How to Write a Great Financial Report? Tips and Best Practices

how to write a financial report for an organization

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To make informed financial decisions in your company, you first have to be, well, informed.

Understanding the financial activity of your company sets the foundation for identifying good business opportunities and making the right decisions to ensure future growth.

By tracking, organizing, and analyzing financial performances, you will have a clearer picture of where the money is going and where it’s coming from. No wonder finance is one of the most monitored and reported operations, according to Databox’s State of Business Reporting .

To stay on top of numbers, companies use financial reports.

Financial reports are formal documents that capture all the significant financial activities within a business in a specific period.

While these reports are extremely useful for you and your key stakeholders, you won’t be the only one reaping the fruits. Financial statements are also examined by potential investors and banks since they provide them with enough insight to determine whether they want to invest in your business.

In this article, we are going to walk you through what financial reports are, why they are significant and show you a step-by-step guide that will take your financial reports and business reporting as a whole, to the next level.

What Is a Financial Report?

What is the purpose of financial reporting, what are the types of financial reporting, how to write a financial report, finance report examples.

  • Improve Financial Reporting with Databox


Financial reports are official company documents that showcase all the financial activities and performances of your business over a specific period. Usually, they are created on a quarterly or yearly basis.

Every business is legally obliged to use financial reporting to display its current financial status and organize financial data.

The documents are available for public view which means that potential banks and investors will most likely analyze them before they decide to work with you and invest in your business.

They are also important for tracking future profitability estimates, business growth, and overall financial health.

At bottom, financial reports provide you with insight into how much money you have, how much did you spend, and where it is coming from. Based on the data within the report, you can make informed business decisions and create plans for future spending.

The key things a financial report should include are:

  • Cash flow data
  • Asset and liability evaluation
  • Shareholder equity analysis
  • Profitability measurements

Related : Quarterly Business Review: How to Write One and How to Present It Successfully

Financial reports are used to track, analyze, and display your company’s cash flow .

Understanding how your business is performing from a financial standpoint can seem like an impossible task without these reports.

However, financial reports aren’t used only because they are practical; you are legally required to include them.

Here are some of the main ways in which financial reports can help your business:

Communicate essential data

Monitors income and expenses, supports financial analysis and decision-making.

  • Simplify your taxes

Having an insight into the current financial situation of your business is important to each high-ranking member of the company (stakeholders, executives, investors, and partners).

You will use this financial data to create budget plans and monitor the company’s overall performance. When you establish an open communication and transparency policy within your business, you are more likely to attract new investors and enhance funding.

The information communicated in financial statements is what investors rely on when they are assessing risks, profitability, and future returns.

One way to gain the trust of investors is to showcase how your financial performance stacks up against your peers. For example, by joining this benchmark group , you can better understand your gross profit margin performance and see how metrics like income, gross profit, net income, net operating increase, etc compare against businesses like yours.

For example, you can discover that the median gross profit a month for B2B, B2C, SaaS and eCommerce is 73.79K . If you perform better than the median, this might be a good incentive for your investors to increase your funding.

average gross profit for B2B, B2C, SaaS and eCommerce

*Important note: Databox Benchmark Groups show median values. The median is calculated by taking the “middle” value, the value for which half of the observations are larger and half are smaller. The average is calculated by adding up all of the individual values and dividing this total by the number of observations. While both are measures of central tendency, when there is a possibility of extreme values, the median is generally the better measure to use.

Benchmark Your Performance Against Hundreds of Companies Just Like Yours

Viewing benchmark data can be enlightening, but seeing where your company’s efforts rank against those benchmarks can be game-changing. 

Browse Databox’s open Benchmark Groups and join ones relevant to your business to get free and instant performance benchmarks. 

Financial reporting involves tracking incomes and expenses for a specific time period. To establish efficient debt management and budget allocation, you will need an insight into the most important spending areas .

By tracking income and expenses , you will also understand current liabilities and assets. Analyzing financial documentation will provide you with a bigger picture regarding the key metrics such as debt-to-asset ratios that investors use to calculate potential profitability.

All of this is information is crucial for staying ahead of your competitors.

Related : How to Write a Great Business Expense Report: A Step-By-Step Guide with Examples

The performance analysis in financial reports is what you rely on to make better business decisions.

Considering the different data that financial reports include, you can check out real-time information regarding historical performances, key spending areas, and use them to create accurate financial forecasts.

Implementing detailed financial analysis and using developed data models can help any business better evaluate current activities and make future business growth decisions.

You will be able to recognize trends, potential problems, and stay on top of your financial performances in real-time. This sets the foundation for quick and accurate economic decisions.

The main purpose of financial reports is to make sure your business is in compliance with the law and regulations of government agencies.

Regulatory institutions examine every document that evaluates the financial activities of your company. This is why making accurate financial documentation is crucial for the well-being of your business.

Aside from accuracy, you will also have to follow certain deadlines that these institutions set. This sometimes causes pressure in accounting departments to create complex financial reports quickly and accurately, which is why regular bookkeeping is immensely important.

In the US, private and public companies have to be compliant with the GAAP (Generally Accepted Accounting Principles), while international companies mostly report under the IRFS (International Reporting Financial Standards).

Both of these organizations provide some standard guidelines but there are a few differences you will have to pay attention to when creating your financial statements.

Simplify your taxes  

No matter how big or small your business is, doing taxes can be a stressful task.

By creating accurate financial reports, you can make tax calculation a lot easier since you will minimize any chances of error and save time by including all financial data in one document.

Not only that, since financial reports are a legal requirement, the IRS uses them to evaluate the tax income of each individual company. 

Additionally, with the introduction of Making Tax Digital (MTD) in many countries, including the UK, it is now mandatory for businesses to maintain digital records and submit tax returns digitally. This means that accurate financial reports are more important than ever, as they will be used to populate the required digital tax submissions.

While financial reports all have the same goal, there are a few different types that you should know about.

This isn’t only a matter of compliance or best practice, these reports are key for understanding the different segments of cash flow.

Here are the main types of financial reporting:

Balance Sheet

Cash flow statement, income statement, shareholder equity statement.

A balance sheet is a financial statement that tracks the total amount of assets, liabilities, and shareholder equities within your company. They also provide you with a real-time evaluation of asset liquidity and debt coverage.

Most companies create balance sheets on a quarterly basis and include the data from each quarter in the annual report.

When creating a balance sheet, there is an asset page (includes available cash, equipment value, inventory value, etc.) and a liability page (includes accounts payable, credit card balances, bank loans, etc.) that you need to fulfill.

Once you total these assets and liabilities, you will subtract liabilities from the assets. The amount you get is what is called ‘owner’s equity’.

This is a financial statement that records all the different cash flow activities in the company.

Cash flow statements track cash generated and cash spent amounts in a specific time period. This report is crucial for measuring whether companies generate enough cash to cover their debts. Also, it provides insight into fund operations, investments, and the overall activities that are generating revenue.

This statement is helpful for investors since they can use it to determine whether your business presents a good investment opportunity .

While balance sheets incorporate certain calculations to determine financial values, cash flow statements are consisted of three main elements:

  • Operational activities – inventories, wages, tax income, accounts receivable, accounts payable, and cash receipts
  • Investment activities – investment earnings use, investment earnings generation, asset sales, issued loans, payments from mergers
  • Financing activities – payable dividends, debt payments, debt issuance, cash from investors, and stock repurchases

The income statement records the company’s expenses, revenue, and net loss/income over a specific time period.

Balance sheets focus on the current activities and performances while income sheets track them over a longer period. Businesses tend to track income statements each quarter to gain better insight into the different financial processes that occur.

Income statements include profits and losses , which is why they are also called P&L statements (Profits & Losses).

The main elements included on the income statement are:

  • Operating revenue – financial data regarding sales of products or services
  • Net and gross revenue – includes the total sales revenue and remaining revenue (after the cost subtraction)
  • Primary expenses – these include general costs, administrative costs, depreciation and selling, and COGS (cost of goods sold)
  • Secondary expenses – capital loss, asset loss, debt interest, and loan interest
  • Nonoperating revenue – this is revenue that comes from accrued interest, it includes investment returns, capital gains, and royalty payments

Even though shareholder’s equity is usually included on the balance sheet, larger companies tend to report these activities on a separate statement.

This statement tracks the amount of money key stakeholders invest in the business. The investments most commonly include company stocks and securities. After dividends are released to stockholders, the retained earnings in the company change.

Stakeholder equity statement includes these key components:

  • Retained earnings after dividends and losses have been subtracted
  • Common/preferred stock sales
  • Purchased treasury stock
  • Generated income (including the income that comes from unrealized capital gains)

Pro Tip: How to Stay on Top of the Financial Health of Your Business

Do you own and manage a small business? Then you know how much of a struggle it can be to stay on top of the financial health of your business on a daily basis. Now you can pull data from QuickBooks and HubSpot’s CRM to track your key business metrics in one convenient dashboard, including:

  • Open deals and deal amounts by pipeline stage. Get sales data directly from your HubSpot CRM and track deals, deal amounts, deal stages, and dates from your sales pipeline. 
  • Key financial data. Track gross profit margin, open invoices by amount and by customer, paid invoices, expenses, and income from QuickBooks.

Now you can benefit from the experience of our HubSpot CRM and QuickBooks experts, who have put together a plug-and-play Databox template that helps you monitor and analyze your key financial metrics. It’s simple to implement and start using, and best of all, it’s free!


You can easily set it up in just a few clicks – no coding required.

To set up the dashboard, follow these 3 simple steps:

Step 1: Get the template 

Step 2: Connect your HubSpot and Quickbooks accounts with Databox. 

Step 3: Watch your dashboard populate in seconds.

Financial reports help you understand your company’s financial performance, attract potential investors, and are legally required. This is why you have to make sure that they are as accurate as possible.

You want your financial reports to be comprehensive, understandable, and precise.

Even though creating a good financial report can be very complex, we are going to show you a step-by-step guide that will make the whole process much easier.

Follow these steps to create a great financial report:

Step 1 – Make a Sales Forecast

Step 2 – create a budget for expenses, step 3 – create a cash flow statement, step 4 – estimate net profit, step 5 – manage assets and liabilities, step 6 – find the breakeven point.

When making a sales forecast, the first thing you should do is create a spreadsheet that includes your sales performance from the last three years.

Use a specific section for each line of sales and organize columns for each month of year one. For years two and three, organize columns on a quarterly basis.

Create three different blocks – one for pricing, one for unit sales, and the third one for multiplying units by unit cost (to calculate the cost of sales).

Cost of sales is important because it helps you calculate a precise gross margin.

Once you do the math, you can make an accurate sales forecast that is backed up by historic financial data.

PRO TIP: If you are using HubSpot CRM to visualize your sales data, watch the video below to learn how to set up and track your HubSpot CRM data in order to more accurately forecast your sales this month, quarter, and beyond.

how to write a financial report for an organization

Once you have made a sales forecast, you will want to calculate how much it will cost you.

When creating an expense budget, you should include both fixed costs (rent, payroll, etc.) and variable costs (marketing and promotional expenses). Costs such as interest and taxes can’t be completely accurate, so you are going to have to make rough estimates.

For taxes, you can multiply the estimated debt balance by your estimated tax percentage rate.

To estimate interest, multiply your estimated debt balance by an estimated interest rate.

We already mentioned what cash flow statements are and why they are so important for your business. They are typically created based on the sales forecast, balance sheet components, and other estimates.

To make cash flow estimates, companies should use historical financial statements. If your business is relatively new, you should project cash flow statements by breaking them down into 12 months.

Your way of invoicing is also linked to cash flow estimates.

For example, if a customer has the right to pay for your services after 30 days, the cash flow statement will show that you only collected 80% of your invoices within the month (while you need 100% to cover the expenses).

To estimate net profit, you should use the numbers from your sales forecast, expense estimates, and cash flow statement.

You can calculate the net profit by subtracting expenses, interests, and taxes from the gross margin .

This step is extremely important since it serves as a profit and loss statement that helps you create a detailed business forecast for the next three years.

In order to estimate your business’s net worth at the end of a fiscal year, you have to be able to manage assets and liabilities that won’t be shown in the profits and loss statement.

Come up with a rough estimate of how much money you expect to have on hand each month and include accounts receivable, inventory, land, and equipment.

