Data visualization: A picture worth 1,000 numbers
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Data visualization: A picture worth 1,000 numbers

1 month ago ·

When you travel abroad, you may use an interpreter or perhaps a tool like Google Translate to help you order at dinner.

Accounting and finance professionals have a similar tool for relaying financial data that can read like a foreign language to business decision-makers.

Data visualization allows you to communicate mounds of financial results concisely, empowering leaders and clients to make strategic decisions at the rapid pace required in today’s environment. This data reporting skill leverages graphics to spot trends and outliers, and it can deftly explain a data-laden spreadsheet’s worth of descriptive, diagnostic, prescriptive, and predictive analytics.

Not all financial charts and graphs are made equal

Members of the finance team are uniquely positioned to inform business decisions with comprehensive data visualizations, according to Marie Monet, CPA/CITP, CGMA and the director of business intelligence and data analytics at James Moore & Co.

“Data visualization is more than just creating a pretty graph,” she said. “It's about explaining what you are going to do with it.”

Leaders and clients rely on visuals created by finance professionals to understand their businesses’ financial health. Data visualization is one key to achieving an agile finance transformation, Monet added.

“That doesn’t mean that the CEO or the client doesn’t want to see the underlying detail, but things are moving too fast for us to spend time going tab by tab,” she said. It’s more efficient to show a “visualization that says, hey, we've got a downward trend here, and we can point to these three reasons as to why.”

Data visualization tells a fuller story

Companies collect data from all corners of their businesses, including sales, website traffic, and human resources. Data visualization makes it possible to connect disparate data points to improve business outcomes.

“Data visualization is going out and grabbing operational and financial data and marrying it together, because oftentimes those sit in very different systems,” Monet said. “That’s where a lot of businesses might struggle — bringing the data together and then doing something meaningful with it.”

Say you want to know the impact of employee training on gross margin. Since businesses would measure employee training qualitatively, there’s no line graph to explain the relationship, Monet said. Accountants who have honed their data visualization skills and use of business intelligence (BI) platforms are better positioned to find answers to such abstract questions.

Tell a more accurate story

With more financial data than ever at a company’s disposal, businesses have turned to technology — including machine learning — to provide the first layer of data analysis. Financial professionals are the trusted advisers who explain the data to leaders or clients to inform business decision-making.

“[Machine learning enables] the finance professional to process data more accurately and more quickly,” Monet said. “The technology is really enabling the financial professional to be better.”

Technology’s high-level analysis can also make short work of identifying gaps and inconsistencies in data that accounting professionals can investigate and present to management.

With the boost from technology comes considerable responsibility. Accounting and finance professionals leverage their data analytics skills to create easy-to-understand graphics representing complex results, acting as interpreters between companies’ big data and time-strapped business leaders, Monet said.

Sometimes during the visualization process, it becomes clear that a company isn’t collecting the right type of data to address a business need, Monet added.

It’s not uncommon for a client to ask for the reasoning behind a financial trend — why the company’s cash flow drops off in a specific month, for example — that can’t be explained with the data available. The solution becomes helping the client put systems in place to capture the data necessary to answer the question.

She added that professionals should take steps to make sure that data quality is “on point,” meaning that inputs should be clean, complete, repeatable, and scalable.

“You're driving the narrative, and you better make sure that you're being thoughtful about what you're putting up there,” she said.

Visuals plus words tell a compelling story

Data visualization doesn’t eliminate the need for written explanations. The context of a graphic — the data’s origin, how it was collected, and where potential gaps exist — is an essential part of telling a story with data.

Monet said that data visualization is best accompanied by recommendations for action.

“We’ve become numb to the picture,” she said. “It can easily get repetitive and become useless unless there's some major pop. One way to circumvent that is to make sure you’re putting a call to action that you're driving as the preparer of the visualization.”

With a comprehensive understanding of data visualization, accounting and finance professionals are able to improve outcomes for leaders and clients.You can unleash data’s potential by earning a data visualization certificate.

Ryan Lasker, CPA

Ryan Lasker is a senior technical writer at AICPA & CIMA, together as the Association of International Certified Professional Accountants.

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