How to Make a Waterfall Chart in Google Sheets

A waterfall chart is one of the most effective ways to tell the story behind your data, explaining exactly how a starting value is affected by a series of positive and negative changes. While it may look complex, creating a professional-looking waterfall chart in Google Sheets is surprisingly straightforward once you know how to structure your data. This tutorial will walk you through preparing your data, building the chart step-by-step, and customizing it for your reports.

What is a Waterfall Chart?

Often called a bridge chart, a waterfall chart visualizes a running total as values are incrementally added or subtracted. It’s perfect for showing the cumulative effect of a sequence of events or categories. Think of it as a financial or operational narrative in visual form, showing you why you ended up with the final number.

For example, imagine explaining your bank account balance over a month:

• You start with an initial balance.
• Your paycheck is added (a positive change).
• Rent is paid (a negative change).
• You spend on groceries (another negative change).
• You get a small refund (a small positive change).
• You end with a final balance.

A waterfall chart illustrates this entire journey, with "floating" bars representing each transaction and solid bars bookending the chart to show the start and end totals. The main components are the initial value, the intermediate positive changes (increases), the intermediate negative changes (decreases), and the final total value.

Businesses use them constantly to analyze profit and loss statements, track inventory movement from a starting point, visualize sales pipeline changes, or show how an initial budget was spent.

Why Use a Waterfall Chart?

Waterfall charts transform a static list of numbers into a dynamic story. Their power lies not just in showing a final result, but in breaking down the journey to get there. They provide clarity that other charts often miss.

• They Clearly Show Positive and Negative Contributions: The up-and-down flow, often color-coded with green for gains and red for losses, makes it immediately obvious which factors helped and which hurt your final result. This is far more intuitive than scanning a column of positive and negative numbers.
• They Highlight the Magnitude of Changes: At a glance, you can see which specific category had the biggest impact, positive or negative. The length of each floating bar tells the story of its influence, allowing you to quickly spot major drivers of change without having to think too hard.
• They Explain the "Why" Behind a Number: Instead of just reporting that sales decreased by $5,000, a waterfall chart can show that while revenue from one product line grew, another dipped significantly, and returns increased, leading to the overall decrease. It connects the dots to provide a much richer context.

Preparing Your Data for a Waterfall Chart

The key to creating an effective waterfall chart in Google Sheets lies in how you structure your data. It needs a specific format so the charting engine can correctly interpret your starting points, changes, and ending totals. Let’s use a simple example of tracking a small business's monthly cash flow to demonstrate.

You’ll need two columns:

1. A Category column with labels for each phase or change.
2. A Value column with the corresponding financial amount for each category.

Here’s how to set up your table. For our example, we want to visualize the flow from our starting cash balance to our ending cash balance for the month.

Your raw data might look like this:

• Starting Cash on Jan 1st: $10,000
• January Sales Revenue: +$8,500
• Product Refunds: -$1,200
• Ad Campaign Spend: -$2,000
• Payroll & Contractor Fees: -$4,000
• Ending Cash on Jan 31st: $11,300

Here's how to structure it in Google Sheets for a waterfall chart. Notice that the starting and ending values are listed as simple positive numbers, while the intermediate changes are positive for increases and negative for decreases.

Column A (Category)

• Starting Cash
• Sales Revenue
• Refunds
• Ad Spend
• Payroll & Fees
• Ending Cash

Column B (Value)

• 10000
• 8500
• -1200
• -2000
• -4000
• 11300

Your final, ending value (in this case, $11,300) should be the calculated sum of all the previous values. You can either calculate this manually and type it in or use a SUM formula in the cell. The important part is that this "end" figure exists as its own row in your dataset.

Step-by-Step Guide: How to Make a Waterfall Chart

Once your data is neatly arranged in two columns, you’re just a few clicks away from your chart. Follow these steps carefully, especially when designating your totals.

Step 1: Select Your Data

Click and drag your mouse to highlight the entire data set you just prepared, including both the column headers ("Category" and "Value") and all the data rows.