After that, calculate liabilities, debts from outstanding loans, and accounts payable.

You know that you have found a breakeven point if your business expenses are in line with the sales volume.

The three-year income estimation should help you acquire this analysis. In viable businesses, the total revenue should exceed total expenses.

For potential investors, this kind of information is crucial since they want to be reassured that they are investing in a company with steady growth.

Nowadays, most companies use different tools and templates to make their reporting process easier. Using dashboards can help you track the metrics you obtain from the financial management tools that your business integrates.

Databox offers pre-built financial templates that can help you track the most important financial metrics in one place.

With our comprehensive dashboards, you can follow the most significant numbers and later include them in your financial report, making the whole process less time-consuming.

We understand that each business is different, which is why you can also customize the reports in any way you deem fit and at any time.

Here are some of our most popular financial reports that you can try out:

  • Quickbooks Profit and Loss Overview Dashboard

Xero Profitability Overview Dashboard

Stripe (mrr & churn) dashboard, profitwell revenue trends dashboard, paypal (account overview) dashboard, quickbooks profit and loss overview dashboard.

To gain valuable insight into the sales and expenses that incur in your business, you can use the QuickBooks Profit and Loss Overview Dashboard .

Make sure you are staying on top of your numbers by tracking monthly, quarterly, and yearly income. Also, this report will help you figure out how profitable your company is and which areas may need to be fixed.

Some of the key metrics you can follow are net profit, income by month, expenses by month, and profit margin.

QuickBooks Profit and Loss Overview Dashboard

Xero is one of the most popular accounting systems that companies use to manage their financial positions. However, it can sometimes be hard to organize the large amount of data this tool provides.

This is where the Xero Profitability Overview Dashboard can come in handy. This customizable template will provide you with a comprehensive view of the sales and expenses that go into your Xero system.

Once the time comes for creating a financial report, you can simply integrate the data you gathered in this dashboard.

The key metrics it includes are net profit, income by month, expenses by month, profits, losses, gross profit, and other income.

Xero Profitability Overview Dashboard

Use the Stripe Dashboard to monitor your churn rate and track MRR growth in real-time. Also, you can check how many customers your business currently has at any given time.

Once you connect your Stripe account to this template, you will be able to answer these questions:

  • How much money did I make through sales today?
  • How can I track my MRR (Monthly Recurring Revenue)?
  • How many active customers do we have?
  • How much revenue did I lose from churned customers?

Some of the metrics you can visualize are churn rate goal, customer churn rate, gross volume, revenue churn, and customers.

Stripe (MRR & Churn) Dashboard

Profitwell Revenue Trends Dashboard allows you to monitor all the incoming sources of revenue for your SaaS business and keep track of the important churn metrics.

You can use this free template to see how fast your business is growing. The SaaS metrics will all be located in one comprehensive dashboard and you can visualize all the data with only one click.

Also, you can compare revenue from upgrades and downgrades and investigate your churn ratio revenue.

Profitwell Revenue Trends Dashboard

The PayPal Account Overview Dashboard is extremely useful for bigger companies who want to have a clear overview of their payments, refunds, sales, and other key metrics that your business relies on.

Connecting your PayPal account to the template can be done in a matter of minutes and you will get the answers to questions such as:

  • How can I track gross sales?
  • What is the best way to calculate net sales?
  • How much did I spend on PayPal fees in the previous month?
  • How can I check my PayPal account balance?
  • How much money was returned through refunds last month?

PayPal (Account Overview) Dashboard

Streamline Financial Reporting with Databox

Since the financial reports you create will be examined by both government agencies and potential investors, you will want to make sure that they are top-notch.

However, the reporting process can sometimes feel a bit overwhelming and you will face a lot of pressure trying to create the perfect report.

Databox can help relieve this stress and enhance your financial reporting skills.

No matter if you create these financial statements quarterly or annually, you will end up with a handful of data to analyze. With financial reporting software such as Databox, this analysis process will become both simpler and quicker.

With our customizable dashboards, you can visualize all the most important data and gather it in one place. Aside from being visually pleasing, your reports will also be much more engaging and minimize any chances of error since the information will be imported directly from your financial management tools.

To satisfy both your company’s key stakeholders and potential partners, you can sign up here for a free trial and put your financial reporting on autopilot.

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how to write a financial report for an organization

How to Write a Financial Analysis Report for Your Business

how to write a financial report for an organization

In this Article

Is your business worth investing in? For most of you, the answer is a definitive 'Yes.' But in the business world, talk is cheap. So if you want to attract investors, you'll need to be able to walk the talk, i.e., put your money where your mouth is. 

There's no better way to do that than with a financial analysis report. After all, numbers don't lie. They're the smoking gun investors need before investing in your business. 

Want to learn how to write a financial analysis report that attracts investors? This article covers six simple steps to follow. But first:

What is a financial analysis report?

A financial analysis report shows the financial performance of your business over a specified period of time, usually on a quarterly or yearly basis. It's like a medical report but for your business's financial health. 

In several countries, financial reporting is a requirement. The Securities and Exchange Commission requires companies to disseminate these digital reports to their shareholders in the United States. In addition, these financial reports are usually made available to the public if they're publicly-listed companies

A financial analysis report is invaluable to both you and your stakeholders. Let's discuss why you need it in the next section.

How does a financial analysis report help?

To make the right financial decisions for your business, you need data. This helps you lay a solid foundation for future performance and economic growth opportunities. 

However, you need to be able to keep track of and make sense of all your financial data. That's where a financial analysis report comes in. It helps you organize, analyze, and paint a clearer picture of your business's cash flow and allows for seamless management of business expenses too.

Aside from those, here are a couple of more reasons why you need a financial analysis report:              

Ensures transparency

A financial analysis report is easy on the eyes. It's a watered-down version of your finances that communicates essential data you need to make financial decisions. 

You ensure the transparency your stakeholders want, too. 

Tracks cash flow

Generally, financial reports help you understand cash inflows and outflows . For example, if you know your affiliate sales and operating expenses, the cost of getting links to increase website traffic , social media marketing campaign expenditure, and the money coming in, you can make better financial decisions. 

how to write a financial report for an organization

The information can help with debt ratios, budgeting, debt-to-asset financial ratio analysis, and calculating profit margins. 

Suggested Reads: 10 Ways to Improve Your Business's Finance Position

Allows for data-driven forecasting

Historical and real-time financial data help create financial models to predict future financial performance. These reports help you identify trends, patterns, and problems. As a result, you can plan for them early enough. 

Simplifies taxation

To create a financial analysis report, you must have all your data in a single document. It becomes easier for you to do your taxes, saves you time, and reduces the chances of making errors. Moreover, it's an official document that the Internal Revenue Service can use to calculate your taxes.

At the end of the day, the goal of a financial report is to provide insight into your organization's finances. Then, using both historical and current data, you can set SMART business goals to make better decisions for future performance. 

Finally, it's essential to consider the ongoing nature of financial analysis and the need for periodic reviews. Implementing a project review process allows you to regularly assess the financial health of your business, identify any emerging trends or issues, and make informed adjustments to your financial strategies. This continuous evaluation ensures that your financial analysis remains up-to-date and relevant, providing you and your stakeholders with accurate insights into your business's performance.

Suggested Reads: 2022 Business Expense Categories Cheat Sheet: Top 15 Tax-Deductible Categories

Benefits of a periodic financial analysis

Financial analysis makes it easy for you to identify the strengths and weaknesses of your business. Using that information will not only help your business grow but also thrive. What's more, doing financial analysis over specific periods helps you stay on top of your game by:

Helping manage debts

A periodic financial analysis includes a financial ratio analysis; specifically, a Liquidity Ratio called the Current Ratio Analysis. The Current Ratio is the sum of all your current assets divided by the sum of your current liabilities. It shows if you're liquid enough to meet your upcoming debts. So, if you aren't, you can adjust your financial strategy the soonest.

Determining profitability

When you perform a periodic financial analysis, you can determine your company's profitability and make regular adjustments. A profitability ratio is a financial metric that can help you cut production costs and boost your bottom line. 

You can use a profitability ratio (featured below) to determine your profit margin on sales, i.e., your gross profit margin. Here's the formula. 

how to write a financial report for an organization

It's your sales revenue minus the total cost of goods sold (COGS) divided by revenue. 

Managing inventory

Another perk of doing financial analysis over a specific period is that it helps you better manage inventory . This way, you ensure it's always enough to meet projected sales. You do this using a financial management ratio called the Inventory Turnover Ratio. 

Calculate the Turnover Ratio by dividing your total sale by your inventory.  

Checking stability and revenue growth 

The results of a periodic financial analysis yield your debt-to-equity ratio, too. It's a financial metric that shows how you've raised capital for your business. You want to check your stability and revenue growth every step of the way to determine whether your business is viable in the long run.

The debt-equity ratio is calculated by dividing your total liabilities by your shareholder's equity. It's usually included when you write a financial analysis report. 

Generally speaking, the higher your debt-equity ratio, the higher the risk, and vice versa. Investors use this financial metric to check your company's stability and ability to raise money to grow. 

Optimizing for growth

Financial analysis over specific periods helps you identify opportunities to optimize operational efficiency for revenue growth. That is, regular annual reports help you spot patterns and trends. This allows you to nip problematic areas in the bud and prepare in advance. 

For instance, you can adjust seasonal sales fluctuations, variable costs, etc. 

How to write a financial analysis report

Now that you understand a financial analysis report's 'what' and 'why,' it's time to look at the 'how.' 

Here's how to write a financial analysis report:          

1. Give an overview of the company

The first section of your financial analysis report is the company overview. Here, you want to highlight the potential of your business. It's pretty much what you do in a business plan . Investors rely on your company overview to understand your competitive edge. 

The question you want to answer here is - is your business worth the investment you're asking for? Think of the introductions in business plans or on Shark Tank to give you a better idea. As a general rule of thumb, you want to use plain language when writing your description.

You want to share, in brief, your history, business model, type of organization, description, etc. You can share what sector you're in as well as the size and scale of your business. 

Featured below is an excellent example of a fictional company's overview.        

how to write a financial report for an organization

Start by reviewing your quarterly or yearly financing activities, financial data, and statements. Then go through published business studies and industry-specific trade journals. 

You should consider adding a snippet about how you compare to the industry average among your competitors. Like a business plan, you want to show potential investors why they should choose you. You can use Porter's Five Forces model to analyze your competition. 

2. Write sales forecast and other vital sections

It pays to be as precise and comprehensive as possible when writing the main content. So, you’ll need to organize your data and, sometimes, make some calculations yourself. For instance, when writing your sales forecast , you need your sales data for the past three years before you organize it in financial reporting software or spreadsheets. Tally the data on a yearly, monthly (for the 1st year), and quarterly (for the last two years) basis. 

how to write a financial report for an organization

You can write this part using a spreadsheet. But feel free to use financial reporting software if spreadsheets aren’t your cup of tea. 

There are other sections you should create for your report’s main body. 

Let’s look at them one by one:

  • Expense budget

With your sales forecast in place, it's time to figure out how much it'll cost. When setting up your expense budget , ensure it includes variable costs like your marketing budget and fixed costs like rent. In addition, you'll need to create an estimate for items like interest and taxes. 

  • Cash flow statement

A cash flow statement summarizes all the money or its equal coming in (cash inflow) or leaving (cash outflow) a business. To create one, you need historical financial data or project it one year ahead if you're starting. Don't forget your cash flow statement is connected to your invoice.

  • Estimate for net profit

Tally your net profit using your sales forecast, expense budget, and cash flow statement data. Your net profit margin is your gross margin less taxes, interest, and expenses. Try and be as precise as possible since this can stand in as your profit and loss (P&L) statement . 

  • Estimate for assets and liabilities

Your next step is to calculate your company's net worth. How? By managing your assets and liabilities, i.e., those items that don't appear in your P&L statement. 

To do that, ballpark your monthly cash on hand. That is, equipment, inventory, land, and accounts receivable. Then sum up your liabilities, i.e., outstanding loan debts and accounts payable. 

