Data Storytelling Makes Accounting Information More Understandable

When you work in accounting, presenting financial information to an audience outside your organization’s finance or accounting department can be challenging. 

Will they understand the terms you’re using? 

Does the chart you created convey the significance of what you’re saying?

Data storytelling can help. It makes complex financial information more understandable. And when your audience understands, they can more easily follow any suggestions you make for a path forward.

Using storytelling gives the numbers context

Consider an example. You’re on an accounting team that is supposed to present a report on declining profit margins. Rather than simply showing a line graph with the drop in margins, your team uses data storytelling to explain the underlying factors. You frame the story with some historical information: “Over the past three years, our company has seen steady profitability. However, in the last quarter, our margins have dropped by 5%, signaling a shift in our financial health.”

You want your audience to understand the root cause is an increase in the cost of goods sold. Through data storytelling, you explain how the price of raw materials, transportation costs and labor expenses have risen. “For instance, the price of wheat used in our plant has risen by 12%, and due to supply chain disruptions, shipping costs have more than doubled over the past year.”

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Instead of merely presenting these figures, you use them to build a story around your company’s current financial challenges. The story is memorable and gives context to the numbers, helping your audience understand that the decline in profit margins is not a result of poor sales or mismanagement, but rather external factors that have increased operational costs.

Connecting the story to possible solutions

Data storytelling doesn’t end after you’ve presented the problem. You’ve also laid the groundwork for solutions. For instance, you could now say that to regain profitability, the company can either reduce its cost of goods sold or find ways to increase revenue.

You could then present possible solutions through your story. “To address these rising costs, we could explore renegotiating contracts with suppliers, look for alternate ingredients, or implement some efficiencies in our production process.” Alternately, you could suggest ways to offset the profit margin decline by raising prices strategically or diversifying the product line to reduce dependency on the most expensive components.

By explaining the cause-and-effect relationship behind the numbers and offering actionable solutions, data storytelling helps guide decision-makers to a solution (or strengthen your chosen action, if you’re the decision maker). It changes the conversation from simply looking at a down-trending graph to a story with possible options for improving things.

Data storytelling is an invaluable tool for accounting professionals who need to communicate complex financial information. Certainly, keep the visuals – your graphs and charts add to the story you’re trying to tell. But enhance them by using a narrative style to draw your audience in, explain the “why” behind the numbers, and set up the conversation for deciding how to address the situation.