Dynamic visuals enable storytelling in management accounting
Middle East – IMA® (Institute of Management Accountants) has released an SMA (Statement on Management Accounting), “Data Visualization,” on the increasingly important role of dynamic visuals in finance and accounting. Authored by Ann C. Dzuranin, Ph.D., CPA, professor of accountancy at Northern Illinois University, the report describes the different types of data visualizations, how to create effective visualizations, and how to tell a story with data.
In order to take advantage of the vast troves of data businesses are gathering, finance and accounting professionals need to gain new skills to manage, analyze, and extract value from data. Having such data visualization skills enables management accountants to display what matters, propel business growth, and enable management to make strategic decisions.
“A well-crafted data presentation should have a balance between data, visuals, and the message you are trying to convey,” said Loreal Jiles, IMA vice president, research and thought leadership. “Increasingly, management accountants are relied upon to marry financial and nonfinancial data, leveraging business acumen, analysis, and communication tools, to make recommendations. Data visualization offers accounting and finance professionals a path to delivering this value.”
The SMA discusses the two types of data visualization: exploratory and explanatory. Both can be performed with interactive electronic dashboards with the use of advanced data visualization software that has now become integral to working in management accounting.
Exploratory data visualizations are used to explore data to find insights. These types of visualizations enable a better understanding of the underlying data. Visuals such as bar graphs, line graphs, and scatter plots are useful tools to identify changes over time, frequencies, and distributions.
Explanatory data visualization communicates the results of data analyses and occurs in phases to communicate with the data through effective visuals. Ultimately, explanatory visualizations should present findings and inspire action.
“Data visualization in management accounting is imperative to the overall decision-making process that will drive change and improve on traditional business practices,” said Jiles. “This SMA will help improve finance professionals’ understanding of how to better communicate data, influence decision making, establish best practices, and ultimately, drive change within organizations.”
To read the full report, visit https://www.imanet.org/insights-and-trends/the-future-of-management-accounting/data-visualization?ssopc=1.