  • Break-even point

The last step in writing a company financial analysis report is calculating your break-even point. That's where your business expenses match your sales volume. Use the formula below to find your three-year sales forecast; this will help you find your break-even point.

how to write a financial report for an organization

Needless to say, if you're operating a profitable business model, then your company's revenue should be higher than your operating expenses. Again, this information helps reassure potential investors of your business' stability and revenue growth potential.  

Refrain from assuming that people know the concepts you'll discuss in your report. Instead, define them in general terms first before you start talking about specifics.

how to write a financial report for an organization

3. Determine the company's valuation

The company valuation part is one of the most critical sections of your financial analysis report. Why? Because it helps potential investors see the value of investing in your company. 

To determine your business' valuation is to find your company's value. You do this by analyzing your company data, including all the data you have discussed. There are three main ways to do it, i.e., using the following: 

  • Discounted Cash Flow (DCF) Analysis
  • Book Value Analysis
  • Relative Value Method

The goal here is to outline your current assets and liabilities. Moreover, the above techniques help you determine your business' stocks and current value. To do this, most accountants or financial officers use insights from and final average accounts of your balance sheet. 

4. Perform risk analysis

Risk analysis helps potential investors see your company's investment potential. That includes both current and future risks. You can start risk analysis by running a SWOT analysis . 

But remember that your SWOT analysis is microscopic. So for the best results in your valuation, combine it with other techniques. For example, doing a PESTLE analysis . Here's a template you can use for that:

how to write a financial report for an organization

A PESTLE analysis gives you more details and offers two main benefits. First, it helps you understand your marketing environment and other macro factors that affect your company's financials. 

5. Include summaries of financial statements

When writing the financial analysis report of a company, you need to include a brief overview of your company's financial statements. To do this, summarize each component of the 3-statement model:

how to write a financial report for an organization

Let's discuss each of them:

Cash flow statement. Potential investors look at your cash flow statement summary for two reasons. One, it lets them see if you make enough money to settle your debts. Two, it helps them decide whether your company is worth investing in.

Income statement . A summary of this does two things. First, it shows you gaps in increasing operating profit by allowing you to boost sales revenue , reduce cost, or both. It's also an income statement showing how effective your strategies are at the start of your financial year.

Balance sheet. The balance sheet shows your debt coverage and asset liquidity in real time. The difference between assets and liabilities gives you the 'owner's equity.' Here's an example of a balance sheet:

how to write a financial report for an organization

Note that summarizing each of these three components doesn't mean just including tables in your report. Instead, explain what the data means in paragraph form, too.  

6. Summarize the entire report 

The last section of the financial analysis report of a company is a summary. You want to share your final views about the company and your opinion on whether it's a profit or loss. That said, be sure to substantiate all your claims. 

That means having evidence containing factual data, financial accounts, and proven financial theories. You can also include the outlook of the company. That is the type of organization, industry trends, economic growth strategies, and how they'll affect the company. 

In conclusion

By now, you should understand the value of a company financial analysis report and how to write one. Not only does it show you the financial health status of a company, but it's also the smoking gun investors look for before investing in any business. 

To any organization, a financial analysis report is a compass to optimize operational efficiency for growth. It is also a crucial part in portfolio management especially when you need to open your business up to other stakeholders.

Summarising, to write a financial analysis report, you need to: 

Write your company overview, sales forecast, and other essential sections. Once those are out of the way, you can perform company valuation and risk analysis. Then, all that's left is to summarize what was discussed. 

how to write a financial report for an organization

Daryl Bush is the Business Development Manager at Authority.Builders . The company helps businesses acquire more customers through improved online search rankings. He has extensive knowledge of SEO and business development.

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How to Prepare a Financial Report

Last Updated: September 28, 2023 References

This article was co-authored by Alan Mehdiani, CPA and by wikiHow staff writer, Jennifer Mueller, JD . Alan Mehdiani is a certified public accountant and the CEO of Mehdiani Financial Management, based in the Los Angeles, California metro area. With over 15 years of experience in financial and wealth management, Alan has experience in accounting and taxation, business formation, financial planning and investments, and real estate and business sales. Alan holds a BA in Business Economics and Accounting from the University of California, Los Angeles. There are 11 references cited in this article, which can be found at the bottom of the page. This article has been viewed 121,107 times.

Alan Mehdiani, CPA

Completing Your Income Statement

Step 1 List your income for the period covered by your report.

  • If your organization sells both goods and services, you may want to include the income for each separately.
  • Make sure you're listing the gross revenue the organization has earned. You'll deduct expenses to find the organization's net income later on.

Step 2 Determine the cost of goods or services you sold.

  • In the service sector, the costs would include labor and supplies used to provide the service you offer.

Step 3 Compute your gross profit.

  • For example, if you had $20,000 in revenue for the period and $5,000 in costs, your gross profit would be $15,000.
  • In formatting your income statement, you may want to make the gross profit label and amount bold so that it stands out from the other information. If you're creating a full-color document, list the gross profit in green if it is a positive number. Use red for a negative number or loss.
  • Round your numbers to the nearest whole number, rather than using decimals or fractions of a unit.

Step 4 Provide an itemized list of expenses over the course of the same period.

  • Depreciation of fixed assets, such as equipment, is also included in your organization's expenses for the period. Tax departments typically have depreciation tables that will help you figure out the amount of depreciation for the period covered by your income statement. Accounting software also includes tools to help you calculate depreciation.

Step 5 Subtract your expenses from your gross profit.

  • The result of this equation is your net profit for the period covered by the income statement. Label it and make the text bold so that it stands out from the rest. If you're making a full-color income statement, change the color of the amount to green if it is a positive number or red if it is a negative number.

Drafting a Statement of Retained Earnings

Step 1 Determine the current retained earnings balance.

  • To find this amount, look at the organization's previous financial statement. If this is your organization's first financial statement, the amount of retained earnings will likely be 0.
  • If your organization distributes all income to its shareholders or equity partners, the retained earnings balance will be 0. If the organization has a deficit or is "in the red," this balance may be a negative number.

Step 2 List the net income from your income statement.

  • On a full-color Statement of Retained Earnings, you typically would change the font color so that positive amounts are green and negative amounts are red. If you're not drafting a full-color statement, place parentheses around the amount to show that it is negative.

Step 3 Subtract any income distributed to shareholders or equity partners.

  • Include a line on your statement that provides the amount of income distributed to shareholders or equity partners. Put the amount in parentheses or change the font color to red to indicate that this amount is subtracted from the net income.
  • For example, suppose your company had a net income of $20,000 for the period covered by your financial report. Of that amount, $10,000 was distributed to your company's equity partners. That means your company retained earnings of $10,000.

Step 4 Calculate the updated amount of retained earnings.

  • For example, if your company had $300,000 in retained earnings and you retained $10,000 of the net income earned over the period covered by your financial report, your company would now have $310,000 in retained earnings.

Creating a Balance Sheet

Step 1 Format your page into two columns.

  • Using two columns also gives you plenty of room to itemize in each category, so you don't have to use more than one page.
  • At the top of the page, across both columns, label the sheet as a "Balance Sheet" with the name of your organization and the dates for the period the balance sheet covers.
  • Your word-processing or spreadsheet program may have a balance sheet template that will make formatting easier.

Step 2 List assets in the left column.

  • Current assets include things such as cash, accounts receivable, inventory, and supplies. Fixed assets, on the other hand, are things such as real estate, equipment, and anything else that can be used for more than a year.
  • For current assets, the value is typically fairly easy to determine. For fixed assets, you may need to check the organization's last tax return to find a value. The value of fixed assets decreases each year with depreciation.

Step 3 Place liabilities and equity in the right column.

  • Current liabilities include things such as accounts payable, short-term loans, or business credit accounts. Fixed liabilities are liabilities that cannot be resolved in a year, such as mortgages, long-term loans, or employee pension plans.
  • To calculate the owner's equity, you'll need to know how much they've contributed in capital, including the total amount of any stock in the company, as well as the amount of earnings retained by the company. You can get this information from your Income Statement and Statement of Retained Earnings.

Step 4 Total assets and liabilities to balance the books.

  • In particular, review the values you used for the owner's equity. The owner's equity should always equal the total value of the organization's assets minus the total value of the organization's liabilities. If your totals don't balance, you may need to adjust the owner's equity until they do, provided all of your other values are correct.

Writing a Statement of Cash Flows

Step 1 Determine the organization's cash balance at the end of the previous period.

  • Typically, you can get this number from the organization's previous financial report. If this is the first financial report for the organization, you'll have to calculate the starting cash by totaling the organization's cash on hand.
  • "Cash" includes not just currency, but also anything that can be converted to cash in less than a year (known as "cash equivalents"). Cash equivalents include the value of savings accounts, money market funds, or similar accounts the organization owns.

Step 2 List the net income from your income statement.

  • For the purposes of your Statement of Cash Flows, it doesn't matter how much of the net income, if any, was distributed to shareholders or equity partners.

Step 3 Group your cash flows into 3 categories.

  • Operating activities include depreciation of assets, accounts payable, and accounts receivable
  • Investing activities include buying and selling capital equipment, business or website development, and buying marketable securities
  • Financing activities include issuing and redeeming debt, issuing and retiring stock, and paying dividends on stock or distributing income to equity partners

Step 4 Adjust the net income to find the cash provided by operating activities.

  • In accounts receivable and accounts payable, add any amount that occurred during the period covered by your financial report, regardless of whether or not money has exchanged hands.
  • You may have other accounts, such as taxes or payroll, that you would need to adjust income for as well. Taxes or payroll that are owed but have not yet been paid would be added to your cash balance just like the accounts payable balance was.

Step 5 Repeat the same process for investment and financing activities.

  • Indicate a loss or deficit for the period covered by your financial report by either placing the amount in parentheses or changing the font color to red (for full-color reports).
  • If your net cash is a loss or deficit, type "used for" rather than "provided by." For example, if your net cash from financing activities is a $2,400 loss, you would label this amount "net cash used for financing activities."

Step 6 Calculate the cash at the end of the period.

  • Compare your Statement of Cash Flows to your Income Statement. If there is a significant difference between the profits reported and the net cash flow generated, you may want to figure out why. For example, if your organization is relatively new and requires large capital investments, those investments would not appear on your Income Statement all at once.

How Do You Calculate Retained Earnings? . By using this service, some information may be shared with YouTube.

Expert Q&A

Alan Mehdiani, CPA

  • Most accounting software will automatically generate these reports for you based on the data you enter. [22] X Research source Thanks Helpful 0 Not Helpful 0
  • The order of the documents you prepare will change when you compile your final report, depending on your company's policies and where you need to submit the report. For example, if you were submitting your report to the U.S. Securities and Exchange Commission (SEC), you would put the Balance Sheet first, then income statements, then cash flow statements. [23] X Trustworthy Source U.S. Securities and Exchange Commission Independent U.S. government agency responsible for regulating the securities industry, which includes stocks and options exchanges Go to source Thanks Helpful 0 Not Helpful 0

how to write a financial report for an organization

  • Accountants don't necessarily verify the accuracy or completeness of the information provided. If you're a small business owner, check over your data carefully to make sure that your figures are correct before you give them to an accountant or prepare your own financial reports. Thanks Helpful 0 Not Helpful 0

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11 Examples Of Financial Reports You Can Use For Daily, Weekly & Monthly Reports

Financial reports by datapine

Table of Contents

1) What Is A Financial Report?

2) Types Of Financial Reports

3) Annual Financial Report Example

4) Monthly Financial Reports Examples

5) Weekly Financial Report Templates

6) Daily Financial Report Examples

7) Why Do You Need Financial Reports?

8) Challenges Of Financial Reports

9) How To Make A Financial Report?

Regardless of your sector or industry, it’s likely that your finances department is the beating heart of your entire operation. Without financial fluency, it’s difficult for an organization to thrive, which means that keeping your monetary affairs in order is essential.

As a business, you need the reliability of frequent business financial reports to gain a better grasp of the status of your finances, both current and future. In addition to empowering you to take a proactive approach concerning the management of your company’s economy, these tools help assist in increasing long-term profitability through short-term company financial statements.

A robust finance report communicates crucial accounting information that covers a specified period, such as daily, weekly, and monthly. These are powerful tools that you can apply to increase internal business performance. A data-driven finance report is also an effective means of remaining updated with any significant progress or changes in the status of your finances and helps you measure your results, cash flow, and overall profitability.

