If a picture is worth a thousand words, what is one chart worth?
For some CFOs the answer is potentially millions in revenue. It can increase their influence in the boardroom and be a fast track to the CEO position. Here’s why: Finance teams are being tasked with processing—and making sense of—more and more data. In fact, according to our Adaptive Insights CFO Indicator Report, 58% of CFOs expect the amount of data they process to increase by up to 50% over the next five years.
Here are three ways data visualization can help you understand what the data is telling you:
1: Open your eyes to insights and foresight
While most company leaders would prefer too much data over not enough, trying to make sense of all those numbers in a racked-and-stacked spreadsheet can be like drinking from a firehose. Endless columns and rows of numbers simply don’t tell a story. And CEOs, board members, department heads, and other C-suite executives don’t always have the financial training or the time to make sense of the numbers.
But by visualizing financial data so viewers can distinguish patterns and focus on what matters, you can quickly and easily present the numbers in a way that tells the story behind them. Instead of hitting your leadership team with those endless rows and columns of numbers, you can provide strategic insights and foresight so they can make critical decisions.
2: Take off the blinders
Despite the promise of data visualization, few CFOs now take advantage of its power. According to another CFO Indicator Report, only 16% of respondents say they are currently generating visual reports, compared to a whopping 59% of reports delivered in spreadsheet format. It’s not that they don’t recognize the value in financial dashboards, histograms, pie charts, and other visuals. It’s that spreadsheets aren’t conducive to quickly creating charts and graphs.
If you’re working primarily with spreadsheets, you can easily spend half a day producing a graphic, only to have all your work undone by a last-minute update to the data it’s based on. Even when things go well, you’re likely to spend so much time producing the “what happened” graphic that you don’t have time to analyze the “why did it happen” behind the numbers.
3: Visualize financial data to drive better decision-making
Despite the current lack of visualization in reporting, CFOs recognize the need to improve the way they present their financial data. When asked what FP&A teams could do to be more effective, 31% of CFOs mentioned improving data visualization skills. In another survey, 53% said improving data visualization is an initiative their team would undertake within the next year.
Financial data visualization isn’t just about reports. By using active planning and real-time dashboards, your team can have a dynamic visualization into what is going on in the business at that very moment, helping drive decision-making now during the accounting period instead of at the end of the month. This functionality doesn’t exist for teams that rely on emailing spreadsheets back and forth. You’ll need smart financial software and automated data collection, including data cleansing tools like ETL (for extraction, transform, and load) to take advantage of this new kind of financial data visualization. But once you get it in place, you’ll see—in this case, literally—the difference it can make.