{"id":20937,"date":"2022-08-18T13:16:13","date_gmt":"2022-08-18T13:16:13","guid":{"rendered":"https:\/\/chartexpo.com\/blog\/?p=20937"},"modified":"2026-04-06T23:38:50","modified_gmt":"2026-04-06T18:38:50","slug":"funds-flow-diagram","status":"publish","type":"post","link":"https:\/\/chartexpo.com\/blog\/funds-flow-diagram","title":{"rendered":"How to Create a Funds Flow Diagram to Analyze Fund Flow?"},"content":{"rendered":"

You’ll agree it’s important for banking & payment professionals to understand the flow of funds (FoF).<\/p>\n

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Why?<\/em><\/p>\n

The flow of funds (FOF) diagram is critical in explaining your transaction and transaction flows. It shows the origination point, from where the money started its journey, and the route it took along the way to reach its destination, the termination point<\/em>.<\/p>\n

To visualize the flow of funds, you need a visualization design primarily designed for the task.<\/p>\n

This is where a Funds Flow Diagram (Sankey) comes into play.<\/em><\/p>\n

The visualization diagram can help you distill the flow of funds data into meaningful insights. And this can save you tons of hours, which you can use to relax or execute other tasks.<\/p>\n

We recommend charts that communicate insights, especially when creating data stories for the top management.<\/p>\n

Google Sheets is one of the go-to popular data visualization tools among professionals and business owners worldwide. The spreadsheet app does not natively support the Sankey Diagram. Yes, you read that right.<\/p>\n

We’re not implying you do away with Google Sheets. You can download and install a specific add-on in your spreadsheet to access a ready-to-use Funds Flow Diagram for your data stories.<\/p>\n

In this blog post, you’ll learn the following:<\/p>\n

Table of Content:<\/h3>\n
    \n
  1. What is a Funds Flow Diagram?<\/a><\/li>\n
  2. Video Tutorial: How to Create a Funds Flow Diagram<\/a><\/li>\n
  3. How to Analyze Data Using Funds Flow Diagram?<\/a><\/li>\n
  4. How to Create a Funds Flow Diagram in Google Sheets?<\/a><\/li>\n
  5. Video Tutorial: How to Create a Funds Flow Diagram in Google Sheets?<\/a><\/li>\n
  6. Importance of a Funds Flow Diagram<\/a><\/li>\n
  7. Wrap Up<\/a><\/li>\n<\/ol>\n

    Before diving right into the how-to guide, we’ll address the following question: What is a Funds Flow Diagram?<\/p>\n

    What is a Funds Flow Diagram?<\/h2>\n

    Definition<\/strong>: Fund flow highlights or shows the cash flow movement<\/a> in a financial system. It usually focuses on the examination of inflows and outflows of cash in a defined period.<\/p>\n

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    The metric doesn’t measure the performance of any asset. Let’s take the example of mutual funds in which fund flow considers the cash used in share purchases, or inflows, and the cash generated from share redemptions, or outflows.<\/p>\n

    The fund’s flow diagram doesn’t talk about how good or bad a fund performs.<\/p>\n

    Net inflow occurs if a business gets more inflow into the mutual fund than outflow. A net inflow produces extra cash for managers to invest.<\/p>\n

    You require a specific chart to create a compelling funds flow data story. Yes, a chart that can visualize flow without obscuring key insights.<\/p>\n

    This is where a Sankey Diagram comes in.<\/p>\n

    A flow diagram is a type of flow chart that shows the path and quantity of data at different stages in a cycle. In a Sankey Chart, the width of the streams reflects the amount of flow, showing how data moves and shifts as it progresses through various stages.<\/p>\n

    Now, imagine a Waterfall chart<\/a>\u00a0transformed into a Funds Flow Diagram. It becomes a captivating visual story, illustrating the journey of financial resources within an organization or project. It artfully depicts the inflow and outflow of funds over time or across various categories, akin to the cascading flow of water over a series of steps.<\/p>\n

    Funds Flow Diagram can display insights into the flow of money from the source to the intended destination. This chart draws the reader’s attention to the enormous flows, the largest consumer, the major losses<\/em>, and other insights. This diagram uses nodes and links to find relationships between important metrics.<\/p>\n

    The bigger the quantity of data under observation, the bigger the size of a node.<\/p>\n

    So, how can you analyze data using the Funds Flow Diagram?<\/p>\n

    Video Tutorial: How to Create a Funds Flow Diagram<\/h2>\n