Here, we will look at these kinds of tools in greater detail, delving into daily, weekly, and annual reports but focusing mainly on monthly financial reports and examples you can use for creating your own, which we will present and explain later in the article alongside their relevance in today’s fast-paced, hyper-connected business world.

What Is A Financial Report?

Financial report example showing the profit and loss status of a company

A financial report or financial statement is a management tool used to communicate the performance of key financial activities efficiently. With the help of interactive KPIs, businesses can ensure steady growth and revenue while staying compliant with law and tax regulations.

As you can see in the example above, created with a professional financial business intelligence solution, a modern finance report can have all the relevant information right at your fingertips, offering the ability to visualize as well as analyze key data; they assist in uncovering fresh insights, spotting key financial trends, identifying strengths as well as weaknesses, and improving communication throughout the organization. We will explore even more examples of monthly statements later in the article.

We live in a data-driven age, and the ability to use financial insights and metrics to your advantage will set you apart from the pack. Online reporting tools to do that exist for that very purpose. To gain a panoramic view of your business’s financial activities, working with an annual, monthly, weekly, and daily financial report template will give you a well-rounded and comprehensive overview of every key area based on your specific aims, goals, and objectives.

Your organization needs these tools to help support certain objectives and enable you to provide useful information to investors, decision-makers, and creditors, especially if you work as a financial agency and need to create an interactive client dashboard . But not only, as it can also support your business in determining the following:

  • If you can effectively generate cash and how that cash is used.
  • To reveal specific business transaction details.
  • To follow the results of your finances so you can identify potential issues that are impacting your profitability.
  • Develop financial ratios that show the position of your business.
  • Evaluate if your company can pay off all of your debts.

Daily reports, however, have a limited impact, as most of the financial KPIs that are used need mid-to-long-term monitoring and do not provide accurate information if analyzed only on a daily basis.

This is why we still mention them and provide examples of what can be tracked and analyzed every day, but for a long-term view, you should take a look at our annual, weekly, and monthly reports. The monthly ones are on top, illustrated with beautiful data visualizations that provide a better understanding of the metrics tracked.

Equipped with financial analytics software , you can easily produce these daily, weekly, monthly, and annual reports. They will provide your company with the insights it needs to remain profitable, meet objectives, evaluate your decision-making processes, and keep everyone in the value chain on track.

Your Chance: Want to test financial reporting software completely free? We offer a 14-day free trial. Benefit from great financial reports today!

Types Of Financial Reports

As stated above, finance statements are fundamental tools for businesses not only to track their performance and report to investors but also to stay compliant with law regulations that obligate them to respond to certain guidelines. That said, there are three major types, and we will cover them in detail below! 

Balance Sheet

A balance sheet is a statement that provides detailed information about a company’s assets, liabilities, and equity. Or in other words, what a company owns, owes, and is invested by shareholders. Balance sheets should portray the bigger picture of a business's financial health during a particular date. There is no mandatory frequency to generate balance sheets; some organizations prepare monthly statements, while others can do quarterly or annual ones. Let’s see each of the elements in more detail below. 

  • Assets : The items your company owns that can provide future economic benefits. This can be from cash to furniture or equipment. 
  • Liabilities : It is basically what your company owes to others. They can be divided into long-term liabilities, such as the lease of your office building or a bank loan, or short-term liabilities, which can be your credit card debt or wages to employees. 
  • Equity : It represents the shareholder’s stake in the company . To calculate the shareholders’ equity, you need to subtract the total liabilities from the total assets. This calculation is based on the general accounting equation formula: Assets = Liabilities + Shareholders' Equity. Equity is used in many different ratios, such as ROA and ROE.

An important note regarding this type of statement is that it should always be balanced, hence the name. Your total assets should always equal the total liabilities and shareholder’s equity. If this is not the case, then there must be something wrong, and it needs to be looked into. Another consideration when it comes to balance sheets is always to compare them to other similar businesses, as they will vary depending on the industry.  

Income Statement

As its name suggests, the income statement portrays the revenue generated from sales as well as all the operating expenses involved in generating that income. Essentially, how much you made and how much you spent. While a balance sheet provides a snapshot of a business's monetary health at a specific point in time, an income statement shows the profitability of a business over an accounting period (month, quarter, or year).  

Also known as profit and loss, this is a fundamental document for any business as it not only tracks performance but it needs to be presented to the fiscal authorities to ensure compliance with law regulations. The income statement focuses on 4 key elements: revenue, expenses, gains, and losses. 

  • Revenues : The revenue can be divided into operating and non-operating. On one hand, the operating one includes all income related to primary activities such as selling a product or service. On the other hand, the non-operating one is related to non-core business activities such as income from interest earned on capital lying in the bank or rental income from the business property. 
  • Gains : Essentially, gains measure the money made from other activities that are non-business related and that are a one-time-only thing. For example: selling an old machine or unused land. 
  • Expenses : All costs related to core operations. Just like revenue, expenses can be divided into primary and secondary. Primary expenses are all the ones linked to the operating revenue, while secondary ones are linked to non-operating revenue. 
  • Losses : All expenses that cost the company to lose assets. They are unusual one-time costs, such as lawsuit expenses.  

The bottom line of the income statement is the Net Income which is basically the profit of the observed period. The net income is calculated with the following formula: Net Income= (Revenue + Gains) - (Expenses + Losses) 

Cash Flow Statement 

Last but not least, the cash flow statement (CFS) portrays how much money entered and left the business during a particular time period. It basically measures how well the company manages to generate cash to pay debt obligations and cover operating expenses. While an income statement can tell you whether a company made a profit, the cash flow can tell you if it made cash. The CFS is a fundamental document for investors as it helps them understand the liquidity of a company and make informed investment decisions. 

Usually, CFS is divided into three main sections: operating activities, investing activities, and financing activities. Let’s see them in more detail. 

  • Operating activities : This refers to any sources or uses of cash from regular business activities such as sales of goods and services, interest payments, salary for employees, and tax payments, just to name a few. 
  • Investing activities: This includes any sources or uses of cash from investments which can include purchases or sales of assets, loans made to vendors, and others. 
  • Financing activities: This includes sources or uses of cash from investors and banks, such as dividends, payments for stock repurchases, and loans. 

Now that we have a better understanding of the definition and types, we are going to take a closer look at financial statements examples of daily, weekly, monthly, and annual reports and their associated KPIs. These examples will help your organization tick over the right way . Let's get started.

Annual Financial Report Example

We are hitting things off with the annual financial report. As its name suggests, these statements monitor the performance of a business for the duration of a year. They can include anything from a balance sheet, income statement, and CFS, as well as predictions for the coming year. Now we will look at an example of an interactive annual dashboard in the shape of an income statement comparing the actual vs. forecasted performance of an organization. 

Annual financial report example of an actual vs forecast income statement dashboard

**click to enlarge**

Financial forecasting is the process of using predictive analytics technologies to generate accurate predictions about future performance. This is done by analyzing a mix of historical and current data and finding patterns that can help organizations make better decisions. 

Our template above, generated with a modern dashboard maker , does just that. It starts by providing detailed information about the three most important metrics in an income statement: revenue, costs, and net profit. Each of them is displayed on a gauge chart with the actual value compared to a forecasted value, paired with the absolute and percentage difference between the two values. This way, users can quickly identify when something is lacking in performance compared to what was expected from it. 

The value of this high-level tool is the fact that it provides three months forecast based on the past 12 months performance. This allows managers to efficiently plan their strategies based on the expected costs and revenues. The dashboard also provides a breakdown of each of these metrics to analyze each element in detail. For instance, by looking at the past 6 months of the revenue breakdown chart, we can see that this business has not been reaching the forecasted amount, which means something might be going on that needs to be looked at. On the other hand, we can see that costs for marketing are slightly higher than expected, which can also be something to look into and see if these costs are justified.

Monthly Financial Reports Examples & Templates

Monthly financial reports are a management way of obtaining a concise overview of the previous month’s status to have up-to-date reporting of the cash management, profit, and loss statements while evaluating future plans and decisions moving forward.

These financial reporting examples offer a more panoramic view of an organization’s economic affairs, serving up elements of information covered in our daily and weekly explanations. By offering the ability to drill down into metrics over a four-week period, the data here is largely focused on creating bigger, more long-term changes, strategies, and initiatives.

These powerful documents offer detailed visual insights into the following areas:

  • Cash management: A comprehensive overview of your organization’s liquidity and existing cash flow situation.
  • Profit and loss: A critical glimpse into your company’s income statement and profits in a number of critical areas of the business.
  • The bigger picture: A business financial report format offers a full overview of the company’s core financing activities over a monthly period, providing data geared towards developing sustainable strategies and improvements that will foster growth and increased profitability.

Coupled with the insights delivered by daily and weekly reports, monthly ones in the form of online dashboards are pivotal to not only gaining an edge on your competitors but also getting a predictive vision that will ensure you meet – and even exceed – your financial targets indefinitely. As a result, your overall efficiency will become flawless, and you’re likely to enjoy healthy growth in your year-on-year profits.

There is a wealth of KPIs to consider when looking at a monthly financial report sample. The best way to explain them in a practical context is by getting visual.

To help you understand how you can benefit from all of this, here are 5 monthly report examples, complete with explanatory insight and a deeper insight into their respective KPIs.

These interactive financial reports examples demonstrate the detail and insight you can gain from your online data analysis if you use it in the right way.

a) Cash Management Financial Report Template And KPIs

Our first example of a financial report provides you with a quick overview of your liquidity and current cash flow situation. Good management of cash flow is fundamental for success since a healthy cash flow means that the company has enough money to pay salaries and debts and invest in growth opportunities. However, bad management can lead to the end of a business since no cash means no operations. This example is critical to keeping your finances flowing across the organization and predicting future outcomes that will help you to stay always ahead of your finances.

Monthly financial report example: cash management dashboard

The first portion of this dashboard examines the current ratio, which is simply the ratio between your current assets and liabilities. This metric demonstrates the flexibility your company has in immediately using the money for acquisitions or to pay off debts.  A really healthy current ratio would be about 2 to ensure your company will be able to pay current liabilities at any time and still have a buffer. Alongside this metric is the quick ratio, which is similar to the current ratio, except it takes into account only the near-cash assets, meaning all assets that you can convert into cash quickly, such as equipment or furniture. This means your quick ratio will always be lower than your current ratio. By monitoring these metrics, you can understand at a quick glance if your business is liquid or not. 

Next, the cash management dashboard goes more in detail into the situation of a business with two financial graphs visualizing the current accounts payable and receivable for a year, this way you can stay on top of your expenditures and money to be collected and avoid having future issues that will affect your liquidity. 

Current ratio: Core indication of a business’s short-term financial health, as well as indicating if you’re promptly collecting Accounts Due.

  • This metric is measured by dividing debt and accounts payable by cash inventory and accounts receivables.

Quick ratio: As mentioned above, this metric only takes into account the short-term assets that you can turn into money within 90 days, like your accounts receivable. The higher the ratio, the healthier the liquidity of your business. Your goal should always be to keep your quick ratio at a minimum of 1,0. 

Accounts payable turnover ratio: This shows how quickly your organization pays off suppliers and other bills. It also shows the number of times your company can pay off the average accounts payable balance during a certain time period.

  • For example, if your company purchases 10 million goods in a year and holds an average account payable of 2 million, the ratio is 5.
  • A higher ratio shows suppliers and creditors that your company is on top of paying its bills.

b) Profit And Loss Financial Reports Examples And KPIs

Moving on with our list of financial reporting templates, the P&L dashboard gives a clear overview of the income statement, from the income earned to the final net profit; the whole is enhanced by relevant performance ratios.

An income statement, also known as a P&L, is one of the most powerful examples as it gives you a detailed snapshot of your company's financial performance and tells you how profitable your business was in a specific period of time.  

Monthly financial report example showing the OPEX, EBIT, income statement, etc

The dashboard above is a perfect example of a financial statement for P&L. First, we see the income statement that starts by calculating the gross profit, which is obtained by subtracting your total revenue from your COGS. Next, we have a list of operating expenses (OPEX) that include sales, marketing, and other general administration costs. The total OPEX is then subtracted from the gross profit to reach the operating profit (EBIT). Finally, the total amount of interest and taxes are subtracted from the EBIT, resulting in the final net profit of the business. By doing these simple calculations, you can quickly see how profitable your company is and if your costs and income are being managed properly. 

