A financial report is an official document used to describe your business’s current and historical data, and also to share SMART goals for future performance. It can be a useful tool to help your business improve operations, optimize strategies, and spot trends.
A complete financial report should cover several key sections, including a summary of important statements, such as the cash flow statement and balance sheet. It should also include a section that highlights the key metrics and ratios most relevant to your audience. Finally, a financial report should also incorporate forecasts and projections that draw on the available data to make educated guesses about your company’s performance.
Creating a financial report starts with gathering and organizing all of your original receipts. Once this is done, you can begin preparing accounting vouchers to record each transaction. This is a time-consuming process, but one that is essential to guarantee accuracy. Using a professional reporting tool like FineReport, which allows for real-time data syncing, can help streamline this process and boost efficiency.
The most important parts of a financial report are the summary of income and balance sheet information. The first includes a breakdown of your business’s net income, subtracting non-cash expenses (like depreciation and amortization) from actual cash inflows and outflows. The second part lists all of your assets (cash, marketable securities, inventory, accounts receivable and loans payable), liabilities and equity at a given point in time. You should also include the amount of your retained earnings, which is profit that you choose not to distribute as dividends to owners or shareholders.