Why is data storytelling in finance important?
Finance spends a great deal of time each month compiling data from numerous spreadsheets and source systems.
Also, finance must provide answers to queries about the company at both the macro and micro levels. Whether it’s to prepare for a board meeting or finish the month-end closure procedure.
What Is Data Storytelling in Finance?
Creating a narrative around the expansion of the business allows you to explain the “why” behind your figures through storytelling. The procedure entails deriving value from financial measurements and efficiently sharing them with stakeholders and the rest of the firm.
Therefore, understanding what matters to the business deeply and putting data in place to measure it are the actual starting points for data storytelling in finance.
In addition, your storyline is created by your data infrastructure, which is the financial software you employ every day.
The narrative manifests readily if your system is configured correctly and you keep track of your transactions. However, the facts are automatic, so you don’t need to spend hours, weeks, or months piecing the story together.
As a result, you can concentrate on the story because of the automation. The enjoyable aspect of finance is being able to go into the figures and simplify complicated subjects so that your business associates and investors can grasp them.
The Value of A Data Story
Data stories are significant for the following reasons:
- Stories stick in the mind
- Stories appeal to our senses
- The emotional impact of stories
- Stories inspire us to take action
- Accounting and financial professionals need more than just data they own and report
- Finance must be able to communicate the numbers to the company in an understandable manner
- Analysis and problem-solving should not be the whole of a finance professional’s career. Instead, they should be able to communicate complicated data in straightforward and persuasive ways.
Data Story Levers
How to Get Better at Data Storytelling in Finance?
Almost every work, from preparing your SaaS board deck and presentation deck for funding rounds to regular operational chores like the month-end close, involves financial storytelling.
Therefore, you must possess the information and abilities necessary to convey the whole financial picture of your organization. These seven techniques can help you develop your financial storytelling abilities.
#1: Submit the Correct Questions
The finest review you can receive from a meeting of the board is, “You anticipated our questions!” In other words, you can predict the topics they’ll regularly focus on by comprehending the questions they ask over time.
What financial measures are important to them? What message are these indicators actually giving us? Do we need to change our concerns? By asking yourself these questions, you may develop presentations full of “a-ha” moments that lead to an interesting narrative.
#2: Practice Your Lines
Your ability to convey a story requires more than simply a strong presentation deck. Additionally, you can channel that excitement into your voice and tone by being aware of where your punchlines are—the statistics and significant victories that thrill your audience.
Furthermore, you may be asked about metrics for the sales funnel, headcount planning, or balance sheet forecasts; in each case, you must comprehend the statistics and the “whys” behind them.
#3: Keep Your Consistency
Storytelling’s worth rests in continuing into the next stage of development. Yet, clear difficulties and answers are shown in effective stories. Moreover, board members want to hear how you overcame obstacles and what you have planned for the future since they don’t intend for you to be stagnant.
#4: Prepare Your Data Infrastructure
Your data is only as useful as your capacity to timely gather, combine, and display it to provide users with the insights they require.
Also, scaling financial storytelling will be simpler the sooner your data architecture is in good condition. However, there isn’t a single best technique to create a financial information infrastructure. Yet, if you approach it as a framework for FP&A, you’ll be able to gather data from throughout the organization and provide everyone with up-to-the-minute information.
#5: Address Any Modifications To The Numbers
Metrics and KPIs are what you rely on to show growth patterns, but they can shift at any time for any cause. Furthermore, you develop confidence and transparency for your company’s development story when you can articulate and take responsibility for the “why” these critical markers are declining.
You want to make the numbers visible to management and leadership. Also, finance might turn data storytelling into complex Excel formulas, but that creates a silo where it is impossible to communicate the narrative or concentrate on why statistics are moving. Make sure you work with your division leaders to develop a few viable solutions to deploy throughout the course of the upcoming quarter, particularly if the figures are moving worse.
#6: Have A Mindset of Customer Service
Consider your colleagues as your clients and put them first. This is one of the top CFO traits finance teams may adopt. You can concentrate on working with each department to make sure they get the information they need to make the best decisions by having a customer service attitude.
#7: Improve Your Technology Stack
You may connect with and delve more deeply into your everyday financial duties thanks to the CFO software stack. Therefore, to guarantee ease of use rather than having to go between your primary systems of record for data, you must make your technology stack as fluid as feasible.
In order to do this, you must reduce the number of tools you need to consult. Longer review cycles caused by more technologies restrict finance from looking ahead to more effective growth strategies.
Conclusion – Data Storytelling in Finance
Communication of data-driven insights relies on visual design concepts and the capacity to develop a story. Not related to whether data storytelling is made in a BI tool or on a whiteboard.
However, a frequent reporting schedule that reveals the full picture of the data rather than merely updating a few data points should be anticipated by financial businesses and regulators. Also, decision-making throughout the company is eventually strengthened by developing a better knowledge of the potential of data visualization and narrative.
In order to become a data storytelling expert, you can take my course which is the choice of many successful finance professionals.