In our previous blogs (here and here) we discussed how enterprises struggle with obtaining financial insights from ERP systems and how a solid data foundation can enable scalable insights and automation. In this blog, we will explore how visualization can help finance teams become better storytellers and provide clearer insights into business performance.
CFOs are encouraged to become better “storytellers,” by communicating important messages about company performance, strategy, and opportunities in ways that everyone can understand. Finance departments are working to become true partners to the business, by providing critical metrics, KPIs, and forecasts, to guide decision-making. With ever-increasing data volumes, financial analysis can be overwhelming, but data visualization simplifies reporting, making it more engaging and actionable, especially from a CFO’s perspective.
As businesses face rapid market changes, traditional ERP systems often lack the agility to provide real-time insights needed for agile decision-making. Companies are adopting cloud-based solutions and advanced analytics, enabling CFOs to consolidate data from multiple sources, gain real-time visibility, and make informed decisions. Data visualization aids Finance teams by making information more accessible, highlighting key trends, and improving decision-making. However, poorly generated data visuals can lead to misinterpretation, and, ultimately, poor business results.
So, how can finance professionals make the most of the latest data visualization technology to tell compelling stories and encourage sound, data-driven business decisions?
Know your Audience and What matters to them?
The first rule of data visualization is to identify the purpose—what to visualize and who the audience is. It is important to understand “What kind of business questions do they care about? What decisions are at stake? What are the metrics that distinguish high levels of performance from mediocre or low ones? Which factors most dramatically impact revenue, expenses, and cash flow? What do members of the executive management team care about, and how can you provide a window to the data that is most meaningful to them?” Some insights may need you to include external factors such as competition, inventory, weather etc. The goal is to pinpoint audience interest areas and create visualizations that answer their questions in a compelling way. While building the data visualization, consider the following objectives for each visual –
– Distribution – Show how items are divided. E.g. Enterprise profit by business unit.
– Composition – Display data components. E.g. Accounts receivables different regions.
– Relationship – Highlight connections between data points. E.g. Cost reduction tied to business value
– Trend – Show data over a time period. E.g. how predictive models help achieve goals
– Comparison – Compare datasets but avoid overcomplicating visuals with too many categories
Selecting the Right Visualization Tools
The right visualization brings data to life, while the wrong one causes confusion. Rather than choosing based on visual appeal, focus on simplicity by selecting charts that presents information intuitively and optimal number of charts. Select visuals based on data type: nominal (e.g. customer name), ordinal (e.g. payment terms), or numeric (e.g. sales amount). For example, in our astRai platform, our templates for building SG&A Analytics dashboards, we applied the following logic to decide on the visuals:
| Metric Type | Chart Style | Why did we select this? |
|---|---|---|
| Actual Spend | Bar Chart | Easy to slice the data for a trend view and can be further split as a histogram for BU-level spend |
| Top 10 Vendors | Tree map | A graphical view gave quick intuitive understanding of the dependencies on different vendors |
| Tabulated Views | Zebra BI Tables | One of the most powerful table visual to give instant view that immediately show what’s going on with the business |
Advanced visualization tools offer advantages over spreadsheets by transforming complex data into interactive, easily digestible visual formats. These tools allow dynamic data exploration, and real-time data integration, ensuring decision-makers access up-to-date information. Drill-down features reveal deeper insights, helping CFOs make faster, more informed decisions.
Designing Effective Visualizations
Even with identical data, charts can differ depending on the design choices, such as colors, fonts, line thickness, and axis formatting. For effective visualizations, use clean designs with high-contrast colors, place key information in the top-left corner, and maintain consistency in visual cues (e.g. using red to indicate negative values). Always consider the perspective of your audience and seek feedback to ensure clarity. For example, consistent colors and clear labels in a sales trend chart help viewers quickly understand whether sales are rising or falling. Key principles for designing finance visualizations include Simplicity, Accuracy, Tailored, Consistency, Context, Interactivity, Balance and Data Integrity. Few best practices that we applied leveraging the above principles for one of the customers:
– Minimized clicks to access Balance Sheet and SG&A reports
– Optimal Vertical and horizontal scrolls within dynamic profitability reports
– Used a single pane to optimize the real estate within the page
– Added info icons for user self-service
– High standardization of visuals and views across pages
Storytelling with Data
Data storytelling combines data, visuals, and narrative to highlight meaningful insights. It’s not just about displaying numbers but putting them in context, making them relatable and easier to understand. A common issue we’ve seen in management reports is a lack of clear summaries that showcase overall performance of the balance sheet or profitability report. Finance professionals, excel at spotting trends and uncovering the story behind the data and hence with a little focus on data storytelling they can create wonders in the organization. Data visualization helps share these insights, enabling non-finance team members to grasp trends, identify outliers, and ask informed follow-up questions. For instance, a well-designed chart showing a revenue drop can prompt discussions about potential causes and solutions. The key is to find the insights that tell a powerful story and then think about how best to visually present that story to engage and inform the target audience.
Continuous Improvement and Learning
Data visualization tools are becoming more powerful every day. With the right tools, you can provide real-time insights into what’s happening in your business, turning raw data into a compelling story. For finance teams, this is a fantastic chance to showcase their role in driving strategic thinking and making data-driven decisions. Good data visualization is more than just turning numbers into charts; it’s about pulling out meaningful insights and presenting them in a way that makes sense to your audience. For example, a dynamic dashboard that shows real-time cash flow and profit margins can help executives make informed decisions quickly. Finance teams that excel in data visualization are seen as strategic leaders, adding immense value to their organizations by making complex data accessible and actionable.
Conclusion
In our journey beyond traditional ERP systems to unlock deeper insights from your data, we’ve uncovered some crucial best practices for data visualization and analytics. Effective visualization isn’t just about showing numbers; it’s about telling a story that turns complex data into clear, actionable insights. For example, a CFO can use a real-time dashboard to highlight revenue trends, cost overruns, or cash flow issues at a glance, making it easier for the entire team to understand and act on this information. By leveraging these visualization techniques, CFOs can transform their role from merely keeping track of finances to becoming key strategic partners who help shape the company’s future. Imagine being able to quickly show how different scenarios, like a new market entry or a cost-cutting measure, impact the bottom line—this kind of insight can drive more informed and confident decision-making. We encourage readers to adopt these best practices to enhance their financial storytelling. By making complex financial data easy to understand, you empower everyone in the organization to make smarter, faster decisions. Whether it’s a simple bar chart showing monthly sales growth or an interactive report highlighting key performance metrics, effective visualizations can turn data into a powerful tool for driving your business forward.