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Jun 13
0

The Art of Accounting Storytelling: Use Storytelling Techniques for Effective Presentations

By | Accounting, Accounting Software, Nonprofit, Uncategorized | No Comments
Person giving accounting presentation via a large computer monitor, Accounting Storytelling

Once upon a time …

Your mind probably raced back to childhood at that phrase, to many pleasant memories of adults reading stories to you. The human mind is hardwired to listen to stories, and our brains naturally gravitate toward the time-tested framework of a story: a beginning, middle, and end; a hero on a quest; a villain who tried to stop the hero; and the wise guide who helps the hero overcome the challenges.

Financial professionals may think that storytelling techniques are for sales, marketing, and donor relations, but they also offer a rich framework with which to share information so that it is understood and remembered. Let’s examine the art of storytelling and how accountants can leverage this method for better communications.

Why Use a Story Framework for Financial Presentations?

Every accountant or financial professional must present numbers. Whether it’s presentation budgets to stakeholders or reviewing the annual report with the board, at some point this year you will be asked to present to a group.

Part of the art of presenting wisely is engaging the audience’s attention. Accountants may face a significant challenge when presenting numbers because not everyone in the group understands basic accounting concepts. To have your point understood and remembered, you may need to use creative methods to share information. This is where storytelling techniques come into play.

Everyone has heard stories. We watch movies and television shows, we read books and see plays. We know the framework of a good story. It is burned into our subconscious mind through thousands of repetitions over the course of a lifetime. Tapping into this framework to share financial information helps engage your audience and share information in ways they can easily grasp.

Accounting Storytelling Framework

So just how can you use a storytelling framework for your numbers-based presentation? Think of the hero’s journey. Every hero starts off on a quest. Luke Skywalker set out to return R2D2 and the Death Star plans to the Rebels to thwart Darth Vader and the evil empire. That was his quest and the hero’s journey unfolded in two hours of adventure that has kept audience spellbound for decades.

Now you may not be a Jedi knight, but you are the ninja of accounting, so let’s apply this framework to a common scenario: presenting budgets to stakeholders. In your accounting story, you must first explain the challenges from the audience’s perspective. You must see the information through their eyes and focus on what is important and memorable to them.

What information are you sharing with them? What is the story behind the numbers? Focus on the narrative flow around the data. What is the high-level takeaway, and what is the story inherent in the information?

Good stories paint visual pictures in the mind of the audience. You can do this with your data by using data visualizations such as graphs and charts. The old saying that a picture is worth a thousand words is true when it comes to presenting accounting or financial data.

Using Your Accounting Software to Craft a Compelling Story

The right accounting software plays an important role transforming basic data into stories through data visualizations. Does your software help you create various charts, graphs, and other visualizations for compelling presentations, or do you spend hours exporting data into spreadsheets and crafting visuals from imported data?

If the latter describes a typical scenario, it’s time to consider updating your software. Newer government accounting software and nonprofit accounting software provides robust data visualizations. It can really make a significant difference not only in how you present but in the impact your presentation has on the audience.

Using storytelling techniques to share financial information may seem far-fetched, but it’s a time-tested method for helping audiences engage and connect with information. Try it and become the hero of your finance team

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.

Jun 14
0

2022 Updates to GAAP Standards

By | Accounting, FASB, Nonprofit, Uncategorized | No Comments

person using calculator at desk with spreadsheetsWe typically report on changes to GAAP standards as they arise. This year has been a particularly active one with numerous changes impacting leases, gifts in kind, reference rate reform, and costs associated with cloud computing. Below are the highlights; for specifics, see the linked information.

Topic 842: Lease Standards

FASB 842

Although the standard was presented six years ago, it must now be fully implemented for all entities reporting on a GAAP basis for calendar year 2022 and fiscal years ending in 2023. The accounting standards for lessors has not changed. However, there are several changes for lessees which must be included on the balance sheet.

Lessees’ commitments and rights can now be recognized on the balance sheet as a liability for the total payments made throughout the term of the lease. The “right to use” the asset can also be recognized as a liability on the balance sheet.

Lease classifications have also changed. Instead of operating and capital leases, they are now to be classified as operating or financing.

Topic 958: Gifts-In-Kind

Update 2020-07

Effective for all entities for calendar year 2022, reporting after June 15, 2021, there are changes to reporting gifts-in-kind (GIK). The standard to determine whether something is a gift hasn’t changed, but the reporting requirements have been updated.

You will need to disclose specific information for each category:

  • Your organization’s policy for gifts-in-kind.
  • Potential donor-imposed restrictions on GIK.
  • How you arrived at the value determination and fair market value.
  • Whether GIK was monetized or utilized.

