3 Purposes of Writing Annual Reports


annual reports, autumn

Can you believe it is October? At my house, the leaves are changing, and the temperature is dropping. These things tell me it is time for sweaters, football games, pumpkin spice everything, and if you are in the accounting industry, annual reports.

Most companies create, in one form or another, an annual report. Most often, those companies turn to their CPA or CFO to provide the report. That is a tall order! Here at Reach Reporting, we strive to make that task less daunting and less time-consuming. Saving you time while also making you look amazing with your annual report (or any financial report) is the reason we created Reach Reporting.

Annual reports serve three distinct purposes;

  1. Promote the company
  2. Display its financial performance and goals
  3. Meet regulatory requirements

Finding a balance between each purpose can be tricky. To promote, it needs to be fun, exciting, and good looking, but to meet requirements, it will also contain what can sometimes be boring financial data. Like I said, a tricky balance. Let’s go over each purpose and find a way to combine them all into one fantastic annual report with the help of Reach Reporting.

Promote the company

Promotion, now this is the fun part. Marketing and promotion take up a large chunk of the report. Use this time to knock everyone’s socks off. Impress current shareholders and possible investors with all the accomplishments in the last year and what to expect in the next year. Use exaggerated words and terms, really go all out for this purpose! If built correctly, the annual report can be one of your companies best assets.

Take as an example; Warby Parker’s 2014 annual report. While it isn’t a good example for the other two purposes of an annual report, it indeed promoted the company! They created a digital experience for anyone to participate in, not just shareholders or investors. The report is eye-catching, interactive, and fun! It went viral on social media, which then generates leads to their website and their product. It helped them become a household name. Brand recognition is never a harmful consequence of your annual report.

Most often, promoting a company on paper is accomplished by using bright colors, incredible photos, storytelling, creative delivery, and puffery. Don’t be overwhelmed; reach Reporting has an entire design team that has created pre-built beautiful and professional reports that will knock their socks off. You can add photos and images quickly, choose a color scheme and theme. Use the live text feature to add stories, change fonts, and text color. All of these features will, for sure, catch the eye of shareholders and promote your company. We make it as easy as possible for you to spend less time and still create a beautiful product.

Meet regulatory requirements

Following the rules, this is the less fun part. Any publicly-traded company, as well as companies that meet specific other criteria, are required by US law to file an annual report to the US Government. The requirements vary by state and industry, so be sure and double-check for your situation and location. Annual reports must include the following;

  • Balance sheet
  • Statement of cash flow
  • Income statement
  • The market price of the company’s stock
  • An overall description of the industry in which the company is involved.
  • MD&A of the business’s financial condition along with the results that the company has posted over the previous two years.
  • A brief description of the company’s business in the most recent year.
  • Information related to the company’s various business segments.
  • Listing of the company’s directors and executive officers.

That list just sounds boring, but it doesn’t have to be!  As stated above, the color and theme you choose are continuous throughout your report. Any charts, graphs, tables you include are color-coordinated with the rest of the report. Using the live text feature will make the data and numbers more comfortable to explain and clarify. Feel free to resize the information to full-page size or put several on one page. See, I told you Reach Reporting would make it less tricky to frame the regulatory information in a slightly more exciting light. We joke about this information being unexciting, but it is imperative. Crucial to include in the report, but even more important is that the data is correct. Reach Reporting syncs with your QBO, QBD, Xero, or CSV trial balance information, so you can trust the numbers are on point.

Since most companies do not want to create two separate reports, companies include the regulatory information along with the promotional information. Merging the two purposes is both a time and money saver. It is also much easier and faster to create your report when you use Reach Reporting.

Display financial performance and goals

This ultimate purpose is a combination of both promoting the company and meeting the legal requirements. Most companies would produce an annual report in one form or another, even if the law didn’t require it. It is the best way to gain perspective of the direction of the company based on the past year’s performance. Looking back, learning from experiences can help a company move forward in the years to come.

Some of the financial performance data will be covered in the required information, but this is where you turn the data into a story. Transform the raw data into an easy to digest, beautiful, financial story. Show comparative data and explain what the numbers truly mean to the owner, shareholders, and possible investors. Tell them the good news. Revisit the company goals set back in January; how close or far away from reaching them did the company come? Looking back at the goals set is an effective way to set your goals for the coming year. See our past post about setting financial goals for inspiration.

This portion of the report is a great place to add photos and tell stories of how your company affected the lives and business’ of its clients for good. Interview a happy client and add their story. Use quotes, photos, and examples of how you helped them. Not only can you include how your company affected its clients but also the employees. How did the company change the life of its employees? Including any accomplishments of your employees from this year is a great idea. Any new college graduates? Who had a baby or got married? Retire? Be sure and include if the company participated in a fundraiser or service project. Now is the time and place for the feel-good moments. Be sure and use photos and specifics. Everyone loves a heart-felt, gives-you-the-feels story.

Annual reports do not need to be overwhelming and cause stress. Start now gathering the required information, the stories to tell, and the photos to include. The best advice is to check out Reach Reporting. Come and see how we can make you look good in less time and with less stress. Our goal is to create visually enhanced annual reports that make you look amazing all in less time than ever before.

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