Charities: Fund Reporting from your Finance System

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Many charity finance professionals share a common problem. The ability to complete their annual accounts without resorting to the cumbersome task of manually analysing transactions offline in a spreadsheet.

Thankfully, this analysis is possible to obtain directly from your finance system but, in order to do so, it must have multiple reporting dimensions.

What is a Reporting Dimension?
Think of a reporting dimension as a set of rubber stamps. One set of stamps might relate to the fund that income and expenditure pertains too whilst another set might relate to the type of income or expenditure.

Each transaction entering the system is then stamped with the appropriate stamps relevant to each transaction. Reporting is then simply asking your finance system to bring back all the transactions relevant to one collection of stamps in the columns of your report and another set, in the rows.

Having multiple set of stamps (or multiple reporting dimensions) allows the user to slice and dice the in the many different ways required for SORP reporting.

Does my finance system has 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. The Chart of Accounts and Cost centre are both reporting dimensions.

Just because you are currently only using two reporting dimensions, doesn’t necessarily mean that others are not available to you. I would recommend you got in touch with your finance system provider to find out the options available.

How many reporting dimensions do I need?
This can vary depending on the size and structure of the charity but common ways that data needs to be analysed in the SORP are as follows;

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

That sounds like lots of different reporting dimensions. Does that mean I need to stamp each transactions many times?
Well to some extent yes, to get information out of a system, you must first put it in. That said the key to minimising the amount of input required is understanding the relationship between the different types of information that you are trying to capture. If there is a direct relationship between two types of data, it could potentially exist in one reporting dimension.

One example of this is fund and fund type. Each fund relates to one, and only one fund type, at any given time. As we are able to derive the fund type from the fund, you only need to specify the fund on each transaction to directly or indirectly report on the fund type.

*Direct reporting requires hierarchical reporting dimensions.

Where do I go from here?
Find out how many reporting dimensions you have access to in your current finance system and thinking about the different types of data you need to capture in your finance system. Also, consider any relationships between the different types of data you are looking to capture and whether they can exist in the same reporting dimension.

If you have any questions, feel free to get in touch at [email protected]

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About PeterHucker

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Peter Hucker is a Chartered Accountant, CA and member of the Institute of Chartered Accountants Scotland. 

As a Consultant, specialising in finance systems, Peter helps his clients unlock the benefits of modern cloud technology by increasing efficiency and providing enhanced oversight to their organisation.

 

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