Tell Clients the Story Behind the Numbers With Data Visualization

Accountants are trusted advisors who businesses rely upon to see them through a tough and changing economic climate. To fulfill this increasingly expansive advisory role, accounting firms must work closely with their clients to provide an in-depth understanding of their data.  

It’s not only about crunching the numbers; clients expect clear communication and strategic insights based on reliable data. Accountants can meet this expectation through digital storytelling. This involves giving clients what they need to know about their data analytics, conveyed through accessible language, meaningful imagery and data visualization. 

Let’s look at some key facents of effective storytelling in accounting, as well as some key tools that can help your firm master this all-important art.  

Changing client expectations 

The modern accountant-client relationship involves clear descriptions and interpretations of the figures. Clients expect accountants to come to them with in-depth data analyses and recommendations on how to move forward. Businesses want actionable insights they can use to advance their long-term vision.  

So how do accountants provide these insights? By working collaboratively with their clients, they offer foresight and a clear picture of the company’s status. They can look to the future for areas of opportunity and potential strain. Simply having this knowledge isn’t enough: The best accounting firms give this information in the best way possible.  

There’s an element of communication involved, where accountants have to convey the story that’s hidden in the numbers in a way that’s transparent and useful to the company. Since the accountant isn’t always in the room when the numbers are discussed, it’s not enough to offer insights in a few isolated client meetings.  

The communication process, therefore, has at least two key elements: verbally explaining the insights to clients and providing documentation and reports that are clear and easy to interpret after the meeting ends. Both of these elements involve a critical component — storytelling. 

Defining effective storytelling 

All too often, finance professionals fall into the trap of the “data dump.” They strive to deliver value to their clients by shoveling layers of detail into dense documents. These files are often bound neatly and passed across a table, or they’re sent as a hefty email attachment that most busy corporate leaders won’t take the time to read.  

The detail is, of course, essential, but clients want to know the key takeaways. That’s where the role of the accountant as advisor comes in. The trick is to avoid the data dump and translate that information into clear insights that clients can use on their own.  

This translation process is called storytelling. It’s a bit like ensuring the numbers paint an accurate, comprehensible picture that business leaders can really use. There are a few key elements here as well: financial reporting should use clear language, vivid imagery and a logical flow of information.  

Clear language 

It might go without saying that financial documents should use language that their readers can understand. “Clear language” here is synonymous with “plain language,” a practice that’s endorsed by the U.S. Securities and Exchange Commission (SEC) for communications with stakeholders. When accountants talk to their clients, the same rule of thumb applies. 

Here are a few basic tips for using clear language: 

• Replace financial jargon with common terms 

• Use shorter sentences 

• Strive to use the active voice 

• Adopt bullet points and subheadings to break up dense blocks of text 

Clear language makes it easier to convey your message - what the client needs to know about their data. With clear language, they’ll not only get the message, but they’ll also be more likely to remember it. 

Vivid imagery 

Clear language is only step one when it comes to storytelling. After all, the following sentence is pretty clear: “Inventory transportation costs are down 20 percent year-over-year.” 

A clear sentence does not always tell a story, however. A good story tells the client not only what a data point says but also why it matters.  

Even the savviest business leaders benefit from the conceptualization of financial information. It’s the role of an accountant to show them the on-the-ground reality. In a modern financial report, it’s acceptable to include concrete examples that give meaning to the data.  

For example, a report that defines potential cost savings in dollars might give a business leader pause as they try to translate that figure into what it means for their company. However, if the report does that work for the reader, the meaning is obvious: “These cost savings allow for the expansion into three more brick-and-mortar locations.” 

Logical flow of information 

In any financial report, a client should expect to receive information in a certain way. A document might begin with an overview that outlines the details that will come later in the report. Bullet-point highlights might give clients the essentials of what they need to know, while later sections dive into these points in more depth. 

There’s a narrative to financial reporting that clients expect to see. Stray data that doesn’t belong or is in the wrong section can confuse clients and detract from the accountant’s strategic insights. 

Here’s an example: In a section on inventory transportation costs, it might not make sense to reference warehouse wages, unless they’re directly relevant to the metric being discussed. There’s no room for asides in financial reporting.  

To make your information easier to grasp, you can’t doubt the value of data visualization.  

Data visualization helps with storytelling 

Data visualization uses charts and graphs to communicate critical pieces of information. These not only keep the reader interested but can also enhance their understanding. A 20-percent reduction in inventory transportation costs might sound minimal, but expressed as a graph, it may seem more significant. 

Charts and graphs can also describe data that’s simply too complicated to convey in words. The evolution of inventory transportation costs over a period of time, compared to cost reduction targets, might be hard to explain in text. A time-series line graph, however, can show whether the company is consistently meeting its cost reduction goals in this area. 

Here are a few data visualization options: 

• Pie chart: This shows the components of a whole. A pie chart might divide up sources of revenue so the client can clearly see where the most money, or the biggest piece of the pie, comes from. 

• Bar chart: This shows a comparison of figures so the reader can understand the outliers. As an example, a client might want to see their average wage and benefits costs broken down by region. 

• Line chart: A time-series graph is one type of line chart that’s commonly used in accounting. Here, you plot several points that correspond to certain points in time. Each line corresponds to a specific metric. This is particularly helpful for comparing actual figures to targets so a client can see trends over time.  

Data visualization is just one benefit of using the right software when you’re delivering accounting services. The right software can reduce audit errors, improve efficiency, and ensure you’re delivering the full range of advisory services that your clients expect.  

Modern technology solutions 

The technology an accounting firm uses can make a significant difference in the insights it’s able to provide to clients. In the age of seemingly unlimited data, the capacity to harness and sort through that data is just the beginning. Accounting firms should also translate that data into insights their clients can actually use. That means the best technology should enable such firms to tell a compelling story. 

Modern solutions like Caseware Sherlock are the right choice for many accounting firms. Sherlock comes with chart and graph creation capabilities built in so you can effectively manage, interpret and communicate your data-driven insights.  

To learn more about how Caseware Sherlock supports the high-level work of accounting firms, request a demo today.