A financial report is a detailed snapshot of a business’s finances over a certain period, such as a quarter or year. It pulls together important data from the balance sheet, income statement, and cash flow statement to show how money is moving in and out of the company. Financial reports help investors, managers, and regulators gain a deeper understanding of a company’s performance and potential trajectory. They are also used to comply with regulatory requirements and to file with the SEC (public companies) or state governments (private companies).
A good financial report presents both a narrative flow of the numbers and underlying data points, as well as summary sections that contextualize and highlight the most relevant information for your audience. Considering your audience’s level of financial literacy can help you determine how to present the information, such as including visual aids or focusing on a particular area of interest.
The financial reporting process can be complex, especially when preparing for external requirements or meeting rigid deadlines. Using an integrated FP&A solution helps streamline and automate the process so that you can focus on gathering accurate data, analyzing it, and using it to inform strategic decision-making.
A financial report can also help you understand cash inflows and outflows, which is an essential component of a healthy business. With this information, you can plan ahead for expenses and identify areas where your business might need to tighten its budget or make changes.