Additionally, the dashboard provides a glance at performance percentages of the main metrics of the income statement: gross profit, OPEX, EBIT, and net profit. This can be further utilized to find month-to-month trends in your expenses and prepare ahead of time for months in which your expenses will be higher. 

It is important to consider that an income statement will not tell you more detailed information about your finances, such as how much money your company has in total or how much debt you have. For this purpose, there is another type of document called a balance sheet, and we will see it in more detail in our next financial statement example. 

Operating profit margin (EBIT): It allows your business to monitor how much profit you are generating for each dollar of income. This metric is also referred to as “EBIT” for “earnings before interest and tax.”

  • This metric measures how profitable your business model is and shows what’s leftover of your revenue after paying for operational costs.
  • It doesn’t include revenue earned from investments or the effects of taxes.

Operating expense ratio: This monthly example indicates the operational efficiency of your business through the comparison of operating expenses and your total revenue.

  • Essentially the lower your operating expenses, the more profitable your organization is.
  • These KPIs are particularly helpful in benchmarking your company against other businesses.

Net profit margin: Measures your business’s profit minus operating expenses, interest, and taxes divided by total revenue.

  • It’s one of the most closely monitored financial KPIs. The higher the net profit margin, the better.

COGS: The Cost of Good Sold is the total amount of money it costs you to produce your product or service. If your COGS and your revenues are too close, that means you are not making a lot of gains on each sale. 

  • Separating COGS from operating expenses is a fundamental step, as it will tell you if you are overspending your revenues in operational processes. 

c) Financial Performance Report Template And KPIs

This particular financial statement template provides you with an overview of how efficiently you are spending your capital while providing a snapshot of the main metrics on your balance sheet.

Just like the income statement, a balance sheet is another powerful tool for understanding the performance of your business. As we see in the dashboard below, a balance sheet is divided into three main areas: assets, liabilities, and equity. 

Alongside the balance sheet, the dashboard displays four other important metrics: the ROA, WCR, ROE, and DER. These four KPIs give you an immediate picture of trends in how your company’s assets are being managed. Good management of your assets and healthy equity will bring new investors to your business and will prevent you from facing disasters for unexpected losses, or bankruptcy.  

Monthly financial report template: a balance sheet is a good overview of the assets and debts of your company at a specific moment

Return on assets (ROA): This shows how profitable your businesses are compared to your total assets. Assets include both debt and equity.

  • This is a critical metric to any potential investors because it shows them how efficiently management is using assets to generate earnings.

Return on equity (ROE): Calculates the profit your company generates for your shareholders. It is used to compare profitability amongst businesses in the same industry.

  • This is measured by dividing your business’s net income by your shareholder's equity.

Debt equity ratio (DEB): This metric measures how much debt you are using to finance your assets and operations in comparison to the equity available. It is obtained by dividing the total liabilities by the stakeholder’s equity. 

d) Financial KPI Dashboard And KPIs

This financial report format created with a professional dashboard designer offers a broad overview of your business’s most critical economic activities, operating with KPIs that are developed specifically to answer vital questions on areas such as liquidity, invoicing, budgeting, and general accounting stability. A template that you can apply to almost every business across industries, this incredibly insightful tool is pivotal to maintaining a healthy, continually evolving financial profile. Let’s look at the KPIs linked to this most valuable example.

Financial statements example to calculate working capital and current ratio

Working capital: A key performance indicator focused on financial stability, this metric will help you monitor your performance based on your company's assets and liabilities.

  • In the context of this financial report format, working capital is vital as it will help you accurately gauge your business’s operational efficiency and short-term health.

Quick ratio/acid test: A KPI that offers instant insights as well as results, this metric serves up critical information concerning liquidity.

  • The quick ratio/acid test is worth tracking – by measuring these particular metrics, you’ll be able to understand whether your company is scalable and, if not – which measures you need to take to foster growth.

Cash conversion cycle: Your cash conversion cycle (CCC) is a critical metric for any organization as it drills down into key areas of your company’s operational and managerial processes.

  • Tracking your CCC with visual BI reporting tools is incredibly useful as it provides a quantifiable means of knowing the length of time it takes for your business to convert its inventory investments, in addition to other resources, into cash flows from sales.
  • A steady, consistent CCC is generally a good sign, and if you spot noticeable fluctuations, you should conduct further analysis to identify the root of the issue.

Vendor payment error rate: Every business – including yours – works with third-party vendors or partners, and managing these relationships as efficiently as possible is critical to any organization’s ongoing financial health. That’s where the vendor payment error rate KPI comes in.

  • By gaining an insight into potential errors or efficiencies relating to the payment of your vendors, you’ll be able to improve financial flow and efficiency while nurturing your most valuable professional relationships.
  • If your vendor error rate is high, you will know that procurement inefficiencies exist, and you’ll be able to take appropriate action to improve your processes and avoid potential disputes.

Budget variance: Budgeting is one of the cornerstones of corporate financial health. This powerful KPI from this most critical financial report sample serves to express the difference between budgeted and genuine figures for a particular accounting category.

  • Offering a quick-glance visualization of whether particular budgets are on track in specific areas and departments, this KPI allows you to get a grasp of variances between proposed and actual figures while obtaining the information required to make vital changes in the appropriate areas.
  • Keeping your budget expectations and proposals as accurate and realistic as possible is critical to your company’s growth, which makes this metric an essential part of any business’s reporting toolkit.

e) Financial Statement Example For CFOs

Next, we look into a financial performance report focused on data relevant for CFOs that need to grasp high-level metrics such as revenue, gross profit, operating expenses, net income, berry ratio, EVA, payroll headcount ratio, and, finally, to build a strong team and customer base, satisfaction levels of each. This financial management report example will not only serve as a roadmap for depicting the monetary health of a company but also focus on team management and customer satisfaction, which are not traditional finance-related metrics but are important in this case for every modern CFO. This example shows the YTD until March, but it can also be used as one of our monthly financial statements examples. We will explain the KPIs in more detail below:

A financial report template showing key metrics such as revenue, gross profit, cost breakdown, berry ratio, payroll headcount ratio, etc.

Berry ratio: This ratio is defined between gross profit and operating expenses (costs). This financial indicator is critical when showing if the company is generating a healthy amount of profit or losing money.

  • When calculating the berry ratio, usually external income and interest aren't included, but depreciation and amortization could be, depending on the particularities of your strategy.
  • An indicator over 1 means that the company is making a profit above all expenses, while a coefficient below 1 will indicate that the company is losing money.

Economic value added (EVA): Referred to as the economic profit of a company, EVA is a critical element to include in any finance report template as it will show the surplus profit over the WACC (weighted average cost of capital) demanded by the capital market.

  • By gaining insights into the potential surplus and how profitable a company's projects are, the management performance can be reflected better. Moreover, it will reflect the idea that the business is profitable only when it starts to create wealth for its shareholders.
  • Succinctly speaking, the financial statement should include EVA as it will show how much and from where a company is creating wealth.

Cost breakdown: This particular metric is extremely important in any finance department since costs are one of the financial pillars of an organization, no matter how large or small. Every organization needs to know where the costs are coming from in order to reduce them and, consequently, positively affect performance.

  • If you see that most costs come from administrational activities, you should consider automating tasks as much as possible. By utilizing self service analytics tools , each professional in your team will be equipped to explore and generate insights on their own without burdening other departments and saving countless working hours.
  • Generally, costs should not be looked upon purely on the basis of black and white. If sales and marketing cause cost increment, maybe they also deliver high volumes of income so the balance is healthy and not negative.

Satisfaction levels: C-level managers need to prepare financial analysis reports with satisfaction levels in mind. These indicators are not purely financial, but they do influence economics and can cause potential bottlenecks.

  • If the financial team has a lower satisfaction level, you need to react fast in order to avoid potential talent loss that can cause the company serious money. Keeping the team satisfied by conducting regular feedback talks, and offering career progression and competitive salaries, for example, can only affect the business in positive ways since the motivation will rise as well as the quality of the working environment. In this case, you can also connect to an HR dashboard and follow the team's performance and satisfaction levels in more detail.
  • If customers are unsatisfied, it can also cause damages from outside your team that can, consequently, influence financial performance. For this reason, customer service analytics should also be an important aspect to be covered in your CFO report .

The above example of financial statement is not only focused on pure numbers, as you can see, but also on the human aspect of team and customer management that every modern CFO needs to take into account in order to benefit strategies and deliver economic growth.

f) Financial Report Template For Operating Expenses

Last but not least, on our list of monthly financial statement examples, we have a template that focuses entirely on operating expenses analysis.  Operating expenses also referred to as OpEx, are all expenses that companies incur through their day-to-day operations. Such as rent, equipment, inventory, salaries, insurance, materials, marketing, sales, and much more, depending on the industry. It is fundamental for businesses to track their OpEx closely and regularly as they directly affect profitability. An organization that manages to keep its OpEx at a minimum while still maintaining profitability and efficiency stands to gain a massive competitive advantage. 

Our example below will help you do just that by providing a complete overview of the development of your OpEx on a month-to-month basis. Let’s explore it in detail below. 

Financial report for operating expenses analysis

* *click to enlarge**

The value of this template lies in its level of detail. Traditional income statements track all OpEx together without differentiating between fixed and variable ones. Making it harder to extract deeper conclusions from the data. Our OpEx report above differentiates fixed and variable expenses and shows the monthly development of both compared to the performance of the previous year. This way, users can extract valuable conclusions to improve their strategies and overall financial performance. For instance, by looking at the OpEx development chart on the top, we can see that, overall, both fixed and variable expenses are higher compared to the benchmark. This can be because the company is producing more goods and services, which would result in higher costs or something else that needs to be looked into in more detail. 

To do so, you can take a look at the operating ratio and net profit margin development chart. These are the success indicators that will help you understand if your cost-optimization strategies are paying off. There, we can observe a positive development in previous months with a decrease in the last observed period. Again, this could either be expected or something to be alarmed. It is important to take a deeper look into the data to ensure no big insights remain untapped. 

If you are still feeling a bit lost about the KPIs shown in this example, let’s talk about them in detail below. 

  • Variable expenses : These are costs that are directly related to a business’s production levels. Meaning they can increase or decrease regularly, hence, the name variable. They include costs such as raw materials, labor costs, distribution and shipping, packaging, and sales commissions, among others. It is important to note that variable expenses can not be compared to any other company as they vary from industry to industry. 
  • Fixed expenses : As its name suggests, these are all expenses that need to be mandatorily paid every month, quarter, or year. They are not subjected to the production level but more to the functioning of the business. These include salaries, insurance, rent, and taxes, just to name a few. 
  • Operating ratio : This KPI shows your operating expenses as a percentage of the total revenue. It shows the ability of an organization to keep costs low while generating revenue. This means the lower the ratio, the more profitable the organization is.

Weekly Financial Report Templates And KPIs

A weekly financial statement serves to help you monitor all your short-term financial activities in weekly increments. It should be created and reviewed each week and provides a comprehensive look at the short-term performance of your business.

Now we will take a look at some financial statements examples to get a clearer picture of what can be tracked in weekly intervals.

a) Operating Cash Receipts, Disbursements, Balance

Part of a business’s budgeting process may include cash receipts and disbursements, which use actual data for cash collection to design a budget or create income statements, for example. A sample financial report on a weekly basis can help companies gain insights from accurate reporting based on using cash receipts and disbursements. Metrics and KPIs can include:

Cash flow: indicates the changes in cash versus its fixed counterparts, such as exactly where cash is used or generated during the week.

  • Operating activities: measures a business’s operating cash movements, whereby the net sum of operating cash flow is generated.
  • Financing activities: tracks cash level changes from payments of interest and dividends or internal stock purchases.
  • Investing activities: tracks cash changes derived from the sale or purchase of long-term investments, like property, for example.

Operating activities: indicated any activities within a business that affect cash flows, such as total sales of products within a weekly period, employee payments, or supplier payments.

