How to Create Visually Appealing Financial Reports

I recall consulting for a small manufacturing company (about 350 employees) a few years ago, where I was tasked with setting up a reporting system and some fundamental internal control and internal audit functions. The first thing that struck me was the incredible amount of data flowing out of the accounting system. Just about any data residing in the accounting software database was accessible, either through standard reports or custom database queries. Typically, I see this in larger organizations with more sophisticated IT systems, but here was an opportunity to do something meaningful with all that data.

The Challenge with Data Overload

My immediate reaction was, is anybody really able to make sense out of all this data? Can they look at it and understand it in a meaningful way? And finally, how often do they look at the data, and are they able to make any informed decisions after analyzing what their system provides? It became apparent that poring over columns of numbers and seemingly an endless number of sheets of paper was a chore no one at the company enjoyed doing, and usually resulted in the reports either being filed away or shredded. No informed decisions could be made in the way the data was presented. There was absolutely no value in continuing this pointless exercise.

Implementing a Financial Dashboard

The first thing we did was set up a financial dashboard with a graphic display of all key data. The incoming data was selectively used to visually display (using MS-Excel’s comprehensive charting and graphic tools) charts of key financial ratios and key performance indicators. Unfortunately, the raw data had to be manually keyed into certain Excel tables that drove the visual dashboard. There was no automated link to accounting data or budget data, and all reporting was two-dimensional and could not take advantage of the multi-dimensional nature of certain business data, such as sales regions, product lines, customer classes, etc. However, this was a giant step forward in a journey of discovering additional automation opportunities.

Creating Visual Reports

We set up charts with monthly data points for all key sales data, gross margins, short and long-term solvency ratios, turnover ratios, financial leverage ratios, and several of their specific industry KPIs. Key financial statements were also formatted using pre-designed templates. Now everything was visually available to view and analyze. An endless amount of meaningless raw data had finally come to life and encouraged management to seriously look at it from a perspective never available to them before.

The Benefits of Visual Data Representation

For the first time, they were able to see specific trends, strengthening and deterioration of certain financial ratios and KPIs. The decision-making process was finally starting to make sense. The point here is that we all respond so much better to visual representation of data; data that our computer systems and software have little or no difficulty processing, but which we have such a hard time interpreting unless it is visually appealing and well organized. With the right tools, this data can easily be translated into a colorful and engaging format, encouraging us to closely pay attention to it and respond quickly to what it is trying to tell us.

Discovering a New Software Solution

Fast-forward a couple of years. I recently discovered a software solution that deals with all the shortcomings listed above and is fully integrated with a company’s business data. Within a few days of using Centage, I realized that I finally found a tool that not only can address the issues described in the example above but can perform automatically and nearly effortlessly (no data entry needed) and with no errors, while utilizing the multidimensionality of the database.

Seamless Data Integration

In its most fundamental function, Centage seamlessly connects to data cubes (multi-dimensional data arrays), which store data from my automated budgeting and forecasting solution. Centage collects data from accounting software packages or ERP solutions, as well as all of its own budgeting and forecasting data (see my other blog entries on this enterprise budgeting and forecasting solution). When you set up display templates using Centage, inside MS-Excel, data residing in data cubes create your specific charts, graphs, and reports every time you connect to the data cube and with up-to-the-minute accuracy and detail.

Leveraging Excel’s Capabilities

It is remarkable to note that all of Excel’s graphic and charting capabilities are available to Centage users. Presentation quality financial reports are also available and will have the same appearance (i.e., format) each time you run them. And no formulas and links are ever used or required in Centage. There is 100% automation and zero errors. The source data will always be faithfully represented in Centage.

Automatic Data Updates

As soon as closed accounting periods’ data is available, it automatically appears as a visual representation of the data in Centage, once a connection to the data cube is made. Any reports set up in the software will also automatically update. Various dimensions can be used to display specific data. With a click of a mouse, specific dimensions are selected, and only data that pertains to these dimensions shows in the charts and reports. Slicing and dicing data has never been this easy.

Displaying Financial Ratios

Of all the reports and charts I’ve already put together, I personally like to display graphs of critical financial ratios, both the forecasted versions and the actual ones. With Centage, this becomes a simple reality. I can see in charts how actual current ratios change from period to period against their budgeted version (which is automatically derived from the Centage model). Other ratios based on Balance Sheet or Income Statement data are very easy to display.

Accurate Forecasting

What about the accuracy of forecasted Balance Sheet accounts required to produce accurate financial ratios? You may realize by now that Centage is the only product of its kind to automatically calculate an accurate Balance Sheet (and a Statement of Cash Flows), using your budget line data input and Centage’s selected, built-in, business rules and drivers. When you have a reliable and accurate forecasted Balance Sheet, you can display these key Financial Ratios with confidence using Centage. Of course, data coming from the actual and budgeted Income Statement (and all of its versions), and other reporting data defined in Centage can also be part of the display.

Avoiding Overcomplication

There is no limit to what you can do with this software. The hard part is to restrain yourself to creating only the number of key reports, charts, and visual displays that really need to be analyzed and monitored. It is so easy to get carried away and create a multitude of colorful charts and reports that you may not be able to comfortably analyze and monitor periodically. Usually, less is more, and you’ll soon know exactly what to focus on, especially when it’s so simple to create (and delete) elements in your display output.

The way I see it, with Centage you’ll never look at your accounting and business data the same way again. There is simply no substitute for accurate, reliable, and timely delivery of key data in a way you can immediately see and understand.

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