How reporting dimensions can transform your nonprofit

How reporting dimensions can transform your nonprofit

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Regional Expert: Linda Persen  |   March 26, 2019

Regional Expert: Linda Persen  |   March 26 2019

Those working in nonprofit finance face a unique challenge: they must close periods and complete annual accounts, yet without swamping themselves in manual spreadsheeting.

Ask any nonprofit accountant. They’ll agree that while Excel isn’t ideal, it’s almost impossible to avoid. With few exceptions, even ERP software requires a degree of Excel dependency.

However, recent years have seen broad shifts in business software. Mere decades ago, technologies like VR and OCR belonged in science fiction.

This prompts a question: Do nonprofits yet have an alternative to manual Excel manipulation?

The short answer is yes: Nonprofits can now perform highly automated spreadsheet-style analysis within their ERP systems. But only if their ERP software supports multiple reporting dimensions.

What is a reporting dimension?

Think of reporting dimensions as stamps. One stamp might indicate the fund corresponding to a particular transaction, while another might signal its type. A dimension-enabled ERP solution will mark each transaction with the appropriate stamps.

This drastically simplifies reporting. Merely select one set of stamps for columns and another for rows. The right software will generate the report according to your specifications.

Having multiple sets of stamps (or multiple reporting dimensions) allows you to slice and dice the in the many different ways required for financial analysis and reporting.

Does my finance system have multiple reporting dimensions?

Every finance system has at least one reporting dimension and many have two (although we don’t necessarily think of them as such: Chart of Accounts and Cost Center are both reporting dimensions).

However, very few applications provide you with more.

So how many reporting dimensions do I need?

The answer varies depending on the size and structure of your nonprofit. However, some dimensions have value for most organizations: following dimensions, among others:

  • Income/Expenditure Type (e.g. donations and legacies, charitable activities)
  • Fund
  • Fund Type
  • Activity/Project
  • Support Costs

Do I need to use all of those stamps with each transaction?

In a sense, yes. You cannot retrieve information you did not put in. That said, you can minimize effort by understanding the relationship between different types of information. If you see a direct relationship* between two types of data, you could address both in one dimension.

Take an example: fund and fund type. Each fund relates to one, and only one, fund type, at any given time. Because you can derive the fund type from the fund, you only need to specify the fund in order to directly or indirectly report on the fund type.

*Direct reporting requires hierarchical reporting dimensions.

Where do I go from here?

Here’s what I would suggest: Start by thinking about the different types of data you need to capture in your ERP solution. Identify relationships among the different types of data you need. Then, find out if your current ERP solution can support them.

If not, then I would invite you to consider Xledger. Our true-cloud solution equips you with 17 distinct reporting ‘stamps’ that you can define as needed. Manipulate and visualize data with market-leading BI tools, including tailored dashboards, configurable reporting, and multi-dimensional flex screens. Drill-down to underlying documentation. Drill-through multiple views for 360° understanding. 

To learn more about Xledger, the most automated ERP solution on the market, contact us for a product demonstration tailored to your needs.

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