How to create a financial report

Financial reports might not be one of the most exciting parts of running a business, but they’re certainly one of the most essential. But they don’t have to be boring either – at least not if you steer clear of the more basic financial report templates and make them really speak to their audience.

A little design flair coupled with solid data is certainly going to keep the shareholders and investors happy. Not only that, but a robust and regular financial report can be used to improve performance, boost morale and help you make the right moves going forward. But before we dive into the specifics, let’s start with the basics.

What is a financial report?

Also referred to commonly as a financial statement example, a financial report uses predetermined KPIs to communicate a business’ key financial information. The idea is to visualise relevant information in a concise and attractive way so that internal and external sources can analyse trends and pick out strengths and weaknesses.

Given the data-driven age we live in, financial reports have never been more valuable. They are used to determine how effectively finances are being used, identify problems, reveal specific transaction details, evaluate debts and develop financial ratios to accurately place your business in the market.

As far as frequency is concerned, daily reports rarely provide accurate information when analysed individually, but can reveal greater subtleties over time. Generally speaking, however, weekly, monthly and annual reports are more common. Regardless of how often you make your reports, there are several common factors that go into putting them together.

A basic financial report template

 This financial report template will reveal the five points that should be present in all reports. It will also provide some detail on visuals, for those who want to set a tone with their statements.

The mission

What are you trying to achieve with this report? Are you trying to impress potential investors, give the stakeholders something to pat themselves on the back over or just familiarise everyone with your company and its financial position?

The audience

Who are you creating this report for? This should have a major impact on how you proceed. If it’s an internal report for the finance department, for example, then focus on the data and the jargon. If it’s a more general report, meanwhile, maybe focus more on visuals (more on that later) and making it more approachable.

The metrics

Which KPIs you focus on will depend on your business. Which metrics you use will also have an impact on what financial statement examples you’re expected to include in the report – a balance sheet, income statement and/or cash flow statement.

The visuals

Raw data can be difficult to digest without visuals to help it go down. Consider the audience once again and think about how that audience would prefer to see the data. Graphs and charts are commonly used to visualise data more effectively, but it’s also worth considering the colour scheme of your report, as well as which methods will work best with different sets of data.

The software

Whereas financial reports used to rely on accountants physically collecting pieces of data together and going through them piece-by-piece, today there are dozens of accounting software solutions such as Xero on the market that do all the tedious work for you. Even better, these solutions can generate visuals and even offer various financial statement templates and examples that you can make your own. There truly has never been a better time to be an accountant.

We can help

If you’re interested in learning more about financial reports then get in touch with our financial experts. Find out how GOCardless can help you with ad hoc payments or recurring payments.