5 tips to improve your financial storytelling
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5 tips to improve your financial storytelling

1 month ago · 3 min read

Data can tell a story — but extracting meaning is hard.

The meaning of data can get lost, muddled, overlooked or misinterpreted — this is why financial storytelling is important.

A branch of data visualization, financial storytelling “is taking a data set and being able to bring it to life,” explained Kevin Wang, CPA/CITP, director of innovation at Warren Averett. “Rather than looking at a set of a lot of numbers, accounts and figures, you’re really making it visual. You’re giving it some perspective in terms of timeline.

”Financial storytelling falls under the broader data analytics discipline — a growing, in-demand skill set for accountants. The ability to create eye-catching and easy-to-understand visuals with clear words to explain the visual image can cultivate new insights, identify different correlations and solve problems.

To take financial storytelling to the next level and to give extra vibrancy to static reports, implement these five tips.

1. Use all the data. General ledgers are full of data sets waiting to be graphed, but these transactional numbers tell only part of the story. Effective financial stories include additional perspectives.

Operational, benchmarking and competitor’s data are all data sets that can help create a fuller story, Wang explained.

“Traditionally in accounting, you have the balance sheet, which is based on a given point in time,” Wang said. “Then you have the income statement, whether it’s by year or by month, and that is over time. [The income statement] is more of a story than just the balance sheet.”

By combining various data sets, financial storytelling uses a wider-angle lens to tell once-overlooked stories within traditional income statements, balance sheets and beyond. It establishes a more holistic approach to understanding an organization’s financial health.

“You can get insights into trending data,” Wang said. “Not necessarily like something went up X amount over one month, but was it because of the first part of that month? Or which accounts correlate to each other? This is harder to tell over traditional income statements and balance sheets.”

2. Know the audience. A CFO and a salesperson could benefit from the same data sets but different story formats, even if the stories are similar.

“For a CFO, you may want to keep it higher-level. You may want to condense it, so it’s only showing things that are out of the norm,” Wang said. “You don’t want to give a CFO a ton of data for them to have to sift through and spend their time trying to figure out what the story is.”

Presenting to a salesperson would take a different approach, Wang continued. A salesperson could benefit from more details and possibly additional insights to pinpoint how to do better and sell differently.

“You can tell so many different stories from just one data set, just based on audience and what the purpose is,” said Wang.

3. Understand the problem at hand. As data is compiled and explored, Wang urges accountants to understand the problem being solved. Figuring out the purpose will drive better visuals and stories.

Starting with one large data set is too much and too broad. Like any good story, it needs to be refined. It can’t be everything to everyone — and that’s OK.

“You want to basically come up with a hypothesis, ask questions and then use the data to tell that story,” explained Wang.

This helps steer the audience to the conclusion being made.

“Let’s say you give them a graph or line chart of three years and 10 accounts,” Wang explained. “That’s 30 items, but if you really want them to focus on the one or two accounts that really matter to the story, or focus on a certain timeframe within three years, highlight that.”

Set a focus for the audience and provide information that helps solve the problem.

4. Set the stage properly. Data can be very misleading — especially if certain figures are omitted or overlooked. Before the presentation, ensure there is enough context to reduce confusion or distraction from the intended focus.

The timeframe of the story matters.

“If you saw a line chart and things were going really crazy at the very beginning of your chart, but then it kind of mellows out, you’re going to leave the reader wondering what was happening before,” Wang said.

Readers don’t want to be left with a cliffhanger. In this instance, the fix would be to widen the timeframe.“They say numbers don’t lie,” Wang said. “I do think that’s true, but they can be skewed in terms of what’s being presented.”

Wang suggests ensuring nothing gets left out that could be interpreted as important to the overall conflict and resolution of the story.

5. Educate, familiarize and practice. Learning new skills is a challenge, and continued experience and exposure will build those skills. Training will provide exposure to software, tools and processes, but each is nuanced. Mastery of financial storytelling takes time. “In terms of how the bar chart should be presented to tell the best story, that will come from experience. You won’t get that from a library book or YouTube video.” said Wang. He concedes that there is a steep learning curve, but “training is great for the fundamentals.”

Financial storytelling and data analytics are critical in bringing data to life, and the Data Visualization Certificate teaches the foundational skills of visualization techniques, including charts, graphs and reporting tools. If you want to take your technology skills to the next level, the Certified Information Technology Professional® (CITP®) designation will allow you to gain a clear understanding of data analytics techniques and methodologies, and how to drive your organization forward.

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