Static Data – unsexy, but imperative to workflows
| 23-04-2018 | treasuryXL |
We live in the world of Big Data – we are told that there is so much potential that can be unleashed by embracing Big Data. This can lead to business efficiency, increased revenue, reduced expenditure, earlier identification of fraud etc. But for all this to reach fruition, we need to rely on the most basic building block – Static Data. Many companies have grand ideas of how to maximise revenue with data streams, yet fail to grasp the essential need for good, sound, structured Static Data.
Definition
This is data that remains constant (mostly) during the lifetime of its use; once input and recorded it becomes static and is used as reference data. The most logical example would be the data on relationships – when a company starts trading with a new supplier, a new record needs to be added to the bookkeeping system.
Types of data include:
- Legal name of counterparty
- Short name
- Legal address
- Telephone number
- Fax number
- Contact persons
- IBAN
- BIC Code
- KvK number
- BTW number
Once the Static Data has been input it should only be changed by authorized staff. Dynamic data – the lifeblood of Big Data – can later be input (trades, invoice numbers, delivery dates, amounts etc.), but it needs good Static Data to make the data consistent. The complete data set for a counterparty must always be unique – there can not be 2 entities with the same set of data.
The structure of the data is also important – it could quite easily be the case that a company has one large client with the same bank details, but relationships with 5 different divisions. It is therefore essential that the correct protocols are in place for consistent data – whilst the legal name will be the same the importance of the short name becomes evident.
When it goes wrong
Inter company communication does not always involve use of a bookkeeping system. If staff start referring to a counterparty by another name than is in the system or use a name that is in the system but not the name they mean, problems can occur. Incorrect bookings arise which can lead to incorrect exposure levels or limits being breached. It can also be that a legal entity in a different country is referenced as they have offices in more than 1 country and issues such as VAT (BTW) can suddenly appear.
The need for secure Static Data is very high – the consequences of errors should never be underestimated. Data entry should be undertaken by people who do not enter any other data into the systems – in other words it should not be undertaken by the same staff that work in debtor and creditor administration.
Furthermore, a clearly defined protocol needs to be implemented to determine when and how Static Data can be changed.
In a little more than 1 month from now, GDPR comes into effect. The urgency to understand Static Data and to appreciate its significant contribution to daily operations has never been greater.
If you have any questions, please feel free to contact us.
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