Jan 20, 2017

Communication of Financial Results through Data Visualization

Timothy P. Dinan, CPABy Timothy P. Dinan, CPA, ABV, CGMA | Berks Packing Company Inc.

I readily admit that I am a numbers nerd. When I first heard of, and started to understand, the term “big data” I thought I had died and gone to heaven. I quickly snapped back to reality as I realized my audience is not as enamored with numbers as I am. People like me need to translate these awesome numbers into something meaningful for others. Enter the world of data visualization.

I have found that a combination of data visualization with written and oral communication in the correct balance can effectively explain where your company has been, where it is currently, and where it is headed.

Visualizing your dataThere are quite a few data visualization software packages that are both robust and reasonably priced. If you are considering adding data visualization to your financial presentations, I recommend starting with what may be currently available in software you already own. Excel added new reporting tools in its 2013 release called Power View and Power Map. It allows the user to present data in nine different chart types, a matrix view, a card view, and a map view. Also, Microsoft offers Power BI, a cloud-based business analytics service that gives you a single view of your business data in a customizable form. Also, most of the stand-alone Excel-based and database software packages include data visualization components, all of which are fairly intuitive to use. But therein lies a problem: too many options! How do you present a consistent and concise visual message that covers all the crucial business areas?

I found an answer to that question through the International Business Communications Standard (IBCS) Association. Yes, there is such an organization. It was founded in the 1980s by an engineer named Rolf Hichert, who started his consulting career with McKinsey & Co. Inc. Among other things, IBCS issued seven rules for improving formal business communications using visualization of business data. The seven rules use the acronym SUCCESS. I think you may find them helpful when you determine how best to present your data visually.

Say Convey your message, and say what you have to say: Every report and presentation should carry a message.
Unify Apply semantic notation: Things that mean the same should look the same. This rule applies to all content.
Condense Increase information density: All information necessary to understanding the content should, if possible, be included on one page.
Check Ensure visual integrity: Information should be presented in the most truthful and the most easily understood way possible.
Express Choose proper visualization: The charts and tables selected should convey the desired message as intuitively as possible.
Simplify Avoid clutter: All components that are too complicated, redundant, distracting, or merely decorative should be omitted.
Structure Organize content: Content should follow a logical structure. Corresponding elements should be exhaustive without overlap.

Once you have created your data visualization format, the next – and probably most important – step is to communicate this data to your audience. I believe the CPA profession, for whatever reason, has a tendency to drop the ball when it comes to the communication aspect of the data. The inclination is to just send the data and assume the reader will understand it. This is a terrible assumption. Data presentation is the point where we have the opportunity to guide and lead our companies with an interpretation of what exactly the data are telling us and what actions are needed from the company.

In my situation, monthly meetings where I orally present results along with a top-level written financial analysis appear to strike a good balance between not enough and too much. Yours may require more or less frequency, but through experimentation you will find the correct mix. I also provide weekly updates on key financial indicators in a written format that can also incorporate data visualization. Continually seek feedback from your audience to ensure they understand the data as presented and are acting on it. They may also have suggestions as to what could be changed to enhance the process. You will really see if your communication is bearing fruit through the company’s results.  

I may be wearing my virtual reality goggles enjoying our company’s results in 3-D, but remember that data visualization – along with the proper written and oral communication – is a process that needs to be tailored to your company’s needs. But regardless of which manner you settle on, data visualization allows us to distinguish ourselves from spreadsheet-only accountants. If done correctly, your audience will truly appreciate it and you will become more valuable to your organization without having to give up your love of numbers.

Timothy P. Dinan, CPA, ABV, CGMA, is vice president, finance, with Berks Packing Company Inc. in Reading, Pa. He is also a member of the Pennsylvania CPA Journal Editorial Board. He can be reached at timdinan@berksfoods.com.

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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.