CPAs’ roles are evolving from being historians and compliance police into tactical advisors who interpret stories hidden in data. As Big Data gets bigger, data visualization is becoming increasingly more important for CPAs, who need to understand large data sets and make informed decisions.
Data visualization should be user friendly, have a purpose, provide value and use reliable data. When implementing a data visualization project, take the following considerations into account:
- Start with a plan and identify the users. A plan should define the purpose of using data visualization and take the users’ skills and time into consideration.
- Ask how, when, what and why when beginning to observe patterns. For example, how do cost of sales change over time? When do they increase or decrease? Why does this happen and what does it mean? Using this process, the story forms, and then data visualization conveys the story to users.
- Use bar and line charts because these methods easily show data differences. Pie charts are the least effective way to present data — because with more than five slices, the visualization becomes useless. It is also difficult to compare slices in one pie chart to slices in another pie chart.
Some common free data visualization apps are Google Charts and Microsoft Power BI. Both can manipulate data from multiple sources and make graphs quickly, but each comes with its own performance problems. Some popular paid apps are Tableau and Qlik Sense. These apps can present complex data in simple ways and are good for financial reporting. However, these apps require some technical knowledge and can be slow.
These are just a few of many data visualization apps available. When choosing an app, it’s best to focus on a pleasing user experience, an easy-to-read dashboard, simple visuals and contrasting colors. Also, consider performance before complexity, because sometimes less can be more.