How to Create Easy to
Understand Financial Graphs
Financial graphs have long been a staple of any business presentation, but a common gripe among people is that they’re rarely ever done well. Not well enough to make them digestible to the everyday layman, that is. And as with anything with graphs, they’re an exercise in the subtle balance between data visualization and design, and it takes a bit of practice and experience to ensure that the graphs one creates are clean, easy to understand, and manageable.
While there are lots of online tools out there with integrated graph makers that can help with the overall design aspect of it, it’s still important to pay special attention to the little visual cues that a graph has. Ask yourself, what details can I modify to make my graph stand out without making it too visually noisy?
Here’s a guide on how to do that. But first:
Why Do Data Analysis Graphs Matter?
Today’s digital age has made access to data incredibly easy, and many businesses have used that to their advantage. Data-backed decision-making has been the hot trend as of late, and while that’s a great strategy, it can be hard to implement if people can’t make sense of the data itself due to poor presentation.
That rings true for finances especially, as it’s the lifeblood of any business. Monitoring and subsequently managing it requires careful deliberation and accuracy, something that cannot be achieved if the data isn’t presentable.
That’s where data visualization comes in.
Defined as the visual and graphical representation of data, it’s the best tool for communicating complex financial data into something manageable so that people can deliver the level of insight required for an efficient workspace.
Analyze Graphs Easier with Good Design
Data visualization, much like any good design, is all about clarity and communication. The best rule of thumb is to keep things simple and informative, then build up from that point onwards.
There are some rules universal to graph designs you can follow to ensure yours looks good. For example:
Arrange your data logically: This follows a basic rule in communication, and that is to keep things simple. So, it stands that the best way to present your data is in an easy-to-follow way, without scattering important data points away from each other. In fact, it’s best to group or stack related information. This makes it less cumbersome to analyze changes and trends in your finances so you can make sound decisions off of that.
Use colors and fonts to your advantage: Depending on whom you’re reporting, it may make sense to use decals that may be considered special. But always ensure that it’s in line with what your audience expects, and do your best to keep things clean, especially since this is for finances. Font-wise, it’s often better to use sans-serif fonts. Those are the kinds without fancy lines or tapers on them. As for colors, keep things consistently varied in that you only use a limited palette that only highlights important data points.
Don’t use 3-D graphics: A strange, forgone trend that is best laid to rest. No one likes 3-D graphics anymore, and it’s best to steer clear of them even if there are a lot of templates for them still available.
Remove unnecessary details: Elements that often come with graph templates, like background grid lines or extra labels, can add to the visual clutter you don’t need. Remove them, and in place, ensure that you have other essentials in their stead, like your financial graph’s title, source line, and legend.
Last but not least, make sure you’re using the right type of graph or chart for your finances.
Graph Analysis Done Right
No design in the world can compensate for a misrepresented set of data, so it’s important that you pick the one that’s most appropriate for displaying your information. Remember: focus is key to foster understanding in your audience.
To help with that, here’s a quick breakdown of the most common charts used for presenting financial data:
Line chart: This is ideal for showing a series of data that has changed over a set period of time and is a simple and effective way of showcasing trends or volatilities within your data.
Tables: One of the oldest ways of showcasing data, tables are a great way to display an array of raw information in a more easily digestible way. It’s best used when you have a large number of data points that need to have their grand total to support it. It’s also good as a dashboard for people to use to filter data as needed.
Gauge chart: This is for when a quick visualization is needed for a single, quantitative metric. Composed of color-coded segments and a needle, it’s most effective when tracking or emphasizing insights from your data.
Progress chart: These come in charts that represent percentages of a whole, such as a bar or pie charts. Appropriate for tracking progress and the like.
At the end of the day, though, the root of creating easy-to-understand financial graphs lies in how well you display your data, other elements notwithstanding. If it can encourage discussion, then it’s done its job. Happy designing!
