With accounting data visualisation, you'll learn more about your clients' needs to facilitate additional advisory services more frequently.
Throughout this article, we will explore the inherent value of data visualisation tools for more significant innovation and decision-making. We will explain why organising and visualising data can help you to supercharge your practice for a long and prosperous future.
How can data visualisation be used in accounting?
Data visualisation can be defined as the process of turning data into pictures.
When data is presented visually, it becomes easier to understand comparisons, the relationships between data points and even different data sets. Compare this to viewing raw figures in an Excel spreadsheet, where an accounting team member or client must calculate to interpret the numbers mentally.
For accountants to successfully guide the financial decision-making of their clients, data insights must be presented in a way that is easy to understand. It is worth considering that these insights need to be distilled down in a way that makes sense to clients, many of whom may be from non-financial backgrounds. Data visualisation can bridge this gap.
Some meaningful examples of accounting data visualisation include:
- Pie charts: representing numbers as slices of percentages that add up to a whole (100%).
- Bar charts: these help you compare the data of different groupings or trace changes over a predetermined period.
- Line graphs are a great way to show changes over time and are especially useful for financial data.
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How to create compelling data visuals
When producing effective visual data, accountants should keep the following things in mind:
- Think about the audience: Remember to analyse "who" will be seeing the data and their level of expertise so that you can tailor presentations to their capabilities.
- Focus on your goals: Keep what you're trying to achieve through data visualisation at the forefront of your mind. This will help you to select the most appropriate visualisation approach.
- Use software: With data management and analytics software, you can effortlessly produce visual data reports for your team and clients.
- Think about colour: This will help you distinguish different data values. If your data is being presented as part of business advisory, consider how to match data colours to your business client's brand palette.
How accounting data visualisation can help you define new opportunities
Jump back a few decades, and the most vital component of any business is its people. But in our hyper-connected, highly digitised workplace, data is "the engine driving the total value and growth of modern organisations".
No matter what industry you are in, data is the beating heart of your company's future – but how you parse and analyse that data is critical to organisational success, particularly in data-heavy industries such as accounting.
It wasn't too long ago when decisions were made based on data in multiple spreadsheets and, at times, guesswork, hope and luck. Thankfully, modern technological innovations have delivered new data visualisation tools to the market, bringing a significant shift in how businesses use data.
In place of risky strategies involving gut feeling or personal experience, forward-thinking businesses use data visualisation tools to identify patterns in their data and act upon the insights objectively. It's no wonder that data visualisation tools are one of the most active areas for investment in information technology.
The opportunities of data visualisation for accounting practices
Here are five critical ways that better accounting data visualisation and more intelligent decision-making can boost your practice:
- Higher client retention rates: After the hurdle of winning new customers comes an even more significant challenge: keeping them. Having to attract a new client costs five times more than what you'd spend retaining an existing client, and having valuable customer data at your disposal can help you do exactly that.
- Visualisation leads to innovations: Without the relevant data on how your practice operates, how can you develop new ideas to improve your business model? From audience insights to A/B testing your marketing strategies to getting insightful visual data on how your people are performing their tasks, data captured on a workflow solution through BI reporting can quite literally show you where you need to innovate
- More skilful teams: In addition to revealing any productivity gaps and allowing your team to streamline their operations, data can also provide insights on new opportunities. These may relate to eliminating time-consuming, repetitive accounting tasks or even cross-sell/upsell opportunities to make your workforce more productive and profitable.
- Sustainable growth and higher profits: Thanks to rapid digitalisation, accounting is becoming a more competitive industry, whether you're a sole practitioner or a larger practice. The key to accounting practice growth is to build up your customer base. Using data to attract and retain more clients can help your practice grow steadily and sustainably, with just a 5% increase in customer retention leading to 25%–95% greater profits.
- Smaller accounting firms can step up: With accounting data visualisation tools at their disposal, small accounting firms can provide high-value business advisory services to their clients they would previously not have had the capability to initiate.
The benefits of accounting data visualisation
Accounting data visualisation is essential for accounting firms for a variety of reasons:
- Greater clarity: Using data visualisation techniques, such as digestible bar charts, graphs and dashboards, makes it easier for accountants and their clients to understand accounting data.
- Quicker decision-making: Let's face it, accounting firms need to make timely decisions. With instantaneous insights from accounting data visualisation, accountants can quickly make informed decisions.
- Better communication: Data visualisation's accessibility helps accounting firms take data-based conversations to a new level, whether within teams or between accountants and clients.
- Improved efficiency: Accounting data visualisation tools will save time for busy firms and reduce the risk of manual errors.
Choosing the right accounting data visualisation tool for your practice
The opportunity to get ahead of your competitors and lead the pack for years is in the form of data.
Data is the most essential asset for accounting practices, but its inherent value is further expanded when you have the technology to visualise and apply critical insights. By embracing a data-driven culture in your practice, you can stand apart from the competition while enjoying a more streamlined office, greater productivity and more informed decision-making to help stay ahead of the pack.
ZAP Data Hub is a centralised data warehouse and analytics solution perfect for smaller practices looking to save valuable time and get instant access to empowering data visualisations for their practice and client data. Schedule a demo today.
With Access APS, larger accounting firms will have access to Practice IQ, which extracts financial information and presents it through visual dashboards, making monitoring your firm's performance easier. If you're ready to embrace all the benefits of being a data-driven accounting practice, why not book a demo today?
Fathom is a single platform purpose-built for business advisors. You will get access to relevant insights and be able to produce visually engaging management reports within minutes. Start a free trial today.