Why “Seeing is Believing” in Financial Planning and Analysis: Lessons for Visual Financial Reports


In financial planning and analysis, the term “seeing is believing” holds a lot of weight. But why is that? As a CPA, you love numbers, and understanding them comes naturally. However, not everyone feels the same way. For many, numbers, math, and accounting can be confusing and overwhelming. That’s where Visual Financial Reports come in, and they are game-changers for both you and your clients.

By creating Visual Financial Reports, you are taking advantage of how the human brain naturally collects information. The connection between the human brain and the eyes is truly remarkable, and we can learn a lot from some fascinating studies. Let’s take a closer look.

Gregory’s Visual Assumption Theory teaches us that we form our perceptions by starting with the big picture. Our brains make their best guess of what we see based on context clues, beliefs, prior knowledge, expectations, and past experiences. In simpler terms, we make calculated assumptions. According to Gregory, we are most often correct in our beliefs. This theory’s lessons for Visual Financial Reports include using meaningful headlines to set expectations and being consistent from report to report to promote understanding.

In 2011, Thomas Sanocki and Noah Sulman conducted the Color Relations Experiment to test their theory that colors affect people’s ability to remember patterns. They tested people with four sets of color block trials, showing the participants both harmonious and contrasting patterns, each containing between 9-15 colors. When colors were harmonious, patterns were more easily remembered. Lessons for Visual Financial Reports from this study include reducing color contrast for more complex content, sticking with a harmonious color palette, and using high contrast between the background and visual.

Kevin Larson (Microsoft) and Rosalind Picard (MIT) conducted a study on typography’s influence on a reader’s cognitive ability and mood. The participants were divided into two groups; one group had a correctly typeset article, and the other with the same article but with an incorrect typeset. While the participants were reading the article, they were interrupted and asked how much time had passed since the experiment started. Both groups underestimated how much time had passed, and the correctly typeset group underestimated the time more significantly. This result shows that those reading the correctly typeset article were more engaged in their reading. Lessons for Visual Financial Reports from this study include always using easy-to-read font with the correct typeset, using whitespace to your advantage by leaving sufficient space between visuals, and never putting a visual in the middle of any text.

So, what does all of this mean for Financial Planning and Analysis? Now that you have a little more understanding of how the eyes and brain work together to collect visual information, it’s time to apply all these things to how you build financial reports. That’s where Reach Reporting comes in. We have already created templates with all of this information in mind. Your clients will be giddy with excitement over the newfound understanding your reports provide.

Creating Visual Financial Reports for your clients can be a game-changer. By taking advantage of how the human brain naturally collects information, you can make financial reports less intimidating and easier to understand. Reach Reporting can help you create visual financial reports that are both easy to read and engaging. Give us a follow on our social media accounts or schedule a demo to see our software in action.

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