Translucent has been open for business for less than a year but in that time we have already helped thousands of businesses to consolidate their accounting data. In doing so, it has become clear that many, many businesses are struggling with their accounting data.

There are two problems that are obvious. 

The first is well known; every finance team or accounting firm has some equivalent of “rubbish-in, rubbish-out” because everyone knows that accurate data is essential.

The second is a little less understood; most groups and multi-entity businesses have a data model problem.

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The finance team Data Model

For finance teams the data model typically involves:

• The Structure of the accounting data, e.g.some text
  • The Chart of Accounts
  • Other data dimensions (e.g. Departments, Locations)
• Additional Data that impacts the finances and financial KPIs, e.g.some text
  • CRM data
  • detailed payroll data
  • eCommerce data
  • inventory data
• Permissions that control the data, i.e.some text
  • Who is allowed to see what

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The multi-entity finance team Data Model

For multi-entity finance teams using SMB accounting software (like Xero or QBO) the problems are the same but multiplied as the data from multiple entities is consolidated to produce a single data set.

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Why does the Data Model matter?

The data model matters because it is always doing one of two things: it is either solving problems for you or creating problems for you. There is no middle way.

Every data model problem shows up in the books, e.g.

• If you don’t have the correct Permissions then you will have to do the work to share the required data (e.g. creating exports for those that can’t securely access the finances).
• Likewise, without the correct Permissions you may have to create multiple reports to cater to different access levels and views
• If your CRM data is not in the same system as your accounting data then you will be doing the extra work to bring it together.
• If the Charts of Accounts across entities don’t match then mapping will be required.
• If there aren’t enough data dimensions then you won’t be able to do the reporting you need.
• If your Tracking Categories, or Tracking Category Options don’t match across entities then your reporting will need fixing.
• If your Supplier or Customer names vary across entities then there is an increased likelihood of errors in the consolidated accounts.
• The more sources of data, the higher the risk of omissions and errors
• If you have to manually combine data, it takes many hours each time you need to update
• If intercompany accounts aren’t correctly identified then you can’t accurately create group reports.
• Etc.

What can I do about it?

Until today the answer to this question was - a lot of work in Excel! But today Translucent has announced the launch of a series of tools to help you:

1. Fix issues in your current data model, 
2. Improve your data
3. Check if transactions are being correctly allocated in your data model.

The first of these tools are the Tracking Category Audit and Data Dimensions. More will follow in the weeks and months to come!