Data insight: Xavier Analytics unleashes Resilience checks
Recently crowned Emerging App Partner of the Year, Xavier Analytics has released insights tool Resilience, providing business performance checks to test areas of client strength and risk.
After winning Emerging App Partner of the Year at the Xero Awards 2020, accounting data toolkit Xavier Analytics released the first version of business insight tool Resilience, assisting accountants to support client advisory decisions.
Xavier’s first set of Resilience metrics, business performance checks with specialised KPIs, provides snapshots and granular data on business efficiency for a specific period. Each of the checks summarises the key figures and expand to show a detailed breakdown of the data.
Co-founder Helen Lloyd told AccountingWEB, “Xavier's new Resilience checks are dedicated to ensuring that accountants have all the insights they need to understand where their client’s strengths lie, or where they might be at risk.”
The business performance checks component was created to highlight key risks and trends for each client’s business, and “identify them early so they can be mitigated before it is too late,” added Lloyd.
Resilience: Business performance checks
Business performance checks are represented as digital cards and use transactional level data from Xero in Xavier’s analytical engine to highlight insights and alerts from sales and supplier activity.
Current business performance checks include:
- Revenue movement: Keeps track of revenue over time and compares performance with the previous period. Expanding the card provides a historical graph of revenue and a box which can calculate and visualise the impact of growth on future revenue in the graph.
- Net assets: Tracks the organisation's total net assets value over time and the percentage change for each period. Expanding the card provides a historical graph of net assets.
- Customer reliance: Xavier detects the top customer by the percentage of total revenue during the period. A high percentage of revenue causing a high reliance on a single customer is a considerable risk to the business. The check accompanies Xavier’s sales analysis insight which reviews client revenue for a set period, breaking down into the key customers and the amount of revenue created by each of them.
- Supplier reliance: Shows top suppliers by spend for the company as a percentage of total costs during the period. Customers can then plan to diversify high-reliance suppliers to avoid a business continuation risk. Supplier reliance accompanies the cost analysis module – an AI-assisted tool designed to analyse client payments against suppliers over time and automatically detect issues. Cost analysis uses AI to outline months where the total amount paid is higher or lower than normal for a supplier.
According to Lloyd, small businesses need a strong understanding of revenue, costs and customer/supplier pipelines for effective future planning.
Reliance on any customer or supplier is high risk for business continuity. “Businesses need to know where they need to diversify, or what relationships will need to be maintained,” she added.
Small business needs
“Particularly now, it’s so important for accounting professionals to have that deeper relationship with their clients, being available and communicative, and proactively offering advice,” said Lloyd.
“We see a lot of accountants doing their best to provide useful, accurate advisory but without the right tools, it takes a huge amount of time, effort and statistical knowledge to get this kind of insight.” Xavier’s automation of these insights, using accurate, up-to-date data with a traffic light system points out areas of risk at a glance.
“Resilience will provide a simple, clear, hard-hitting and client-friendly way of starting discussions with clients about their business performance,” said Lloyd.
The module is included within the standard Xavier subscription.
Pandemic impact on analytics
During an unprecedented crisis, with no past experience to draw from, everyone has been turning to data modelling to try and comprehend the impact for businesses, both in the short and longer term, said Lloyd.
"Currently, we’re seeing a lot of analytics focusing on financial health in order to help small businesses get out of, or survive a tricky situation,” she added. “Cashflow, forecasting, and resilience tests are a big part of that.”
Future of analytics
Lloyd also predicted that habits surrounding analytics will improve as confidence and familiarity surrounding advisory tools increases, maintaining a focus on financial health.
As the analytic industry becomes more connected, “we predict that collecting, combining and harnessing data from all the different data sources is going to create some really cool new insights,” said Lloyd. “Through the use of pure digital tools, we expect to see a lot more data analytics presenting insights in real-time as well.”
Xavier’s co-founder also emphasised the importance of accuracy in making analytics beneficial, particularly regarding modelling where small inaccuracies can become significantly amplified.
Xavier is currently working on the second part of Resilience, which will focus on cash management issues.
The second part of the insights module will provide relevant information as a dashboard and is expected to surface before the end of 2020.