If you’ve ever looked at a financial report or a sales dashboard and wondered, “How did they visualize this so clearly?”, chances are you saw a Waterfall or a Funnel chart.
These two charts are not just visually appealing — they are powerful tools for explaining change and progress.
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Excel offers several advanced charts designed for specific storytelling purposes. Among them, Waterfall and Funnel charts stand out because they help answer two very common business questions:
Let’s explore each one in detail.
A Waterfall Chart shows how a starting value is affected by a series of positive and negative changes, leading to a final result.
It’s commonly used for:
I personally started appreciating Waterfall charts the first time I had to explain why profit dropped despite good sales. Numbers alone confused people — the chart told the story instantly.
| Category | Amount |
|---|---|
| Opening Balance | 50000 |
| Sales Revenue | 20000 |
| Operating Expenses | -12000 |
| Marketing Cost | -5000 |
| Taxes | -3000 |
| Closing Balance | 50000 |
A Funnel Chart shows data values across stages of a process, where values decrease progressively.
Common use cases include:
In plain English — it shows where people, money, or opportunities drop off.
| Stage | Count |
|---|---|
| Website Visitors | 10000 |
| Leads Generated | 4500 |
| Qualified Leads | 2300 |
| Proposals Sent | 1200 |
| Deals Closed | 450 |
| Aspect | Waterfall Chart | Funnel Chart |
|---|---|---|
| Purpose | Shows cumulative changes | Shows progressive drop-offs |
| Best For | Financial analysis | Process or pipeline analysis |
| Data Direction | Positive and negative | Mostly decreasing |
| Visual Flow | Step-by-step impact | Top to bottom narrowing |
Although formulas aren’t mandatory, they often enhance accuracy:
=SUM(B2:B5) // Calculate totals before charting =B3-B2 // Calculate change between stages =IF(B2<0,"Loss","Gain")
Also consider using:
Waterfall and Funnel charts transform raw data into clear narratives. One explains how you arrived at a result, the other shows where you lost momentum.
If your goal is to communicate insights rather than just numbers, these two charts deserve a permanent spot in your Excel toolkit.
As always — don’t just read, open Excel and try it. That’s where the real learning happens.
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