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Automated Monetary Storytelling at Your Fingertips: Here is How

Each monetary skilled understands that the numbers matter an excellent deal on the subject of reporting monetary outcomes. Accuracy, consistency, and timeliness are necessary. Those self same professionals additionally know that there’s substantive that means behind these numbers and that it’s necessary to inform the tales that lend further depth and context to the uncooked monetary statements.

That is the place narrative evaluation comes into play. The numbers alone can solely present a restricted understanding of how the enterprise is performing. To get the entire image, the reader wants contextual info. Whether or not that’s an investor, an organization govt, or an worker stakeholder, the explanatory notes that accompany monetary statements are a essential piece of the puzzle. In some circumstances, narrative evaluation could also be essential to help authorized or regulatory compliance.

How Narrative Evaluation Is Managed at Most Firms

Most monetary reporting instruments are targeted on producing monetary statements. That’s necessary, after all. With out the appropriate purpose-built reporting resolution, instantly linked to your underlying knowledge sources, you’ll be left with a set of spreadsheets, resulting in errors, inconsistencies, and time-consuming processes that delay your month-end shut.

Most instruments cease there. They don’t essentially allow customers so as to add narrative evaluation or to collaborate with others throughout the group to refine the explanatory notes that add depth and that means to the numbers.

Consequently, most organizations resort to handbook strategies of mixing their uncooked monetary knowledge with narrative evaluation. To complicate issues additional, most firms have to current monetary outcomes to a wide range of totally different audiences, normally in several codecs. This results in a extremely fragmented method to growing stories. The “final mile” typically consists of hours spent manually copying and pasting knowledge from supply programs or disparate spreadsheets, after which passing these information backwards and forwards over insecure channels, akin to e-mail, till the stories are full.

Think about a state of affairs by which your accounting staff has produced draft monetary statements. The CFO has requested for a slide present presentation at subsequent week’s assembly of senior executives. You copy and paste the numbers right into a abstract P&L slide, adopted by a couple of slides that spotlight gross sales tendencies for the quarter, one other for money movement, and a sequence of detailed slides that present bills. The CFO provides a set of explanatory bullet factors alongside the numbers on every slide.

Whereas that is occurring, one other staff member begins to compile the identical info for an investor relations net web page. This time they’re formatting the stories utilizing an HTML editor, and the narrative evaluation is a bit much less detailed. In the meantime, a 3rd copy of the monetary statements (additionally with commentary) is being developed in Adobe InDesign, in preparation for a graphical PDF report back to be shared as a part of a brand new investor bundle.

Now comes the dangerous information: the accounting staff has discovered that they should make a couple of adjusting entries that may influence each P&L and stability sheet accounts. You’ll want to regulate the narrative notes accordingly. You’re already coping with (at the very least) three totally different copies of the identical info, however as a result of there’s nothing linking your supply system and your narrative evaluation to these three (or extra) output paperwork, you’re left with just one selection. Each doc must be edited individually.

That is the place inaccuracies and inconsistencies can simply emerge, if you happen to’re not very cautious. Think about the truth that a single monetary report can have lots of of particular person knowledge factors, a few of which is likely to be buried throughout the narrative evaluation itself. It takes a substantial amount of consideration to element to just be sure you report any ensuing modifications precisely on each web page of every of these paperwork.

Now contemplate what occurs when the form of last-minute change described above happens three or 4 instances (or extra) throughout your month-end closing course of. Once more, you could edit each report back to replicate these modifications, and with every of these edits the probability of errors and inconsistencies grows greater.

Monetary reporting is a high-stakes endeavor. Senior executives, buyers, and regulatory businesses are all relying on this info. Even a minor error can result in a drop in confidence, or worse. This is the reason conventional handbook strategies of manufacturing and publishing monetary outcomes merely don’t work effectively. They’re tedious, time-consuming, and dangerous.

Automating Monetary Storytelling

By automating these processes, firms can dramatically scale back their publicity to threat, remove wasteful effort, and produce correct, constant monetary stories and shows in far much less time than it takes utilizing handbook strategies.

Let’s take one other have a look at the instance cited above, contemplating how this would possibly work at an organization that makes use of an automatic inside reporting and disclosure administration resolution. Somebody on the accounting staff enters that last-minute adjustment within the normal ledger. The monetary statements instantly replicate that change within the earnings assertion, stability sheet, and assertion of money flows.

The manager slide presentation, likewise, is mechanically up to date with the brand new numbers. Adobe InDesign displays the modifications, too. No effort was required to make these changes as a result of they flowed mechanically from the disclosure administration system.

Now think about that a number of of the explanatory notes that accompany the present monetary statements require some small changes on account of the brand new numbers. A staff lead within the accounting division makes the modifications, sends them to the CFO for approval, and the updates movement mechanically to every of the output paperwork, with out additional human intervention.

It’s additionally comforting to know that the corporate has a whole audit path displaying who has edited the narrative evaluation that accompanies the monetary statements, and when their modifications had been made. There may be an approval course of in place to make sure that the appropriate persons are absolutely knowledgeable of each edit and have a chance to just accept or reject the proposed modifications.

The CertentCDM Platform

Automated monetary reporting, with narrative evaluation permits firms to streamline and improve just about all features of the inner efficiency reporting and exterior disclosure administration processes, dramatically decreasing the related dangers and prices.

Certent Disclosure Administration is a safe, collaborative, enterprise-scalable reporting and course of administration platform for producing recurring multi-author stories and shows. It centralizes enterprise knowledge from a number of sources right into a single system of report, dynamically integrating numerical knowledge with narrative evaluation in a managed and absolutely auditable setting. Experiences replace mechanically when the supply knowledge modifications throughout all tabular, graphical, and narrative parts of the report.

To study extra about how Certent Disclosure Administration permits organizations to automate their monetary narrative, obtain the e book entitled “Automate Your Monetary Narrative: Inform the Story Behind the Numbers”:

20220929 Landing Page Automate Your Financial Narrative

Automate Your Monetary Narrative: Inform the Story Behind the Numbers

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