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Reviewing the year

In a recent blog post we looked at how to construct a financial report. Now we outline what is required to produce an engaging and comprehensive annual report and how accounting software can be used to find the necessary financial data.

There are many reasons why annual reports are so lengthy, one of which is that they don’t just cover the financial performance of the organisation over the previous 12 months – they are also an opportunity to review significant developments and explain why certain decisions were taken as well as to look ahead.

Listed companies are obliged to produce these documents, but small businesses may also choose to publish an annual report as part of their interaction with customers. 

Setting the scene

Start by deciding the message you want to get across. The figures may tell their own story, but this doesn’t stop you from making sure the points you want to make come across clearly.

A typical annual report will include the following sections:

  • Statement from the head of the business
  • Executive summary (no more than two pages highlighting the key messages you want the reader to take from the report)
  • Summary of the company’s achievements over the last 12 months
  • Financial information including assets and liabilities, and income and expenditure

Think about what your audience would want to know. If this is being done for the benefit of customers you need to focus on different considerations than if it is targeted at potential investors, for example.

The ‘write’ approach

Financial reports are usually produced for specific purposes – such as an application for funding – so are not necessarily a regular publication. An annual report (as the name suggests) has to be published every year so it is worth settling on a consistent structure.

There are plenty of templates available online. A quick search online will also throw up examples of style guides that can be used to ensure consistency across each report and indeed all your business communication.

Spelling or grammatical errors will make a bad impression and suggest a slapdash approach. Because annual reports are usually produced by more than one person, a style guide will also help everyone use the same format for dates, titles, etc.

Getting the facts

As with an income statement, cash flow or balance sheet report, using a cloud based accounting package such as Big Red Cloud will make it easier to find the necessary financial data. However, you may also have to gather information from senior management so allow times for interviews and reviews.

The report can point the reader towards a certain conclusion but must be written objectively and accurately. Any attempt to ‘bury bad news’ will be poorly received.

Finally, don’t expect to get it right first time – in fact, you should plan for two or even three versions so you can work out what to include, reflect on the overall impression the report will make, and leave enough time for someone else to read over the document to ensure it is clear and coherent.

Marc O'Dwyer

After completing a Graduate program in Marketing, Marc’s impressive sales career began at Allied Irish Banks, Pitney Bowes and Panasonic where he received numerous Irish and European sales performance awards and consistently exceeded targets and expectations. In 1992, Marc’s entrepreneurial spirit led him to set up his own business, Irish International Sales (IIS). Initially, this company was a reseller for Take 5 Accounts and Payroll software. Within four years, IIS became the largest reseller of Take 5 in Ireland, acquiring four other Take 5 resellers. He also found time to set up two mobile phone shops under the Cellular World brand and a web design company offering website design services for small businesses. In 2001, he bought the majority share in a small Irish software business, Big Red Book. At that time, the company was losing money. The company became profitable within two months, and Marc then acquired a payroll company to compliment Big Red Books Accounting products. In 2003, IIS were appointed as Channel Partners with SAP for their new SME product, SAP Business One. Marc sold his Take 5 business and concentrated on developing this new market for SAP As a result, by 2007, IIS was recognised as the largest Channel Partner for SAP in EMEA (Europe Middle East and Africa). In 2008, the IIS Sales Manager bought the Company from Marc in an MBO. He launched Big red cloud in June 2012, the online version of big red book, to date the company successfully converts 59% of trials into sales and the number of customers is growing rapidly. Marc continues to run both Big Red Book and Big Red Cloud which now support 75,000 businesses. He is a very keen sportsman, having played rugby for 20 years, represented Leinster at under 16 and under 20 levels, and league squash with Fitzwilliam Lawn Tennis Club for 10 years. Marc has competed in 11 Marathons, including the London and Boston Marathons, and has completed several Triathlons and Half Ironman races. He has also completed six Ironman Races in Austria(x2), Frankfurt (Germany), Nice (France) , Mallorca (Spain) and Copenhagen (Denmark)

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