“Little Big Data” Reviewed by Momizat on . Get Clients to Count on Your Accounting Is it the valuation of a small privately held company with three employees? Or a large multi-national with employees in Get Clients to Count on Your Accounting Is it the valuation of a small privately held company with three employees? Or a large multi-national with employees in Rating: 0
You Are Here: Home » Practice Management » “Little Big Data”

“Little Big Data”

Get Clients to Count on Your Accounting

Is it the valuation of a small privately held company with three employees? Or a large multi-national with employees in the thousands? Perhaps it is reviewing assets in a highly contested divorce. One way or another, you are trying to reach a decision, an opinion, or a conclusion from the data in front of you. Using big data, you must compose a story and present the data in a manner that is compelling and memorable. This article discusses the importance of embracing big data and showcasing one’s expertise.

Is it the valuation of a small privately held company with three employees or a large multi-national with employees in the thousands? Perhaps it is reviewing assets in a highly contested divorce. One way or another, you are trying to reach a decision, an opinion, or a conclusion from the data in front of you.

Today, big data is a big buzz word, and one temptation is to lose focus on the ultimate objective of what we do. We help clients, a third party, or the court to understand our findings, our perspectives, our decisions about data. While the tools we use grow faster, smarter, and cheaper, at the end of the day, people count on our expertise and communication.

The true definition of big data involves what are commonly referred to as the four Vs: volume, velocity, variety, and veracity. In the real world, we are left to use the big data in ways that may seem much less disciplined or easy to put into tidy boxes. Before we go forward, let’s pause for a moment and think about big data as a buzz word.

For data to graduate into becoming big data, all four Vs must be present—and at such a level as to “feel” big. Volume refers to the scale of data. You need a volume of data points, and in today’s landscape, we are often talking million to quintillions.

Velocity refers to having to analyze data moving in massive or many streams. Think of the flow of data through the stock market or the numbers of live working sensors in your car today—what we call, “the Internet of Things,” or IoT, like Alexa, listening and searching and reporting to us out options in real time. The data is out there, and it flows back and forth from systems and clouds—not just our desktop or one server at work.

Variety refers to having different data sets. Like those sensors in our cars, this might be the range of data points from outside temperatures and humidity as we cruise across the city, plus our tire pressure, fuel and oil levels, engine temperature, and the distance between all the vehicles surrounding us. These are data points in multiples, not just one or two.

Finally, veracity is something we can all relate to. Is the data trustworthy? Can we rely upon it to perform our analysis—and be reliable experts in service to our clients? Most everyone at some point has tried to perform a valuation only to tell their client we did not entirely trust the data that was provided. “Don’t shoot the messenger,” we might have said, and those conversations may sometimes twist and turn from there…

Given this formal definition, we may soon realize that we may not be dealing with big data in the truest sense when it comes to most of our day to day analyses and valuations. We have a lot of data, yes, and sometimes it seems like more than might be in anyone’s best interests. Often, one can run into trouble when it comes to having access to the data in real time, or in a way that it can be truly analyzed and appears to lack any variety. We may have had access to large volumes of financial data, but the variety of that data involves non-financial data that we must bring under consideration. And so, our experience is even more important, because newfangled things like artificial intelligence (AI) simply may not have the chops right now to leverage non-financial data without some human programming to teach it. AI still needs us and our creativity to make big data make sense.

Truth be told, many of the current models and analysis do not draw upon the four Vs in any classic, formalized sense. Moreover, we are not typically using non-financial data when doing this work. So, we do not need to turn away from the concept of big data. We need to start using the large amounts of data we already have access to, then make the very best use of that data—and communicate more simply and powerfully to our clients.

The Data at Hand

At some point in the future we will be working more and more frequently with big data—even when smaller clients and projects are concerned. Why? AI and machine learning are being used more and more to help solve or predict or model things for small businesses and individuals. We are seeing big data being used (and accepted) as benchmarks or toolsets for smaller and smaller clients.

Meanwhile, we need to continue to embrace the data we have access to and still dig deeper. Understand that in today’s landscape we need to shift how we get the data we use. While in the past we focused on paper statements and printed records, that limited our ability to perform deeper analysis. Pushing your client to go deeper for more data from their bank, their credit cards, whatever those sources may be, will broaden and deepen those data sets we put into Excel.

