Humans are wired to love numbers over text, pictures over written content, and dashboards over spreadsheets.
To make business decisions with spreadsheets, the finance team has to pore over thousands of rows of data. Analyzing company data lying in cumbersome spreadsheets becomes a chore so is often neglected. But when the same financial data is consolidated using data analytics and presented in a visual format —it’s easier to analyze and communicate the insights with the whole team.
What are financial data visualizations?
Financial data visualizations involve the visual representation of all information in the balance sheet, profit and loss and cashflow statements so the finance team can easily analyze the information and share the trends, exceptions and opportunities. Financial data visualizations transform static month-end statements into a more meaningful story that more people in a business can understand.
Why are financial data visualizations useful?
To forecast organizational performance and track variations against budgeted figures, the finance teams have numerous sources to collect in-depth data. However, finance faces two major problems in analyzing data and collecting insights:
1. Data is spread across multiple sources so manual interpretation becomes a daunting task.
2. Processed data has to be communicated effectively so users can comprehend and make decisions.
Data visualization lets the finance team convert complex data into smaller chunks and static figures into compelling stories that others can better understand and consume.
With data visualization, the finance team can easily communicate the financial performance to other people in the organization or educate the rest of the team to look out for certain events, such as when indicators are dropping like the threshold for profit margins. Visual representation in the form of charts, graphs, maps, and other graphics enhance understanding and helps people in making better decisions.
Also, data visualization puts endless rows and columns of data, available in multiple sources, on one screen, making it easier for the finance team and others to comprehend.
With the help of the data visualization tools, the finance team can build financial dashboards for visual comparison and analysis of KPIs. Dashboards let the users drill down into the data and see a wide variety of results on a single page.
The users can swiftly comprehend and measure data accurately, and in real-time, without affecting the general ledger. Below are some examples of the dashboards that a finance teams can build to communicate data to other people in the organization so they can understand the impact of their decisions on financial performance:
- Cash Management Dashboard;
- Financial KPI Dashboard;
- Profit and Loss Dashboard;
- CFO Dashboard; and
- Financial Performance Dashboard
How can Phocas help with financial dashboards?
Phocas combines data from multiple sources in one dashboard to provide a holistic view of the financials. Then, it lets the finance team explore and analyze data, manipulate it through interactive features, and drill down. This frees up the finance team from collecting data and filling spreadsheets.
Since Phocas does the laborious work, finance can focus on analyzing data, reducing costs and finding ways of increasing profitability.
Live dashboards present a snapshot view of financial performance. The users can analyze and track both legal and non-legal entities (branches, areas, departments, product lines, etc.) to measure financial growth.
Instead of simply visualizing data in graphs, piecharts and maps, Phocas provides an array of data visualization tools, features, and systems to give you an unparalleled experience.
You can customize data to meet your needs, present information as you want and access everything, including charts, dashboards, KPIs, data cubes, and reports inside the software.
Scott Sokoly, Business System Administrator says “ takes away the nightmare of producing consolidating financial statements that are broken down by branch division or consolidated for the entire company.
“The accounting department is excited because it's less work to make a consolidated financial statement. In the past, we have five Excel sheets and you basically add them together. It's just busy work for them so I think they're excited ,” says Scott.
because the accounting department didn't have time to prepare that level of report for every branch manager. All levels of our mid-management can now look into our performance, from expense analysis to margin monitoring. So I think the financial review is going to go deep into our business
We're able to make better decisions quicker and put information in the hands of the people who are really running our businesses day-to-day," says Scott.
Data visualization enables teams to have knowledgeable conversations about financial statements. Financial dashboards ensure that non-financial people can grasp the numbers and educate themselves about data to make informed decisions.
Phocas, as a data visualization tool, connects all pieces of the puzzle and transform business processes, thus becoming a partner to your organization’s growth and success.
To find out more about financial data visualizations, download this ebook: Turbo Charge your finance team with Data Analytics.