Step 2: Insert the Chart

With your data highlighted, go to the top menu and click Insert > Chart. Google Sheets will insert a default chart type, which will likely be a column chart or something similar. Don't worry, we're about to change that.

Step 3: Choose the Waterfall Chart Type

A "Chart editor" sidebar will appear on the right side of your screen. In the very first dropdown under the Setup tab, labelled "Chart type," click to open the list of options. Scroll down to the section titled "Other" and select the Waterfall chart.

Your chart will immediately transform into a waterfall format, but it won’t be quite right yet. The "Starting Cash" and "Ending Cash" bars will be floating just like the others. We need to ground them.

Step 4: Designate the Totals (The Most Important Step!)

This is where you tell Google Sheets which bars should be totals (or sub-totals) that start from the baseline axis instead of floating.

In the Chart editor sidebar, click on the Customize tab.

1. Expand the Series section.
2. Look for the subsection labelled Subtotals. Tick the checkbox that says "Use first value as a subtotal." You'll see your first bar ("Starting Cash") immediately drop down to the baseline, which is exactly what we want.
3. Now, to set the last bar as the final total, click the button that says "(+) ADD A SUBTOTAL."
4. In the menu that appears, click "Add a column number."
5. You need to enter the position of your final total in the data range. In our example table, "Ending Cash" is the 6th row of data. So, you would type 6 into the input box. Once you do, the "Ending Cash" bar will also drop to the baseline.

Your waterfall chart should now be functionally complete, showing a clear visual bridge from your starting total to your ending total.

Step 5: Customize and Refine Your Chart

Now for the finishing touches. A clean, well-labeled chart is much easier for your audience to understand.

• Chart Title: In the Chart editor, go to Customize > Chart & axis titles. Give your chart a descriptive name like "Monthly Cash Flow Analysis - January."
• Bar Colors: Under Customize > Series > Formatting, you can change the default colors. It’s standard practice to set the color for "Declining bars" to red and "Advancing bars" to green. You can also set a distinct color for the subtotal bars (like blue or grey) to make them stand out.
• Connector Lines: Also under the Series section, you'll see a checkbox for "Show connector lines." Keeping this checked adds thin grey lines connecting the bars, making the flow easier to follow.
• Data Labels: To show the exact value for each bar, check the "Data labels" checkbox in the Series section. You can customize their font, size, and position for better readability.

Common Use Cases for Waterfall Charts

To see how versatile this chart type can be, here are a few more real-world examples.

Use Case 1: Analyzing Profit and Loss (P&L)

Visualize the walk-down from total sales revenue to net profit, showing the impact of various expenses along the way.

• Category: Sales Revenue, COGS, Gross Profit, Marketing, Salaries, Rent, Utilities, Net Profit.
• This chart would have two sub-totals (Gross Profit and Net Profit) to show critical milestones in financial performance.

Use Case 2: Explaining Employee Headcount Changes

Show how a company's headcount evolved over a quarter or a year.

• Category: Q1 Headcount, New Hires, Departures (Voluntary), Terminations (Involuntary), Q2 Headcount.
• This effectively illustrates the key drivers of workforce change - hiring, retention, and churn.

Use Case 3: Visualizing Your Sales Funnel

Track how leads progress through your sales pipeline over a specific period.

• Category: Leads at Start of Month, New Leads Generated, Leads Disqualified, Leads Converted to Opportunities, Deals Won, Deals Lost, Leads at End of Month.
• This provides a powerful view of pipeline velocity and conversion efficiency.

Final Thoughts

Waterfall charts are a fantastic asset for any report, turning a simple spreadsheet into a compelling narrative of how and why your numbers changed. By structuring your data correctly and following a few simple steps in Google Sheets' chart editor, you can clearly communicate the story behind the figures.

Creating visualizations like this is an excellent way to find insights, but the manual process of pulling data and structuring it in a spreadsheet can get repetitive, especially when combining information from multiple platforms. At Graphed, we automate that process entirely. You can connect your marketing and sales tools like Google Analytics, Shopify, and ad platforms in seconds, then simply ask for the chart you want in plain English. This eliminates the tedious spreadsheet work, letting you move straight from data to decision without getting lost in the setup.