Once you have access to the data in Excel, then you can harness the power of Excel, SQL or go deeper with other business intelligence or analytics software. Now, you are yielding deeper insights into what sits below the surface. You drill into the lead and lag factors that can be seen inside the financials. If you are looking for fraudulent transactions in a divorce case, you know from experience what lead factors to look for. The lag factors are the hiding of assets, the lead factors are what the data and financial records show right before an asset gets hidden.

At the end of the day, you first need to find an asset worthy of being hidden, because no one really wants to hide debt.

Ultimately when it comes to data of any volume or velocity, it is still on us as the analysts to perform the right work with the right data to get the right results. If we can get the right results, the next step is to communicate it back to the client, judge or other concerned party in ways that are factual, balanced, and easily understood.

When it comes to reporting on what data can tell us, we need to take a step back and understand that most people do not have a rich background in finance, accounting or even business administration. What most do possess are metaphors and anecdotes. Even if we are not all avid readers, we communicate every day using the power of stories. Right now, you are reading this article, perhaps listening to a podcast or television show. Each of these mediums convey a narrative. Yes, there are facts and figures, but they occur within a framework having characters and events, and we find ourselves caring about ideas and problems far beyond the nouns, verbs, and adjectives which convey them.

In this same way, our jobs involve a financial analysis or a fraud examination where we talk or write about numbers. At some point, our skillfulness begins when we stop thinking like an accountant and start communicating like our most authentic selves. We are at our best when we have taken a step back and can tell the most accurate but understandable story of the numbers, results, and perspectives concerning the data we found.

Just because you are telling a story and not focusing on the numbers does not make you unprofessional, compromise your ethics or degrade your value. If no one understands your findings and the truths behind the numbers, no matter how right or brilliant you may be, you are doing the client a disservice. Your client must understand what you are saying. Instead of thinking like an accountant in the strictest sense, shift your focus to thinking about the story from the listener’s chair. Imagine what they can absorb in plain English to grasp the main conclusion, the key factors that led you to this conclusion and so on. You understand the situation, so how can you convey this in its clearest terms and most relevant facts and figures to help them understand your journey?

Trusted Advisor to the “Everyman”

For example, instead of talking to a client about their valuation report in terms of multiples and EBITA, what if you tried this approach:

“The will to win means nothing without the will to prepare. This isn’t just a famous quotation; it also sheds light on why your recent valuation is triple what it was three years ago. Ever since you shifted the focus of the company to better serving your top customers, things have continued to move on an upward track. Your focus on preparing the company for long term success has paid off and the increased valuation is the result or your win.”

You will be amazed at how quickly people understand your analysis and see greater value in your perspective.

At the end of the day, big data, small data—data of any size is just another chance for us to help demonstrate our value as trusted advisors. As you look to be seen by your clients in the right light, shift your focus. Embrace data in all its stripes—and the new technologies that help us make more of it. Then, explore how to clearly communicate what data is telling us in the most relevant ways to those around you. When you do, your words will resonate, show more value, and you will find success as the expert at hand.


Garrett Wagner, CPA, CITP, CEO and Founder of C3 Evolution Group, is an industry thought leader and on a mission to fuel the entrepreneurial spirit and passion within the industry. With his ability to break free from the traditional CPA box, he has embraced the entrepreneurial mindset and is on a mission to help others embrace the entrepreneurial skills and knowledge needed to evolve into entrepreneurial CPAs. Mr. Wagner focuses on monitoring the evolving technologies and best practices in the industry to achieve the highest degree of success without being afraid to break free from traditional methods. His background includes working inside successful CPA firms, speaking at conferences and events, and consulting for CPA firms across the country helping them to ignite lasting change by understanding the unique needs of each firm’s organization.

Mr. Wagner can be contacted at (585) 385-1790 or by e-mail to garrettwagner@c3evolutiongroup.com.

The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

Number of Entries : 2131

©2020 NACVA and the Consultants' Training Institute • (800) 677-2009 • 5217 South State Street, Suite 400 Salt Lake City, UT USA 84107

event themes - theme rewards

Scroll to top
UA-49898941-1
lw