What Is Financial Business Intelligence?

Financial business intelligence is any kind of information related to issues such as a business's value, cash flow, costs, and overall profitability. Chief Financial Officers (CFOs), financial analysts, financial managers, and accountants use this kind of business intelligence to gain a better understanding of an organization's status, potential for growth, and areas of risk. In most cases, financial business intelligence is accessed, organized, and analyzed with the help of software that enables users to generate spreadsheets, text documents, and charts. In some cases, business intelligence related to market behaviors and competitor behavior can also be accessed with financial business intelligence software.

A wide range of business professionals use financial business intelligence and therefore are often required to understand how to access and benefit from it. Managerial accountants, for example, might learn how to prepare financial documents that inform executives who need to develop business strategies. CFOs, who have usuallyally worked for many years in an industry, have first hand experience reading financial intelligence and using it to increase profitability.

A common kind of financial business intelligence deals with information on a company's status. For example, if a project manager is interested in learning how he or she might budget for a particular project, he or she might access intelligence that provides him or her costs that were required for similar projects in the past. Likewise, if a CFO is preparing for a merger or acquisition, he or she might need to access financial business intelligence that tells him or her exactly how much a business is worth. Intelligence in this scenario might include cash flow, values of tangible assets, such as equipment and real estate, as well as intangible assets, such as reputation and management processes.

Financial business intelligence sometimes is information regarding exterior factors. For instance, if an executive is considering doing business in a nation in which he or she has never done business before, he or she might hire a financial intelligence analyst. This analyst might then access information regarding a new market and provide an executive with strategies that can lead to the most growth. An analyst also might use intelligence to perform risk management, in which he or she informs an executive of potential events that can have a negative impact and ways in which he or she might lessen a negative impact.

For many professionals, financial business intelligence is inseparable from Information Technology (IT) systems. Internal data regarding a business's financial status can be organized and analyzed using financial analyst software. Business knowledge software also can provide professionals with financial intelligence regarding exterior factors. Some kinds of software, for example, provide users access to databases of newspapers, trade publications, and data regarding market and competitor behaviors.