Automated Reporting in Finance: Benefits, Tools & Best Practices

Is your nonprofit finance team struggling with time-consuming manual reporting, accuracy issues, and limited visibility into financial data? It's frustrating. 

Fortunately, with automated reporting in finance, you can ditch these problems and enjoy improved speed, accuracy, consistency, and strategic decision-making. 

You can also enjoy improved compliance with government and donor regulations, financial transparency, and real-time insights for your board and funders. 

If you are looking for the best software to automate financial reporting, Martus is here to help. You can use it to produce customizable reports automatically, without relying on complex formulas or IT to pull data. 

Request a personalized demo today to discover the power of automated financial reporting with Martus. 

Key Differences Between Traditional and Automated Reporting in Finance

Traditional financial reporting relies on outdated spreadsheets and manual workflows, which involve manual data entry, calculations, and report generation. 

Automated reporting uses software to streamline these processes. Let’s discuss the main differences between the two systems in detail:

1. Reporting

Using spreadsheets and manual workflows exposes the process to the risk of human error, which can lead to inaccurate and inconsistent reports. 

The finance team may also struggle with limited visibility because the data may not be up-to-date, since it requires manual processing. 

On the other hand, automated reporting lets you produce accurate and consistent reports. Financial management software can automatically retrieve data from various sources, perform calculations, and provide up-to-date financial information in real-time. 

2. Audit Trails 

Audit trails are often incomplete, inconsistent, and prone to human error in traditional reporting.

They involve manually logging entries, tracking changes in spreadsheets, and attaching support documents. 

All these can be difficult and time-consuming, leading to poor audit readiness. 

Automated systems create comprehensive audit trails by systematically logging every activity. They also provide a clear and traceable history of every event, including who made a change, when they made it, and what the original value was. 

3. Month-End Processes

Traditional financial month-end tasks consume a significant amount of time, involving consolidating spreadsheets, manual data entry, and cross-checking figures from multiple sources. 

It can lead to delays in financial visibility and decision-making. 

Automated reporting makes these tasks smoother using integrated systems that pull data in real-time from your usual nonprofit accounting software, expense management platforms, and funder databases. 

Automation minimizes errors, increases accuracy, and speeds up the monthly closing process, helping your team focus more on financial analysis rather than data preparation. 

Automated systems also make your reporting more reliable, as they provide timely and complete reports with real-time, data-driven insights. 

Core Benefits of Financial Reporting Automation

When you take the modern route, you can enjoy the following benefits of automated reporting:

• Time Saved on Manual Tasks: Financial reporting automation eliminates the need for manual tasks. According to PwC, digitizing and automating financial processes can save up to 40% of your staff's time, allowing them to focus on more strategic activities, such as financial analysis and forecasting. 

• Faster Month-End Closing: Eliminating manual activities, improving accuracy, and providing real-time visibility into financial data helps speed up closing at the end of the month. An automated reporting system can detect errors and inconsistencies as they occur, allowing for prompt correction and preventing issues from accumulating. It can also improve audit trails, ensuring you are always ready for audits. 

• Real-Time Decision-Making for Leadership and the Board: Access to real-time financial information and timely insights helps your top leaders and the board make informed decisions quickly. They can see the organization’s financial health and performance, making it easy to decide future fund allocation based on your mission and overall financial strategy. 

• Fewer Compliance Errors: You can streamline compliance by automating audit trails, protecting sensitive data, and reducing human error. By relying on approved nonprofit accounting procedures and reliable automated financial statements, you enhance transparency and improve audit readiness. Funders are more confident and are more likely to continue supporting your cause. 

Best Automated Financial Reporting Software

To free your team from slow and time-consuming traditional reporting and enjoy the benefits of report automation, you'll need the right software.

Consider these three options for the best results:

1. Martus

Martus is a purpose-built nonprofit financial management platform that supports improved reporting through:

• Real-Time Dashboards: Martus Reporting provides seamless integrations with your accounting software, which allows for interactive and up-to-date dashboards, customizable reports, and flexible multi-program views. The system includes monthly and multi-year comparisons with budget-to-actuals reporting, which are ideal for grant tracking.

• Role-Based Access: With Martus, you can limit which users can access certain information. You can control access at the function and dimension level or restrict access to certain accounts. These measures protect your organization’s data across different programs, including sensitive funder information, for peace of mind. 

• Dimensional Reporting: Martus enables you to classify transactions and data using multiple dimensions or categories that extend beyond the nonprofit chart of accounts. You can get reports on programs, funding sources, locations, and even funder demographics. This granular fund tracking shows which programs are most impactful and which funding sources are the most effective. 

• Compliance Support: Martus helps you ensure compliance with both funder and IRS regulations for nonprofits. By integrating with your accounting system, Martus upholds GAAP for IRS-compliant financial management and reporting. Our fund tracking capabilities help you account for restricted and unrestricted funds, ensuring you also comply with donor and grantor regulations. 

With Martus, you'll get an upgrade from traditional tools like Google Sheets and Excel, which are time-consuming, difficult to scale, error-prone, and lack specialized features. 

Reach out to our team today to start the journey to automated financial reporting. 

2. Sage Intacct

Sage Intacct excels in handling complex financial reporting and grant management, particularly for larger organisations with intricate grant funding that necessitates robust fund accounting capabilities. 

You can use Sage Intacct to enjoy customizable reporting, real-time dashboards, and integration functionality with Martus for advanced automated reporting. 