  • Direct method: This metric obtains data from cash receipts and cash disbursements related to operating activities. The sum of the two values = the operating cash flow (OCF).
  • Indirect method: This metric uses the net income and adjusts items that were used to calculate the net income without impacting cash flow, therefore converting it to OCF.

Gross profit margin: This enables your business to measure and track the total revenue minus the cost of goods sold, divided by your total sales revenue.

  • This KPI is a crucial measurement of production efficiency within your organization. Costs may include the price of labor and materials but exclude distribution and rent expenses.
  • For example, if your gross profit margin were 30% last year, you would keep 30 cents out of every dollar earned and apply it towards administration, marketing, and other expenses. On a weekly basis, it makes sense to track this KPI in order to keep an eye on the development of your earnings, especially if you run short promotions to increase the number of purchases. Here is a visual example:

Weekly financial report example showing the gross profit margin in a gauge chart

b) Any Generated Current Receivables

Weekly financial reports can help businesses stay on top of invoicing, billing procedures, cash basis of accounting, and accounting records, and ensure that they don’t fall behind on being paid for services and goods that are owed to them by customers or suppliers. Weekly report metrics and KPIs include:

  • Days sales outstanding (DSO): This measures how fast your business collects money that you’re owed following a completed sale. DSO = (Accounts receivable/total credit sales) x number of days in the period.
  • DSO vs. best possible DSO: Aligning these two numbers indicates the collection of debts in a timely fashion. Best possible days sales outstanding = (Current receivables x number of days in a week) / weekly credit sales.
  • Average days delinquent: Indicates how efficient your business processes are in your ability to collect receivables on time. ADD= Days sales outstanding – Best possible days sales outstanding

Top Daily Financial Report Examples And KPIs

A daily financial report is a method to track the previous day’s activities that have an impact on your accounting status but are not necessarily a strict financial metric. It can keep you apprised of all the requisite data management used to track and measure potential errors, internal production, revenue loss, and receivables' status.

As we mentioned above, these ones provide a limited vision, but you can use the examples below to see how some daily actions on problematic factors can impact your final results.

a) Tracking Potential Staff Errors

Maintaining an efficient, productive work environment and ensuring that you can identify any employee discrepancies or issues is critical to being proactive about business growth. Monitoring employees working hours and productivity levels can help you detect potential staff errors quickly, control these errors, and avoid negative impacts on your financial results at the end of the day and, ultimately, the month.

Real-time management live dashboards offer clear visuals regarding employee management processes with the following metrics and KPIs:

Organizational performance: These are key metrics for tracking and evaluating some factors impacting your performance.

  • Employee overtime: overtime per employee = total overtime hours / FTE
  • Absenteeism: Number of employees absent today

Work quality: These metrics help companies determine the quality level of their employees’ work performance.

  • Amount of errors
  • Product defects

Work quantity: These metrics indicate employee performance related to quantity, such as sales figures or the number of codes a programmer can create in a given amount of time. Quantity does not, of course, mean quality, but on monitored daily, it can reveal bottlenecks or under-production problems.

  • Sales numbers: the number of client contacts, the number of calls an employee makes, and the amount of active sales leads.
  • Units produced: lines produced during coding, number of keys a nurse receptionist can hit per minute, etc.
  • Customer handling time: how many customer calls are answered during a specific time period, for example.

b) Measure Revenue Loss & Receivables

By tracking staff errors, you can track the money it costs your company (having a problem in production, finding the problem, and fixing it), which will inevitably end up in your financial statements as the money you lost. Tracking revenue loss can be especially beneficial for those companies with customer accounts or recurring income. A daily record helps businesses quickly monitor revenue-related factors so that they can increase their earnings. Revenue loss can also originate from one-time purchases, customers who move to your competitor, or customers who move out of the area. Metrics used to measure these factors can include: 

Accounts receivable turnover ratio: This measures the number of times that your business is able to collect average accounts receivable and indicates your effectiveness in extending credits. Here is a visual example:

Daily financial report example showing the accounts receivable turnover on a pie chart

  • A low accounts receivable turnover ratio basically indicates that you might need to revise your business's credit policies to collect payments more quickly.

Additional metrics you can monitor on a shorter time frame, such as daily, are as follows:

  • Number of daily transactions
  • Average gross margin
  • The average cost per order

You can also be more specific about your revenue loss: categorizing where you lost what a good practice to identify which parts of your business management reporting practices have important room for improvement is. Tracking metrics like the top 10 products generating the most revenue or, on the contrary, the top 10 products generating the worse revenue will tell you a story about what needs more attention.

The revenue loss can also come from discounts or sales, for example. Monitoring on a daily basis which promotions are getting “too” popular can help you stop it before it generates more revenue loss than revenue growth that was supposed to create.

A daily, weekly, and monthly record help communicate the ongoing narrative of your company's economic processes, strategies, initiatives, and progress. As you can see, this form of an analytical report in the finance industry is an undeniably potent tool for ensuring your company’s internal as well as external financial activities are fluent, buoyant, and ever-evolving.

Why Do You Need Financial Reports?

Why do you need financial reports?: 1. Financial performance tracking, 2. Tracking errors, 3. Showing financial condition, 4. Debt management, 5. Staying compliant with tax laws

We saw some powerful financial statement templates to empower your business, but before finishing our journey through these tools, we are going to show you some of the main ways in which your business could benefit from them. As we mentioned a few times through this article, interactive reports created with professional business analytics tools offer a clear snapshot of your business’s financial health, and they will give you the answers you need to plan strategies and tackle any issues that might arise with your finances. Here are the top 5 benefits. 

  • Performance tracking: If you are a loyal reader of this blog, then you know the importance of relying on data for business success. By using modern financial performance reports, CFOs, and other relevant stakeholders can have a quick and accurate snapshot of all areas of a business. This will help them make more informed decision-making as well as plan strategies and forecast future results to find growth opportunities. 
  • Mitigating errors: When we are talking about finances, every detail counts. Using inaccurate statements can not only damage your business’s profitability but can also expose it to legal issues if any discrepancies are found in your numbers. Many BI finance tools in the market ensure accurate reporting with the latest data available. This way, you will be able to constantly monitor the performance of your finances in every area and mitigate any errors before they become bigger issues.  
  • Showing financial condition to investors and stakeholders: If you have investors or you are looking for potential ones to expand your business, then a report showing a snapshot of your business performance will be a fundamental tool. On one hand, it will help you show your investors where their money went and where it is now, and on the other, it will show potential new investors or other relevant stakeholders that your business is worth their money.
  • Debt Management: As we mentioned in one of our examples of financial statements, wrong debt management can damage a business to the point of no return. Investing in innovative BI solutions to generate professional statements that contain a detailed balance sheet of your assets and liabilities can help you understand your liquidity and manage your debts accordingly.  
  • Staying compliant with tax laws: Last but not least, one of the most important benefits of using finances reporting is to stay compliant with the law. No matter the size of your company, you have to pay taxes, and tax agents will use your financial documents to make sure you are paying your fair amount. By keeping track of this information in a professional financial status document, you will be able to reduce your tax burden and avoid any discrepancies in your numbers. 

Common Challenges Of Financial Statements

While these tools are fundamental to the growth and correct functioning of any type of organization that profits, it is still a hard process that has limitations. Being aware of the challenges coming your way can help you tackle them and be prepared to generate accurate financial statements. Let’s look at some of these limitations. 

  • Manual work : Manual tasks are the enemy of a successful reporting process. Especially with finances, where you need to make important decisions all the time, the need for real-time reporting is critical. However, there are still many companies that build their statements manually, which means by the time it is ready, the data is no longer useful. With that issue in mind, several automated reporting tools have emerged to help mitigate the manual tasks and dedicate more time to actually analyzing.  
  • Manage various data sources : Data quality is the basis of a successful reporting process. When it comes to generating finance reports, it is necessary to gather data from various sources, which can be a tedious job. The issue becomes even bigger when you want to process and unify all of this information for analysis. Luckily, modern management reporting tools allow you to connect various data sources and visualize them all together in interactive dashboards with just a few clicks.  
  • Data literacy: Data literacy refers to the ability to understand, communicate and work with data. It represents a challenge for any reporting process, but especially when it comes to finances, as the numbers and concepts are more complex. To prevent literacy levels from becoming a bigger issue, it is recommended to assess the level of knowledge across employees and departments and provide financial and data-related training for anyone who needs it. This way, you’ll ensure everyone is on the same page and has the ability to integrate analytical practices into their daily operations. 
  • Accessibility and collaboration : It is very likely that an organization’s financial goals will be linked across departments and teams. Achieving these goals successfully requires a level of collaboration that is harder to achieve, especially when it comes to sharing reports and building discussions around them. If these documents are not properly shared, it is very possible that discrepancies will be found in the strategies, and that can damage the end goal. To avoid this, organizations need to rely on analytical tools with an online environment that allows them to easily share relevant information among different stakeholders in a fast and efficient way.  
  • Adapt to regulatory changes : Paired with the challenges coming with the data management process, there are also regulatory changes that happen all the time, and that can present a challenge for organizations. Businesses need to ensure their financial reports are rigorously complying with regulations as well as be flexible and responsive to any new changes that might arise. 
  • Security : With cyberattacks and data breaches becoming an increasing concern for businesses, keeping financial data secure becomes a major challenge for organizations. To prevent your information from ending up in the wrong hands, it is necessary to implement various security measures such as access controls, password-protected reports, and other things.  

How To Make A Financial Report?

How to make a financial report: tips and best practices by datapine

To create a comprehensive financial statement, you need to keep these points in mind:

1. Define your mission and audience

No matter if you're a small business or a large enterprise, you need to define your goals clearly and what you are trying to achieve with the report. This can help both internal and external stakeholders who are not familiarized with your company or finances. If you're creating an internal report just for the finances department, it would make sense to include financial jargon and data that, otherwise, would create challenges for external parties to follow.

By defining the mission and audience, you will know how to formulate the information that you need to present and how complex the jargon will be. Create a draft of the most important statements you want to make, and don't rush with this step. Take your time; the numbers, charts, and presentations come later.

2. Define goals and targets

Once you’ve defined your mission and the audience of your reports, it is time to set some goals and targets to use as benchmarks to measure the success of your financial strategies. This is an important step because goals help organizations plan their expected growth and improve based on that. 

That said, there are a few steps you should follow to ensure you are setting accurate objectives. For starters, your goals and targets should be long and short-term but, most importantly, attainable. Many businesses fail in their analytical efforts because they take industry benchmarks, for example, as the end goal for their own performance. Now, while industry values are good benchmarks and they shouldn’t be discarded entirely, they should still be looked at with a grain of salt. Be honest with yourself and with the current scenario of your business, and define targets that are realistic and attainable. Consider your budget, your business size, your historical performance, and other elements to build efficient goals that are measurable in time.  

3. Identify your metrics

In this step, you need to identify the key performance indicators that will represent the financial health of your company and help you measure the goals you defined in the previous step. Depending on the selected metrics, you will need to present the following:

Balance sheet: This displays a business’s financial status at the end of a certain time period. It offers an overview of a business’s liabilities , assets, and shareholder equity.

Income statement: This indicates the revenue a business earned over a certain period of time and shows a business’s profitability. It includes a net income equal to the revenues and gains minus the expenses and losses.

Cash flow statement: Details a business’s cash flows during certain time periods and indicates if a business made or lost cash during that period of time.

These financial statements will help you get started. Additionally, you might want to consider specific KPIs and their relations. Gross profit margin, operating profit margin, operating expense ratio, etc., all have different applications and uses in a relevant data story. Take your time to identify the ones you want to include in order to avoid multiple repeats afterward.

4. Choose the right visualizations

Continuing on our previous point, after specifying the financial statement and metrics you want to add, it's time to include visuals. This point is important since the average reader will struggle to digest raw data, especially if you work with large volumes of information.

The type of chart is important to consider since the visuals will immediately show the relationship, distribution,  composition, or comparison of data. Therefore, the type of charts will play a significant role in your reporting practice. Here is a visual overview that can help you identify which one to choose:

Overview to use the right data visualization types for comparisons, compositions, relationships and distributions

In the overview, we can see that scatter plots and bubble plots will work best in depicting the relationship of the data, while the column chart or histogram is the distribution of data. To learn more about a specific chart and details about each, we suggest you read our guide on the top 30 financial charts .

