Financial Reports: How to Make Them User Friendly
It goes almost without saying that the financial reporting of a business is of key importance to those who use such reports in the process of their decision making. Most business people understand just how much rests on the assessing of such reports, anything from whether or not they get a bank loan, or bag a large investor, to how much tax they pay at the end of the year, so, taking their importance as a given, are there ways to make the financial reports your business produces work better for you? How can these vital reports be improved to make them more user-friendly and therefore pleasing to the end user?
Cautious.
There will almost certainly be parts of the information you give that you have had to estimate; obviously you cannot ever be one hundred percent accurate with financial predictions, but the information still needs to be provided, in these situations it serves everyone well to provide conservative estimates; guard well against over-optimism in figures that are yet to be seen.
Tailored.
Although there will without doubt be someone for whom you are producing a particular financial report, who they are can differ widely; it is important when putting your information together to remember who will eventually read it, because there may be a chasm of difference between how, for instance, an accountant views financial information and how a potential investor might. It is worth bearing in mind that not all of your readers will have the same skill-sets or experience.
Dependable.
It matters not at all who is going to be using the information you provide when it comes to being honest about the facts; whoever reads your report needs to be able to trust that everything they see is completely candid and not fudged or polished or padded in any way; apart from the obvious problems reporting in this way could bring, you cannot rely on the right decision being made if the decision is based on erroneous info.
Pertinent.
Keeping what a report says on track and applicable to the reason for producing it is pretty vital; there are of course many types of financial report and not all concern the same area of your business’ finances. Try to focus on exactly what the report is aiming to say and steer away from extraneous or irrelevant stuff that could get in the way of the heart of the matter.
Comparable.
Your reports will not exist alone in a vacuum. Each time that your business produces a financial report it joins all of those that have been produced before and will be produced in the future, not just by your company, but by every other business in existence. Professionals whose job it is to utilise financial reports will sometimes need to compare the current reports with your business’ historical reports and perhaps also with those of other firms. To do this, there needs to be a certain uniformity about how the information is presented and a consistency to what is included. There are of course official guidelines laid down by the accountancy profession to help with this, and it is important to follow these with care.
