What are Business Reports?
Business reports are commonly factual documents that reveal a company’s core business functions, financials, and performance over a period of time (i.e. quarterly and annually). In most cases, these reports are conducted and written internally; however, the demand for outsourcing business reports has increased.
Dynamic Business Information, a leading provider of third-party business documents and reports, explains why companies should use reports written by an outside source:
Some companies may choose to outsource an in-depth report about their company from a third party provider as they know that all the information will be unbiased and objective. This is usually favoured over reports provided by the company, as it will reveal the authentic details of the company's performance, whereas the report generated internally will favour the positive attributes of the company’s performance, so that management looks good in the eyes of the stakeholders.
Types of Business Reports
There are different types of reports that a business can utilise, although the primary purpose of a business report is to provide insight into an organisation, in most cases, the reports can be subcategorised as its use may require more detail towards one specific area of the business.
Some examples of different types of business reports are:
Company checks: This report provides an outline of official company facts from the local registry (Companies House in the UK). It covers the organisations legal status, such as if it is inactive/active or bankrupt. Some other information in the report includes details regarding shareholders, directors, and share capitals.
Financial report: This report is useful for credit risk assessments or conducting financial due diligence. It gives insight into the company’s finances, their annual revenue, profit, accrued debt and is one of the most critical reports used for mergers and acquisitions processes.
Annual reports: This report is a comprehensive documentation of the previous year’s business activities, performance and finances. Annual reports are usually intended to be given to shareholders but can also be multipurpose, as a marketing tool to provide an in-depth introduction to the organisation.
Uses of Business Reports
Benchmarking, Goal Setting and KPI’s
Most business reports show data that run over a whole financial year, this is very useful for benchmarking, and goal setting as performance trends can be reviewed, and you are aware where improvements need to take place. Having previous reports of data allows you to see the whole picture as you are able to assess where the company had grown and where they had a decline in overall performance. This may aid them to set achievable KPI’s and to set benchmarks which are realistic for them to achieve in the following year.
Transparency for stakeholders
Companies produce reports as an annual obligation to their shareholders; however, these reports are also available for the use of any third party that has taken an interest in the company’s performance and activities. Government organisations, employees and competitors can oversee the results of the business process and utilise it for their purposes.
Public reports on official platforms such as Companies House provides complete transparency into the businesses’ legal standing and finances, for the previous year. These reports are regarding wholly factual and unbiased as the report is based on a company’s legal documents and tax submissions.
Used for Audits and to Identify Problems
Reports help you build a paper trail of your businesses past. Reports on sales turnover, budgets, inventory and employee retention are some examples of the different ways you can gain insight into specific areas in your business. Careful assessment of a compilation of past reports will help you identify and address any problems or ongoing trends which you may have otherwise missed out. Having multiple reports over a period of years is useful, should you ever need to approach a bank for a loan or decide to sell your business.
Used for Planning and Decision Making
Lack of accurate information can result in making pressurised critical decisions, which may then lead to financial losses and missed opportunities. However, having reports allow you and other key business decision makers to make confident decisions about your organisation and its future. The data on the report can be used to back up and justify decisions to ensure that decisions add value, are strategic and capable of improving the overall success of the business.
There are many more uses of business reports and can impact critical decisions on areas such as product developments, dismantling of departments, employee layoffs, and expansion plans.