5. Apply design best practices 

By now, you have the planning of your report ready. The next step is to bring everything to life by generating the actual report. Choosing the right chart type is the first step, but there are other design best practices that should be followed to ensure the process is as efficient as possible. 

The first and most important best practice is to avoid overcrowding your reports. Putting too much information in them will make everything confusing and harder to understand, which can translate into poor strategic decisions for the future. Prioritize the most important KPIs that enable you to tell a story about your performance as well as some context to make sense of the information. Arrange your charts in a way that makes sense, and that helps the audience understand everything. 

Another important design best practice is to think carefully about colors. While it is very tempting to use a different color for every KPI, it is not recommended to do this. You should stick to only a few colors that are not too strong. You can even use different shades of the same color to differentiate data points, as you saw in our examples section. It is also a good practice to use your business’s color palette to make it more personalized and familiar to the audience. 

6. Use interactive features 

Traditionally, finance reporting has been a static practice that mainly contained outdated data that was not entirely valuable. As you’ve learned throughout this post, this is no longer the case. Today, these reports contain a mix of real-time and historical insights that enable decision-makers to extract insights and act on them as soon as they occur. Part of the success of this modern approach relies majorly on interactivity. That is why our next best practice or tip is to integrate interactive features into the process. 

Tools such as datapine offer a range of interactive functionalities to integrate into your financial reports. For instance, you can add different tabs with extra information and have it all together in a single report. This way, you’ll avoid overcrowding the report or having to generate multiple different ones. Plus, if you need to visit another tab quickly, you have the option to link that tab to a specific KPI and be transferred to it just by clicking on the chart. 

Another interactive feature that makes the reporting process way more efficient is drill downs and drill throughs. They basically enable users to go into lower or higher levels of data, respectively, without the need to jump into another chart. For example, if you are looking at revenue by country but want to dig deeper into a specific country, you can click on it, and the chart will adapt to show revenue by city of that country. The same thing can be done upwards to look at revenue by continent. 

7. Use modern software & tools

To be able to manage all your finance reports effectively, you will need professional tools. The traditional way of reporting through countless spreadsheets no longer serves its purpose since, with each export, you manage historical data and don't have access to real-time insights. The power of a modern dashboard builder lies within the opportunity to access insights on the go, in real-time, and with refreshing intervals that you can set based on your needs.

Moreover, professional dashboard software comes with built-in templates and interactivity levels that traditional tools cannot recreate or offer in such simplicity but, at the same time, a complexity that will make your report more informative, digestible, and, ultimately, cost-effective.

To manage financing performance in comparison to a set target, you can also use a modern KPI scorecard . That way, you will not only monitor your performance but see where you stand against your goals and objectives.

8. Automate your financial management report

Automation plays a vital role in today's creation of company financial reports. With traditional reporting, automation within the application is not quite possible, and in those scenarios, professionals usually lose a lot of time since each week, month, quarter, or year, the report needs to be created manually. Automation, on the other hand, enables users to focus on other tasks since the software updates the report automatically and leaves countless hours of free time that can be used for other important tasks.

For example, you can schedule your financial statement report on a daily, weekly, monthly, or yearly basis and send it to the selected recipients automatically. Moreover, you can share your dashboard or select certain viewers that have access only to the filters you have assigned. Finally, an embedded option will enable you to customize your dashboards and reports within your own application and white label based on your branding requirements. You can learn more about this point in our article, where we explain in detail the usage and benefits of professional white label BI and embedded analytics.

9. Stay Compliant

We already mentioned the regulatory side of financial reporting a couple of times throughout this post, but it is such an important step that we could not leave it out of this list. That is because companies that fail to meet the governmental requirements for their finance statements can face critical consequences that will throw all other efforts down the drain. 

In this sense, there are different requirements depending on the country or continent. In the USA, companies need to adhere to the GAAP guidelines, which basically provide a set of rules and standards for entities to prepare their reporting in a consistent and transparent way.  On the other side, countries from the EU need to follow the IFRS rules. Which obligates listed companies to follow a set of rules to prepare their statements. The IFRS guidelines provide a common language used by more than 100 countries. Through that, UE regulators can compare organizations across “international boundaries.”

10. Learn from the process

This might sound like an obvious step, but it is often overlooked. Once you are done generating your financial report, you should gather internal feedback from employees and any other relevant users and learn from the process. There is no secret recipe for the perfect finance report. Each company has different needs and resources. Therefore, tweaking little details to make the process efficient and easier for everyone involved can reap significant rewards in the future.  

As you’ve learned through this list of best practices, these tools are more digestible when they are generated through online data visualization tools that have numerous interactive dashboard features to ensure that your business has the right meaningful financial data. Finally, these statements will give your business the ability to:

  • Track your revenue, expenses, and profitability.
  • Make predictions based on trusted data.
  • Plan out your budget more effectively.
  • Improve the performance of your processes.
  • Create fully customizable reports.

Comprehensive Reports For The Complete Financial Story Of Your Business

We’ve explained how to write a financial report, examined the dynamics of a monthly, daily, and weekly report templates, and explored examples relating to specific areas of the business with their related KPIs as well as some key benefits. Now, it’s time to look at the concept as a whole.

Financial reporting practices help your business obtain a clear, comprehensive overview of where your company is at and where you should plan on going. When augmented with crisp, easy-to-read visualizations in the form of financial dashboards , your business can quickly comprehend and accurately measure critical components of your status over specified time periods.

A financial statement template, as we presented above, can also help you answer critical questions, such as What can your business do with an extra $500k in cash? Will you be able to borrow less money, invest in new technology, or hire trained personnel to improve your sales?

Using datapine’s seamless software, your business will be able to see the full financial story of your company come to life and have a better grasp of your future path.

When it comes to your business’s finances, shooting in the dark or using antiquated methods of analysis or measurement will not only stunt your organizational growth but could lead to mistakes, errors, or inefficiencies that will prove detrimental to the health of your business. Data-driven dashboard reporting is the way forward, and if you embrace its power today, you’ll reap great rewards tomorrow and long into the future.

Do you want to improve your business’s financial health today? Try our 14-day trial completely free!

5 Best Practices and Tips for Creating Robust Financial Reports

A financial report is a crucial document that provides a comprehensive overview of an organization's financial performance, health, and strategic direction. It serves as a tool for stakeholders, including investors, creditors, management, and other interested parties, to assess financial stability and viability.

Writing a great financial report is not only about presenting numbers; it's about effectively communicating the organization's financial story. In this blog, we will delve into proven tips and best practices to help you know how to report and convey your organization's financial health. 

Investopedia says that financial statements offer  a condensed view of a company's financial well-being, offering valuable insights into its performance, operational activities, and cash flow.

Tips for Writing a Financial Report

Here are some tips to help you write an effective financial report:

1. Understand Your Audience

  • Identify Stakeholders: Determine who will read your report—investors, executives, or regulators and customize the content according to their financial expertise and interests.
  • ‍ Gauge Financial Literacy: Assess your audience's financial knowledge to balance technical jargon and plain language.
  • ‍ Address Specific Concerns: Understand the unique concerns of your audience—investors may focus on profitability while regulators prioritize compliance.
  • Customize Format: Adjust the report's format, visuals, and depth of analysis to meet the preferences and expectations of your target readers.
  • Provide Context: Offer historical context and industry benchmarks to help readers grasp the significance of financial data and trends.

2. Use Clear and Concise Language

  • Simplify Complex Concepts: Translate intricate financial terminology into straightforward language to ensure easy comprehension by the audience.
  • Avoid Ambiguity: Write with precision and clarity, leaving no room for misinterpretation or confusion regarding financial data and analysis.
  • Trim Redundancy: Eliminate unnecessary words or repetitive phrases, promote brevity, and enhance the report's overall readability and impact.
  • Define Acronyms: Clearly define available acronyms and abbreviations to enhance understanding, especially for those unfamiliar with finance-specific terms.
  • Structure Information: Organize content logically, present financial insights in a step-by-step manner, and enable easier digestion and assimilation of information.

What is financial reporting for small businesses? 

Financial reporting for small businesses involves creating and presenting financial statements, such as income statements, balance sheets, and cash flow statements, to communicate their financial performance and position to stakeholders. To know more about its importance, read our blog: Why is financial reporting important for small businesses? 

3. Organize Information Effectively

  • Logical Segmentation: Arrange financial data into sections or categories, such as income statements, balance sheets, and cash flow statements, for easy navigation and understanding.
  • Headings and Subheadings: Use clear, descriptive headings to guide readers through different parts of the report. This approach enhances comprehension and facilitates quick information retrieval.
  • Chronological Flow: Present data and analysis chronologically or sequentially to help readers follow the financial information from past to present performance.
  • Visual Aids: Utilize graphs, charts, and tables to illustrate key financial points, aiding in visual interpretation and reinforcing the organized structure of the report.
  • Summarize Key Points: Provide a concise summary or executive summary at the beginning or end, consolidating the most critical financial insights for a quick overview.

Tips for Writing a Financial Report

4. Highlight Key Financial Metrics

  • Define Key Metrics: Clearly define and explain the essential financial metrics relevant to the report, ensuring the audience comprehends their significance.
  • Emphasize Trends: Showcase trends and patterns in key metrics over time to allow readers to assess financial performance and make informed decisions.
  • Comparative Analysis: Compare key metrics with industry benchmarks or previous periods to provide context and evaluate the company's standing in the market.
  • Visual Representation: Present key financial metrics using visual aids like charts or graphs to enhance visibility and facilitate a quick grasp of the data.
  • Interpretation and Implications: Provide insights into what the key metrics imply for the organization, its financial health, and potential future strategies.

5. Include Visual Aids for Clarity

  • Visual Variety: Employ diverse visual aids such as graphs, charts, tables, and infographics to convey financial information in an engaging and easily digestible manner.
  • Clear Labels and Titles: Ensure all visuals have descriptive titles and labels, clarify what they represent, and aid in proper interpretation.
  • Data Comparison: Utilize visual aids to compare financial data across different periods or benchmarks against industry standards, enhancing the depth of analysis.
  • Incorporate Color and Design: Use colors strategically to highlight important data points and trends to enhance the overall appeal and readability of the report.
  • Align with Content : Integrate visuals seamlessly with the report's narrative, placing them in relevant sections to reinforce the information being conveyed.

Best Practices for Financial Reporting

Here are some best practices for financial reporting:

1. Follow a Standard Structure

  • Consistency: Adhere to a consistent reporting structure over time, making it easier for stakeholders to navigate and compare financial reports.
  • GAAP Compliance: Ensure alignment with Generally Accepted Accounting Principles (GAAP) to maintain transparency and reliability in financial statements.
  • Section Clarity: Clearly label and organize key sections, including balance sheets, cash flow statements, and others to simplify comprehension.
  • Footnotes and Disclosures: Include comprehensive footnotes and disclosures to offer additional context and explain any complex accounting treatments.
  • Cross-Referencing: Cross-reference financial data within the report and allow readers to trace figures and gain a holistic view of financial performance.

2. Ensure Accuracy and Precision

  • Data Verification: Verify financial data through rigorous review processes to eliminate errors, ensuring the utmost accuracy in the reported figures.
  • Reconciliation: Reconcile financial information across various documents and sources to guarantee consistency and precision in the reported numbers.
  • Audit Trails: Maintain clear audit trails that document the data collection, validation, and reporting process while enhancing accuracy and facilitating auditing.
  • Scrutinize Calculations: Double-check calculations and mathematical formulas to prevent computational errors and maintain precision in financial statements.
  • External Review: Seek independent reviews or audits from qualified professionals to validate the accuracy of financial data and reporting processes.

Best Practices for Financial Reporting

3. Provide Context and Analysis

  • Interpret Data: Go beyond raw numbers by offering insightful analysis and explanations, helping readers understand the meaning and implications of financial data.
  • Historical Context: Provide historical context to highlight trends and changes over time, aiding in a deeper understanding of financial performance.
  • Industry Comparisons: Benchmark financial results against industry peers, enabling stakeholders to assess the company's competitive position.
  • Forward-Looking Insights: Offer forecasts and future-oriented analysis to guide stakeholders on potential financial developments and strategies.
  • Non-Financial Factors: Integrate non-financial information, such as market conditions and operational challenges, to comprehensively view the business environment.

