A financial report is a formal document that comprehensively records and reflects a business’s financial status, operating results and cash flows over a set period of time. The report also enables people to gain insights for future development of the enterprise. It’s one of the most important materials for enterprises seeking investments or loans from outside parties.
The most common types of financial reports are balance sheets, income statements and cash flow statements. The balance sheet displays the company’s assets, liabilities and equity at a given point in time. The income statement outlines revenue, expenses and net income/(loss) for the specified reporting period and is often presented in comparison to previous periods. The cash flow statement reveals the company’s cash inflows and outflows and helps determine its liquidity.
Financial reporting is a complex process that requires high accuracy and timely submissions to meet external and internal requirements. It involves collecting, organizing and analyzing original receipts and preparing corresponding accounting vouchers according to accounting standards (e.g., Generally Accepted Accounting Principles or International Financial Reporting Standards).
In addition to providing external users with an accurate and understandable picture of the company’s financial condition, timely financial reports help finance teams and businesses spot trends in the business to take advantage of opportunities and mitigate risks. The key to meeting the objectives of financial reporting is to use a powerful accounting solution with flexible functions, such as FineReport. This tool can save you the tiring data collection process and improve reporting efficiency, while supporting real-time report updating.