Financial report is a snapshot of your company’s financial health over a specific period, typically on a quarterly or annual basis. It combines important data from your income statement, balance sheet, and cash flow statement to illustrate how money is coming in and going out of your business. Ultimately, it helps you make informed decisions and identify trends to drive efficiency and growth.
In addition to providing transparency and accountability, financial reports also allow you to attract investors or lenders, manage credit risk, plan budgets, and conduct financial forecasting. However, creating an accurate and timely financial report is no small feat, especially when you’re dealing with complex accounting practices and a multitude of stakeholders.
Whether you’re preparing your financial report for external use, like regulatory bodies, tax authorities, investors, creditors and trade partners or internal users, such as your senior management team, it’s crucial to adhere to strict accounting and financial reporting standards. These guidelines ensure your information is relevant, reliable, comparable and understandable while disclosing the underlying accounting policies that may impact your financial health.
When drafting your financial report, be careful not to overload it with unnecessary details or information that might confuse the reader. Instead, highlight key metrics and insights that align with your report’s objective. Always cross-check your data and information for accuracy to avoid any costly mistakes. Using a tool like Fyle to automatically match receipts to expenses can reduce the time spent manually entering data and help you improve the quality of your financial reports.