4. Regularly Review and Update Content

  • Timely Revisions: Periodically review and update financial content to reflect the most recent and accurate information, ensuring relevance and reliability.
  • Regulatory Compliance: Stay current with changing regulatory requirements, modifying financial reporting accordingly to maintain compliance and transparency.
  • Reflect Business Changes: Update the report to mirror changes in the business structure, strategies, or operations, aligning financial reporting with the evolving organization.
  • Stakeholder Feedback: Incorporate feedback from stakeholders to improve the report's clarity, relevance, and alignment with their informational needs.
  • Continuous Improvement: Implement a feedback loop for continual improvement to allow ongoing enhancements based on evolving reporting standards and stakeholder expectations.

5. Comply with Regulatory Requirements

  • Stay Informed: Stay updated on all relevant financial regulations, ensuring compliance with the latest standards set by governing bodies and authorities.
  • Regulatory Analysis: Conduct a thorough analysis to understand the specific financial reporting requirements applicable to your industry and jurisdiction.
  • Expert Consultation: Seek guidance from legal and financial experts to interpret and implement regulatory requirements accurately within financial reporting practices.
  • Periodic Compliance Checks: Regularly audit and verify compliance with financial regulations, identifying any deviations and promptly addressing them to mitigate risks.
  • Transparency and Disclosure: Maintain transparency by clearly disclosing adherence to regulatory guidelines within financial reports, instilling confidence among stakeholders.

The technological advancements have brought about a transformation in financial reporting. Advanced technologies empower businesses with enhanced decision-making capabilities by providing clear and accurate reports. However, as financial data becomes more abundant and intricate, there is a growing need to ensure data accuracy and integrity. Any inaccuracies or inconsistencies in financial reports can lead to severe consequences, such as legal repercussions and damaged reputations. This is where the need for an external partner arises. These partners offer specialized expertise and ensure customized solutions to overcome the above difficulties. 

At Invensis , we help businesses with tailored solutions that align with business's specific needs in interpreting financial data and also help them navigate the intricacies of financial reporting. We also assist businesses to leverage our expertise and resources for comprehensive financial reporting. Contact us to foster financial transparency, efficiency, and strategic growth with our financial analysis and reporting services .

how to write a financial report for an organization

Rick is a highly accomplished finance and accounting professional with over a decade of experience. Specializing in delivering exceptional value to businesses, Rick navigates the complexities of the financial realm easily. His expertise spans various industries, consistently providing accurate insights and recommendations to support informed decision-making. Rick simplifies complex financial concepts into actionable plans, fostering collaboration between finance and other departments. With a proven track record, Rick is a leading writer who brings clarity and directness to finance and accounting, helping businesses confidently achieve their goals.

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How to make financial statements for small businesses.

How to Make Financial Statements for Small Businesses

Information is power. As long as you can make sense of that information. As a business owner, you’ll want to track your financial progress to make informed business decisions about your future. And that involves understanding cash flows, operating expenses, and net profit, all found in your financial statements.

Even if you delegate the bookkeeping to a professional, and don’t prepare financial statements yourself, you’ll need to know what your CPA is talking about when they walk you through your balance sheet.

In this article, you’ll learn about the 3 principal financial statements—income statements, balance sheets, and cash flow statements—and how to interpret them.

Here’s what we’ll cover: Income Statement (Profit and Loss Statement) Balance Sheet Difference Between an Income Statement and a Balance Sheet Cash Flow Statement Financial Statements Are Fundamental

NOTE: FreshBooks Support team members are not certified tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks. If you need tax advice, please contact an accountant in your area .

Income Statement (Profit and Loss Statement)

An income statement shows a company’s financial performance by revealing whether it’s made a profit or a loss. 

Without an income statement, you’d be in the dark about the profitability of your business. An income statement is also known as a profit and loss statement, profit and loss account, or P&L.

The reporting period for an income statement is typically one fiscal year.

Go With The Cash Flow

What Goes on an Income Statement?

Let’s now jump to the format of an income statement.

In most cases, it will look something like this:

Comparative income statement example

Now, let’s dig into what an income statement covers.

Revenues (or Sales)

This is the top line on your income statement. It’s the total amount for the year of all the things or services you sold. But if you’ve given any discounts, you’ll reduce your sales by the discount amount.

For example, if you sold $100 in t-shirts but offered a 10% discount as a Black Friday incentive, you would record $90 as your net sales amount. 

Cost of Goods Sold (or Cost of Sales)

These are the expenses directly related to the sales you’ve made. Suppose you’re selling electronics. The cost of goods sold is the cost of the electronics you sell within a financial year. And this is important. It’s not the cost of the electronics you bought in the year. 

In a service-related business, a consultancy, for example, the cost of sales is often termed direct costs. Hence, you’ll include costs directly related to your service.

Gross Profit

Gross profit is the profit that results directly and specifically from the trading activity of buying and selling. You calculate the gross profit by subtracting the cost of goods sold from revenues. 

Selling, General, and Administrative Expenses

All other expenses like salaries, rent, or travel merely facilitate the main trading activity of your business and are often categorized under selling, general, or administrative (SG&A) expenses.

You can have as many categories of SG&A expense as is necessary and helpful for running your business. Some of the common ones are:

  • Office supplies
  • Salaries and wages
  • Marketing and advertising

Operating Income

Next is operating income. As the name implies, it’s the profit your business has earned from its operations when considering all the revenue and expenses necessary to run your business. 

Finance Costs

Finance costs represent the costs of financing arrangements, such as interest on bank loans. You’ll want to strip financing costs away from SG&A expenses because they don’t represent the costs necessary for producing the goods or services you sell. 

Net Income 

After factoring in finance costs, you’re left with net income (or net loss). This is the much-talked-about bottom line. Your net income is how much your company has earned throughout the year.

What About Income Taxes?

You may ask yourself, why didn’t we include taxes? A small business isn’t burdened with income tax unless it’s structured as a C-corporation (which few small businesses are due to their complexity and maintenance costs). Instead, the business profits pass through to the owner and get taxed on the individual Form 1040. 

Balance Sheet

Also known as the statement of financial position, the balance is an organization’s most important financial report because it shows the company’s financial health.

A balance sheet reports data for a specific point in time, often the last day of a fiscal year.

What Goes on a Balance Sheet?

Balance sheets contain 3 sections: assets, liabilities, and equity.

These are the resources your company owns that have a current or future economic value. These include cash, equipment (such as computers), and vehicles.

Assets can be broken down into:

  • Current assets: This is anything you own that can be converted to cash within one year (e.g., accounts receivable and inventory). Also called short-term assets.
  • Non-current assets: These are assets that can’t be quickly converted into cash, like computers, equipment, and vehicles, or intangible assets, like trademarks and copyrights. Also called fixed assets or long-term assets.

2. Business Liabilities

These are amounts your business owes other entities such as banks, employees, and suppliers.

  • Current liabilities: Amounts you owe that are due within one year (e.g., accounts payable and payroll liabilities)
  • Non-current (long-term) liabilities: Debts that will be repaid in more than one year

3. Owner Equity or Shareholder Equity

This is the value of the owner’s or shareholders’ investment in the business after liabilities are subtracted from assets. It may also be called owner’s or shareholders’ capital.

Purpose of a Balance Sheet

The balance sheet shows anyone what your business is worth. Lenders, investors, partners, and potential buyers will want to review your balance sheet.

The overall worth of your business can be measured or estimated by the total value of its assets, which are recorded and presented on the balance sheet.

But even more important, your balance sheet shows your business’s net worth , which is the owner’s equity (or shareholder’s equity). This is a business’s residual value after removing its liabilities . It’s what ultimately belongs to the business owner.

Format of a Balance Sheet

Balance sheets are prepared based on the accounting equation, which is:

Accounting Equation

Traditionally, before accounting software was developed and bookkeeping was done with pencil and paper, assets were put on the left side of the balance sheet, while equity and liabilities went to the right side. 

Today, however, a balance sheet will almost always look like this:

Balance sheet example

Now here’s something to remember.

The net income (your income statement bottom line) is annually transferred to your balance sheet, where it will appear as retained earnings. So retained earnings are a running total of your company’s profitability from day 1. 

Difference Between an Income Statement and a Balance Sheet

If you want to know how your business has performed over a span of time (a year, month, or quarter), you’ll want to refer to your income statement. 

On the flip side, if you want to know your business’s financial health, to know its value or worth at a particular point since it was established, the balance sheet is the report you’ll want to refer to.

Cash Flow Statement

A cash flow statement shows the movement of cash, the cash inflows and outflows within the business, based on 3 cash sources and cash expenditure categories: operations, investing, and financing.

This is an extremely important financial statement because, ultimately, cash is the best indicator of the financial health of an enterprise.

The reporting period for a cash flow statement is often one fiscal year but could be a quarter, month, or any reporting period that makes sense for your business.

Why Do You Need a Cash Flow Statement?

You already have an income statement that shows you the profits you’ve made. Why do you still need a cash flow statement?

An income statement is prepared based on the accrual method of accounting . This means your sales are recorded when you earn them, not when your business receives the actual cash. 

This creates a timing difference. A sales amount of $10,000 on your income statement, for example, doesn’t always mean this amount is in your bank account. It may be an invoice you sent to your customer, and you’re still awaiting payment.

The same goes for expenses. In accrual-basis accounting, expenses are recorded when your business incurs them and not when you pay out the cash.

But what about the cash figure on the balance sheet? While the balance sheet captures the cash balance, which can be meaningful, this balance sheet figure doesn’t tell us the source of the cash. 

The cash could be from a windfall, like an insurance claim, which is a one-time event and unsustainable. Or it could be from normal day-to-day business operations, which are more sustainable.

Sections of a Cash Flow Statement

A cash flow statement has 3 sections:

  • Cash from operations (or from operating activities)
  • Cash from investing activities
  • Cash from financing activities

And this is what a typical cash flow statement looks like:

Cash flow statement example

Cash From Operating Activities

Cash from operations is the first section of a cash flow statement, revealing its relative importance in the cash flow statement hierarchy. Cash from operating activities is the most meaningful because this is cash from your day-to-day trading activities.

These include cash received from sales, set off against cash expenses like the cost of goods sold, utility expenses, and rent.

It also takes into account non-cash items, like depreciation , that are included in net income but don’t involve any actual cash movement. And it considers any changes in your assets and liabilities during the time period, like an increase in accounts receivable .

Since operating activities are the mainstay of a business, a company with positive cash flow from operating activities will be more sustainable.

Cash From Investing Activities

The main source and use of cash from investing activities are purchasing and selling fixed assets. Common examples of fixed asset items are things like buildings, vehicles, computer equipment, or machinery. 

But other investment items can appear in the investing activity section, such as buying stocks and bonds for investment purposes.

Cash From Financing Activities

All cash inflows and outflows from financing activities will be captured in this last section of cash flow statements. 

If you’ve taken out a bank loan to purchase equipment, the cash the bank provided you will show up in this section. And when you begin making loan payments, these will be included here.

Track In The Black With Better Reporting

Financial Statements Are Fundamental

In Sam Walton’s autobiography Made In America , here’s what Al Johnson, the CEO of Walmart at one time, revealed about Walmart’s owner and founder:

“Every Friday morning for six years, I would take my columnar pad with all the numbers on it into Sam’s office for him to review. Sam would jot them down on his own pad and work through the calculations himself. I always knew I could not just go in there and lay a sheet of numbers in front of him and expect him to just accept it.”

As a small business owner, you should be able to make sense of your financial statements. It will ensure you ask the right questions and follow important clues and cues. 

You can make financial statements manually in a spreadsheet, but accounting software automates everything, so it’s faster and easier and leaves less room for error. With all your financial information in one place, you can immediately access your financial data whenever you or your accountant needs it.


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37+ Sample Financial Report Templates — Word, PDF, Apple Pages

Every organization and business must have financial statements if they have to run successfully. This is because it is essential to have an account of the financial status during a fiscal period. In case you are looking to create a report stating the total revenue, assets, liabilities, and income of your company, you can check out our financial report format templates that are professionally designed by our experts. There are financial report samples for a non profit secretary, school project , economic restaurant, year end accounting, and more.

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