For more information, please read: An Overview of Gifts—In-Kind

Reference Rate Reform

Topic 848

ASU 2020-04

LIBOR, or the London Inter-Bank Offer Rate, has been the norm since the 1980s as a reference rate for interest. Now, however, it is being retired as a point of reference. This change is effective March 2022 through December 2022 and impacts many loans, leases, and derivatives.

The current GAAP requirement is that entities analyze whether a change in interest rate for a loan is a debt modification or debt extinguishment. This is time-consuming and can be quite complicated. Refer to ASU 2020-04 for helpful tips to make the transition easier and smoother.

Cost Associated with Cloud Computing

ASU 2018-15 Subtopic 350-40

This change is effective for nonpublic entities for the calendar year 2021 and fiscal years ending in 2022. Entities may choose to apply it either prospectively or retrospectively.

Cloud computing software is used on a licensing arrangement. Either the license is a subscription or a license. Licenses are usually recorded as an intangible asset for the software license and a liability for remaining payments due. For subscription-based cloud software, it is expensed as incurred.

For more information on this topic, read: New FASB Cloud Computing Standard Reduces Complexity.

Need Help Navigating GAAP Changes?

If you’d like some assistance navigating these GAAP changes, we’re here to help. We can also assist you with choosing the right nonprofit software to make accounting, including following accepted best practices, and implementing changes to your general ledger and overall accounting software.

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Oct 14
0

Turning Raw Data Into Engaging Stories: Data Visualizations

By | Data, Nonprofit, Uncategorized | No Comments

Nonprofits often struggle to engage donors and constituents in their work. Often, their work, whether it is in the arts, human services, healthcare, humane societies, or education, remains hidden.

But the more work remains hidden from the public, the less interest and engagement a nonprofit will experience. Raw facts and figures aren’t interesting. People have trouble understanding and interpreting data. Although sites like Charity Navigator do a good job of providing basic metrics, they fail to put a face or a name to the work done by each nonprofit.

That’s where data visualization comes into play. The data your organization collects can be a powerful ally in your quest to reach more constituents, deliver programs and services, and engage donors.

What Is Data Visualization?

Data visualization uses information (data) and transforms it into charts, graphs, and other pictorial representations (visualization).

People tend to have a very hard time putting data into context. A list of years and the number of people who contract a disease vs. those who die from it lacks context. Change that list into a picture, and it’s easier to imagine that 1 out of every 5 people will die from cancer in a given year.

How Does Data Visualization Work?

Many organizations add business intelligence, or BI software, to their basic accounting systems to add data visualization capacities to their overall system. This helps them:

  1. Prepare better annual reports by including robust charts and graphs
  2. Engage the media in your work by sharing story-based graphics reporters can use
  3. Publish visualizations to their website and donor sites, adding information in a format easily understood by constituents
  4. Apply for grants with clearer and better information

A Tale of Tails: Data Visualization in Action

The Best Friends Society seeks to transform shelters into no-kill shelters, or shelters where animals are not humanely euthanized but kept at the shelter until adopted. The organization had collected data from 2015 on the state of animal adoptions nationwide but needed a way to publish it so that visitors to their site and people interested in their work could understand the urgent need to save more companion animals.

The organization responded to the challenge by investing in data analytics and business intelligence that transformed raw data into engaging, responsive graphics on their website. The resulting data visualizations may be seen on many pages on their site, for example, such as the interactive map of the United States that responds to changing demographics as the dataset is updated in the background.

According to Michael Kabella, interim CIO of Best Friends/Save Them All, in a streaming interview entitled Making Data Actionable: How Best Friends Animal Society Scaled Innovation on Behalf of 6M Furry Friends “ … the new dataset, being able to interact with it in new ways, allowed our mission, advancement, and programming teams, to really make informed, strategic, and tactical decisions that often, in the past, might have been driven by an intuition.”

He also relayed positive responses and benefits from sharing the new data visualizations with supporters and donors. “We also found out that our supporters and donors really responded positively to the visuals. It gave them an ability to identify with the information in a way that previously they hadn’t been able to with a spreadsheet of data. Because of that, we saw an impact on life saving and on donations.”

Cloud-based software is rapidly making robust nonprofit accounting software more affordable. It’s also easier to add on business intelligence and data visualization tools than ever before. Considering that nonprofits like Best Friends/Save Them All believe that adding this software made a big difference on saving the lives of companion animals, it may be worthwhile investigating it for your organization.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at (206) 605-3113 for more information.