The 6 essential elements to an outstanding financial report

The purpose of financial reports is to inform your stakeholders about the health of the company. The six essential elements that make up an outstanding report are:

The 6 essential elements to an outstanding financial report

1. Financial statement.

Financial statements are easy to prepare when you use online reporting software that generates reports automatically after all transactions have been entered into your accounting system. These financial statement templates can be customized to fit any size business by adding rows for categories relevant only to your company’s needs — and they’re free! All you need is an internet connection, and a computer with Microsoft Excel or Open Office installed on it (the template will open in either program).

2. Operating statement.

The operating statement provides a snapshot of the company’s financial performance during one period. It is also called an income statement, and it shows whether your business made or lost money over that time frame.

Operating statements are easy to prepare when you use online reporting software that generates reports automatically after all transactions have been entered into your accounting system. These operating statement templates can be customized to fit any size business by adding rows for categories relevant only to your company’s needs — and they’re free! All you need is an internet connection, and a computer with Microsoft Excel or Open Office installed on it (the template will open in either program).

3. Statement of cash flows.

The statement of cash flows tells you how much money your business had at the beginning of a certain time period and how that amount changed by the end of it. That means you’ll know whether your net income or loss is due more to an increase in sales volume than from any other factor, such as changes in accounts receivable, inventory levels, fixed assets investments, short-term loans taken out for expenses, etc. Cash flow statements are easy to prepare when you use online reporting software that generates reports automatically after all transactions have been entered into your accounting system. These cash flow templates can be customized to fit any size business by adding rows for categories relevant only to your company’s needs — and they’re free! All you need is an internet connection, and a computer with Microsoft Excel or Open Office installed on it (the template will open in either program).

4. Notes to financial statements.

Notes to financial statements provide details about the information that you presented in your report, and they’re set apart from it on a separate page. These notes typically include explanations of accounting policies (which is especially important if your company follows IFRS), management’s discussion & analysis of how the business performed during the period covered by its reports, critical judgments made by top managers, as well as data such as industry comparisons. Notes are easy to prepare when you use online reporting software that generates reports automatically after all transactions have been entered into your accounting system.

5. Income statement.


The income statement shows whether your business made or lost money over that time frame. It is also called an operating statement, and it shows how much revenue a company generated from its normal business activities during one period of time as well as the cost to generate those sales. Income statements are easy to prepare when you use online reporting software that generates reports automatically after all transactions have been entered into your accounting system. These income statement templates can be customized to fit any size business by adding rows for categories relevant only to your company’s needs — and they’re free! All you need is an internet connection, and a computer with Microsoft Excel or Open Office installed on it (the template will open in either program).

6. Balance sheet.


A balance sheet provides a snapshot of what your company owns
and owes at the beginning and end of one specific period. It shows you whether assets have increased or decreased during that time frame, as well as how much equity has been generated from business activities over that same timeframe. Balance sheets are easy to prepare when you use online reporting software that generates reports automatically after all transactions have been entered into your accounting system. These balance sheet templates can be customized to fit any size business by adding rows for categories relevant only to your company’s needs — and they’re free! All you need is an internet connection, and a computer with Microsoft Excel or Open Office installed on it (the template will open in either program).

Conclusion: The financial report is a critical document for any business owner. It’s the only way to determine whether your company made or lost money over a certain period of time and what factors led to those results.

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