Data visualization puts financials in focus

“Every picture tells a story, don’t it.”  “A picture is worth a thousand words.”  “I found I could say things with color and shapes that I couldn’t say any other way – things I had no words for.”  Regardless of form, visual representations are powerful ways to tell stories or represent a moment in time. The same can be said of data visualization.

Data visualization translates information into a visual to make data easier for the human brain to understand. The visual might include graphics, plots, infographics, animations and the like. This makes it easier to view large data sets and see patterns, trends and outliers.

Finance is awash with data. Often the information needed to make strategic data-driven decisions is locked away in the very data needed for lack of an effective way to share its story. That’s where data visualization comes in. Finance leaders need to explore new ways to manage, analyze and share value from data. Too often finance leaders use tabular data, which requires more time to digest and understand. Many organizations manually pull data into spreadsheets to graph and analyze data, requiring manual effort and causing delays in information needed for decision-making. This makes it hard to tell the story in a timely manner, and impossible to tell the story in real time.

Finance leaders need to use data tools to provide the answers CEOs wants so they can effectively run thriving and successful businesses. The answers are there, hidden in the data, but finance leaders need the right tools to exploit and utilize it to their best advantage. It is their responsibility to drive that change. Data visualization tools, such as an interactive visual explorer, empower finance leaders to tell the stories needed to propel business growth, transform product and service offerings, and ensure the long-term sustainability of the organizations they support.

Data visualization benefits

Data visualization provides a quick and effective way to share information using visuals. It helps businesses identify which factors affect revenue, profit, and loss, shows weaknesses and areas of concern, makes data more memorable and relatable and pinpoints where strategic shifts need to occur.

Other benefits include:

• Eliminated need for data analysts and business-intelligence tools – Using the right tool, such as an interactive visual explorer built-in to the financial management platform, there’s no need to employ data analysts to extract information from financial data. As well, there’s no need for business-intelligence tools, which are difficult to set up and maintain.
• Better engagement. Let’s face it, large data sets that focus on financial information can be a bit dry. The CEO and other business leaders are looking to you to net it out, and visuals can help you do that in a way that’s more engaging.
• Faster decision-making. Data visualization makes it easier for your audience to quickly absorb information and gain insights.

Data visualization tells the story. Data visualization using an interactive visual explorer tool embedded in the financial management platform lets users view and draw insights, identify correlations, recognize trends and draw data-driven conclusions. This gives decision makers an opportunity to make efficient, informed decisions in a way not possible with textual data alone. Simple reporting without effective visualization leads to a greater risk of the business leaders drowning in data.

Data visualization: what not to do

Data visualization can greatly improve information sharing. As finance leaders seek to become more strategic within their companies, data visualization allows the rest of the organization to better understand the power of finance. As Peter Parker was cautioned, with power comes great responsibility and there are some things not to do when using data visualization

• Relying on bad data (or the wrong data) – I’ve long said that just because you can automate something, it doesn’t always make sense to automate and a bad process that’s automated becomes a bad automated process. The same is true with data visualization. Bad data that’s visualized is now visualized bad data, and considering the power of data visualization, it can have a profound negative impact.
  
  Consider the following scenario. Many QuickBooks users download data from the application and then dump it into spreadsheets to create charts and graphs to help share information. This presents challenges, including data-set selection for the representation. This is a manual process and creates opportunities for errors. Now imagine those errors go unnoticed and end up in the charts and graphs shared with business leaders, investors and other key stakeholders. What a disaster.

• Relying on a poor design. We all know that some pictures are better than others, and sometimes poorly designed pictured tell the wrong story or end up creating confusion. Data visualization is no different. Pie charts are great, but fail to show comparisons, relationships, distribution and composition. There are better solutions; for example, the integrated interactive visual explorer in Sage Intacct offers more than 25 different visualization types and over 200 prebuilt visualizations that can be used as-is or as customizable design templates. Popular spreadsheet applications can’t compete with this vast array of options.

• Not including stakeholders in the process. As companies grow, often the gap between Finance and Operations grows as well – they use different tools, key performance indicators and vocabularies to share information. Data visualization can help bridge the gap when stakeholders outside of Finance are asked what they need to gain better insights, to make faster decisions and to move toward the common goal of building and maintaining business success.

Data visualization: look at the big picture

For the Finance professional, effective communication and collaboration using data visualization has one irrevocable requirement – the data must be found in a single source of truth. A cloud-native financial management platform is the logical foundation. With a wide range of reports and dashboards for forecasting and visualization, it’s better suited for data visualization than a spreadsheet. You can piece a solution together using bookkeeping software and spreadsheets, but you won’t get the real-time, trusted and verified information you need to share with your stakeholders to make strategic data-driven decisions.