What is a Automated Narrative for Nonprofit Financial Statements?

Financial statements with automated narratives are considered modern analysis tools and are used by Board members, CFOs as well as other users and accountants to get an always concise, up-to-date and easy-to-read financial status. Some of the key functionality in this type of combined financial and narrative report is that it typically provides two pages (see tabs at bottom of the image). The first page is an automatically generated narrative that pulls the most essential metrics from the second page, which is an ordinary financial report. You find an example of this type of combined financial and narrative below.

Purpose of Auto-narrative Reports

Nonprofits and associations use Auto-narrative Reports to provide highly user-friendly financial updates to managers outside of the accounting department. When used as part of good business practices in a Financial Planning & Analysis (FP&A) department, an organization can improve its financial literacy and manager engagement as well as reduce the chances that few people outside of accounting follow and comments on financial performance.

Auto-narrative Report Example

Here is an example of an Automated Narrative Report for a Nonprofit Financial Statement.

Example of an Automated Narrative for a Nonprofit Financial Statement

Example of an Automated Narrative for a Nonprofit Financial Statement

You can find hundreds of additional examples here

Who Uses This Type of Combined financial and narrative?

The typical users of this type of combined financial and narrative are: Executives, department heads, board members.

Other Combined financial and narratives Often Used in Conjunction with Auto-narrative Reports

Progressive Financial Planning & Analysis (FP&A) departments sometimes use several different Auto-narrative Reports, along with balance sheets, statement of activities, statement of cash flows, financial dashboards and other management and control tools.

Where Does the Data for Analysis Originate From?

The Actual (historical transactions) data for competitors typically comes from enterprise resource planning (ERP) systems like: Microsoft Dynamics 365 (D365) Finance, Microsoft Dynamics 365 Business Central (D365 BC), Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP, Microsoft Dynamics SL, Sage Intacct, Sage 100, Sage 300, Sage 500, Sage X3, SAP Business One, SAP ByDesign, Acumatica, Netsuite and others.

In analyses where budgets or forecasts are used, the planning data most often originates from in-house Excel spreadsheet models or from professional corporate performance management (CPM/EPM) solutions.

What Tools are Typically used for Reporting, Planning and Dashboards?

Examples of business software used with the data and ERPs mentioned above are:

  • Native ERP report writers and query tools
  • Spreadsheets (for example Microsoft Excel)
  • Corporate Performance Management (CPM) tools (for example Solver)
  • Dashboards (for example Microsoft Power BI and Tableau)

Corporate Performance Management (CPM) Cloud Solutions and More Examples