Modern Tools” for a summary of these 5 steps. Technology has improved dramatically over the last 5 years with the advent of cloud computing and improvements in enabling technologies such as Microsoft Dynamics 365 Financials, Microsoft Power BI, Microsoft Cortana Intelligence and Microsoft Office 365. The integration between these technologies has created new opportunities for accounting departments to become more productive while providing them with access to information that was not available until recently. 2015 was a turning point in the adoption of cloud computing, with approximately 50% of companies implementing new accounting systems choosing to do so in the cloud rather than on-premises. Cloud computing has become mainstream, and I encourage all accounting and financial managers to check out the new products and technologies which I am describing in this blog series.
Ability to Store Metrics
Metrics are defined broadly as operational, non-financial data. Examples of airport metrics include:
- Total passengers (PAX)
- Total aircraft movements (ACM)
- Cargo aircraft movements
Metrics could be entered manually into a file or database, but this process is time-consuming and prone to key punch errors. A better way to do this is to import this data from the system that generated it, for example, an aeronautical billing system. Refer to my previous blog on system integration for more on this topic.
Key Performance Metrics (KPM’s)
Once the metrics have been captured they can be combined with financial data to produce Key Performance Metrics (KPMs) or Key Performance Indicators (KPIs). (Note: Some companies refer to KPMs while others call them KPIs. As the upshot is the same, in this article we will call them KPMs.) KPMs can provide meaningful and relevant data that can be analyzed using modern data visualization software. Tools like Microsoft Power BI produce information that can identify trends that might not otherwise be obvious — or even observable. Stunning graphics can be incorporated into a dashboard to provide you with powerful data visualizations. These dashboards can be integrated into your accounting system or can be published on the Microsoft cloud so they can be viewed from smartphones and tablets – all you need is a browser to be able to access these dashboards and reports. This may sound difficult or expensive to implement, but this technology already exists in Microsoft Power BI and is readily available and can be implemented quickly at a low cost.
With all this data being compiled and analyzed, the data visualization reporting interface is the “final mile.” It’s how that data becomes meaningful. If your current accounting system does not provide this kind of core capability, you need to look at upgrading your system.
Once you have analyzed the KPM’s it is time to do something with this information. Of course, these trends may be positive or negative, but regardless they need to be identified so that further action can be taken to continue/improve/re-steer the trend. The ability to identify trends in your underlying data allows the “modern airport” to make decisions to improve negative trends or reinforce positive trends – decisions that cannot be made without this critical information.
The benefits of improving reporting capabilities by capturing key statistical data that can be combined with financial data to create key performance metrics (KPM’s) is vital for all airports. State-of-the-art systems like Microsoft Dynamics NAV or Microsoft Dynamics 365 Financials have these tools built right into the standard package for analyzing trends in the underlying data using data visualization tools like Microsoft Power BI and Cortana Intelligence. If you would like to learn more about Microsoft Dynamics NAV or Microsoft Dynamics 365 Financials, feel free to contact me at firstname.lastname@example.org.
Paul Fernandez B.Sc., ACMA, CMA
SBS Group Pacific Canada
Paul Fernandez is the general manager of SBS Pacific Canada, which is part of the SBS Group. He has worked as a professional accountant in industry for 25 years in various senior financial positions. He founded his consulting practise 15 years ago and has worked as a consultant implementing accounting systems at many companies, drawing on his own experience to advise clients on the design of their chart of accounts and multi-dimensional reporting structures. Contact Paul at email@example.com.