3. NetSuite

NetSuite offers reporting solutions with automated workflows and real-time data. These are supported by fund accounting, grant management, and financial analytics. 

As a comprehensive ERP solution that integrates with Martus, NetSuite offers real-time access to financial information, role-based dashboards, and customizable, audit-ready reports based on various dimensions. 

How to Get Started with Financial Reporting Automation

Setting up automated financial reporting for your nonprofit doesn't have to be difficult. You can get started with this roadmap:

1. Evaluate Current Processes and Pain Points: Analyze your current reporting processes, identify shortcomings, and understand where automation can benefit you the most. Determine who needs to access your financial information and the level of detail and access they require. 
2. Choose the Right Tool: Research and evaluate nonprofit-focused financial management software that can integrate with your accounting tool and offer customizable dashboards, automated report creation, and real-time data visibility. Other factors to consider include scalability, ease of use, implementation speed, and automated regulatory compliance. 
3. Migrate Data Securely: Sync the software you choose with your accounting tool to import data automatically and securely. With Martus, you can complete the configuration and load your data immediately and securely, thanks to our intuitive and easy-to-use software. We also ensure your data is safe through SOC 2 Type 2 compliance and Martus App Security. 
4. Train Your Teams: You'll need to train your financial and non-financial staff not only to use the software but also on how to automate reporting workflows and why it's important.

At Martus Solutions, we offer a train-the-trainer approach, with several one-on-one sessions and suggested reading resources for each session. We also offer personalized end-user training at an added cost, which you can request at any time through our customer service. 

Remember: Automated reporting isn't just for large organizations. Even small nonprofits can benefit through increased accuracy and transparency, time savings, and better decisions. 

Common Mistakes to Avoid in Automated Financial Reporting

When it comes to nonprofit finance reporting, you must get it right all the time to secure donor confidence, ongoing funding, and mission alignment. 

You'll want to avoid mistakes such as:

• Picking Software That Isn’t Nonprofit-Specific: Financial reporting software that's not specifically made for nonprofits will be limited and lack capabilities like fund tracking, grant reporting, and compliance support. Select tools designed specifically for nonprofits, featuring easy-to-use collaborative financial tools that facilitate automation, advanced reporting, and real-time visibility and insights. 

• Not Setting User Roles and Permissions: Granting all staff full access to the software can lead to accidental edits in critical data within approved worksheets. You must define clear, user-based roles and grant access only to the necessary modules to protect sensitive information and maintain a traceable audit trail. 

• Failing to Maintain Data Integrity: Automating reporting without cleaning historical data can result in inconsistent outputs and poorly informed stakeholders. Review your data regularly and clean it up before and after automation. 

Best Practices for Successful Implementation

Selecting the best software isn't enough to succeed at automated reporting. Follow these financial reporting best practices to implement the system successfully:

• Assign a Project Owner: Whether your team is large or small, appoint a specific person to own the implementation process. Put them in charge of overseeing activities such as integrating software with your accounting tool and other platforms, migrating data, and training the rest of the staff. 

• Test Reports Before Rolling Them Out: It's advisable to test-run reports before you share them with the relevant stakeholders. You'll want to check for accuracy, consistency, and that the report covers essential areas like revenue analysis and budget performance. 

• Involve Cross-Functional Staff for Easier Adoption: You'll need all your staff to own the new system. Their input ensures the system addresses real-world problems across different departments, making staff more likely to support and adopt it. 

Note: Conducting change management is necessary when implementing the new system. Most staff members are used to spreadsheets and may be sceptical about new software and automated reporting. 

Assemble a change management team to drive the shift and provide support to all the team members impacted by the process. 

Frequently Asked Questions (FAQs)

Let's end the discussion with answers to questions nonprofit leaders often ask about automated reporting in finance:

How Secure Is Automated Financial Reporting?

While automated financial reporting introduces potential risks, it is highly secure because of robust measures such as access controls, encryption, regular audits, audit trails, and regular backups. 

At Martus Solutions, we secure your data with Certified Martus App Security and SOC 2 Compliance against unauthorized access, breaches, and other threats. 

What Industries Use Automated Financial Reporting the Most?

Automated financial reporting is a significant component in both for-profit businesses and not-for-profit organizations. The practice is common in financial firms, retail, manufacturing, healthcare, government, and professional services. 

In the nonprofit industry, it is common in community coalitions, political advocacy groups, government groups, civic and social organizations, and foundations. 

How Often Should Automated Reports Be Reviewed?

You can review automated reports on a weekly, monthly, or quarterly basis, depending on your needs, the complexity of the data, and the purpose of the reports. 

Weekly reviews help identify recurring issues and make agile strategy adjustments. Monthly and quarterly ones are ideal for more comprehensive analysis, identifying longer-term trends, and long-term decision-making. 

Can You Integrate Automated Reporting with Excel or Google Sheets?

You can integrate automated reporting with Power Automate in Excel or Google Apps Script in Google Sheets. 

However, you will outgrow the spreadsheets when your organization grows bigger, leading to scaling problems. Customizing reports, reducing human error, streamlining calculations, and generating reports can become difficult. 

Conclusion

Using automated reporting in finance reduces compliance and security risks, improves financial transparency, and helps you make smarter decisions. 

Particularly, nonprofit-specific financial management software and accounting tools can help you streamline your reporting procedures. 

With Martus, you can generate board-ready reports without the stress of complex calculations or creating custom reports from scratch. 

You get compliant reports covering all the key nonprofit finance areas, including actionable insights for strategic decision-making. 

Streamline your financial reporting with Martus now.