A financial report is a snapshot of your company’s finances over a specific period—either a quarter or a year. It brings together important data from your balance sheet, income statement and cash flow statement to show how much money is coming in and going out of your business. It reflects profits and losses and helps investors, lenders, trading partners and management evaluate the company’s performance. Financial reporting is usually required by law for public companies and often voluntary for private, non-public businesses.
There are many different types of financial reports, but the most common ones are an income statement, a cash flow statement and a statement of changes in equity. These are essential for measuring your company’s performance, evaluating risk and making informed strategic decisions.
To create these reports, you need to collect all relevant data and information—which can be a lot of work. You need to reconcile the beginning and ending accounting balances for your general ledger accounts for the report period, and ensure all calculations are accurate. You also need to decide what reporting standards you’ll follow (e.g., Generally Accepted Accounting Principles, International Financial Reporting Standards).
Once you’ve collected all the data, it’s time to prepare your report. Start by putting it all together in a format that’s easy to read and understand. You may want to use charts and tables to make your data more visual. Then, check for errors and inconsistencies. Finally, be sure to adhere to your chosen reporting standards and meet all regulatory and legal requirements.