How to Create Waterfall and Funnel Charts in PowerPoint

Waterfall and funnel charts serve specific storytelling purposes that other chart types can't match. Waterfalls show how a value builds or erodes through sequential steps. Funnels show progressive reduction through stages.

Waterfall Charts

What They Show

A waterfall chart starts with an initial value and shows how it increases and decreases through intermediate steps to arrive at a final total. Each bar "floats" at the level where the previous bar ended.

When to Use Waterfall Charts

• Revenue to profit bridges — Starting revenue, subtract costs, add other income, arrive at net profit
• Year-over-year variance — Last year's value, plus growth factors, minus headwinds, equals this year's value
• Budget analysis — Planned budget, actual spend by category, resulting surplus or deficit
• Inventory flow — Opening stock, additions, removals, closing stock

Designing Effective Waterfalls

Color coding:

• Green or blue for positive (increasing) bars
• Red or orange for negative (decreasing) bars
• Dark gray or navy for total bars (starting and ending values)

Connector lines: Thin lines connecting the end of one bar to the start of the next make the flow clear. Set these to 50% opacity so they don't dominate.

Data labels: Place values on or above each bar. Include a "+" or "−" sign on intermediate bars to reinforce direction.

Bar width: All bars should be the same width. The floating position and color do the storytelling — don't vary width.

Waterfall Best Practices

1. Order matters. Group related items together (all revenue items, then all cost items)
2. Summarize small items. If you have 15 cost categories, group the smallest into "Other"
3. Annotate the biggest movers. Call out the one or two bars that drive the most change
4. Show totals clearly. The starting and ending total bars should sit on the baseline and be visually distinct

Funnel Charts

What They Show

A funnel chart displays values that progressively decrease through sequential stages. The narrowing shape visually reinforces the reduction at each step.

When to Use Funnel Charts

• Sales pipeline — Leads → Qualified → Proposal → Negotiation → Closed
• Conversion funnels — Visitors → Sign-ups → Active users → Paying customers
• Recruitment — Applications → Phone screens → Interviews → Offers → Hires
• Content engagement — Views → Reads → Shares → Comments

Designing Effective Funnels

Proportional vs. fixed width: True funnels scale the width of each segment to the data value. Fixed-width funnels use equal bars with labels — simpler to read but less visually dramatic.

Color progression: Use a single color in progressively darker shades from top (lightest) to bottom (darkest). This draws the eye toward the final conversion.

Labels: Show both the absolute number and the conversion rate between stages:

• "Leads: 10,000"
• "→ 32% conversion"
• "Qualified: 3,200"

Orientation: Vertical funnels (wide at top, narrow at bottom) are the standard. Horizontal funnels work when you have long stage names.

Funnel Best Practices

1. Include conversion rates between each stage — they're often more important than the absolute numbers
2. 5–7 stages maximum. More than that and the funnel becomes a compressed bar chart
3. Highlight the biggest drop-off with a callout or contrasting color
4. Add benchmarks if you have industry or historical comparisons

Combining Waterfalls and Funnels

Some presentations benefit from both:

• Funnel first: Show the pipeline conversion stages
• Waterfall second: Show the revenue bridge from those conversions

This pairing works well for sales reviews and marketing performance decks.

Common Mistakes

Next: Treemaps and Hierarchy Charts