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What is a Financial Report?

Every company, whether large or small, relies on sound accounting practices for success, and financial reporting plays a critical role in this process. At the core of every financial reporting process, there is a financial report.

But what is a financial report exactly? And what information is included? Let’s take a closer look.

What is Financial Reporting?

Financial reporting is a process of documenting and communicating financial data. The process is typically conducted by organizations on a quarterly or yearly basis. However, depending on the size and economic position of the organization, financial reporting could be carried out more frequently.

What is a Financial Report?

In essence, a financial report is a final deliverable produced as part of the financial reporting process which facilitates its communication. Think of it as the formal document presented once all accounting data is collected and processed.

In most organizations, the CFO is responsible for overseeing the production and delivery of financial reports. However, accountants, financial analysts, and controllers are also typically involved in the process.

If a company is publicly traded, there might also be external auditors involved in the process as well as other senior managers and key decision-makers.

What Is The Purpose of a Financial Report?

A company’s financial report is vital to its financial health as it ensures transparency and compliance while allowing owners and operators to make better decisions and understand how their businesses compare to their competitors. It’s also a way to obtain an overview of an organization’s economic situation and project profitability and growth.

For publicly traded companies, preparing a financial report is a requirement for both legal bodies and investors. That typically involves quarterly (10-Q) and annual (10-K) reports as well as other filings like 8-Ks.

In order to meet these obligations, public companies’ financial reports must also comply with specific accounting standards like GAAP in the U.S. or IFRS internationally.

What Is Included in a Financial Report?

The information in a financial report can vary from one organization to another. However, typically there are a few key reporting pillars that make up part of a financial report.

Income statement
Balance sheet
Cash flow statement
Statement of changes in equity
Notes to financial statements
Management discussion and analysis (when applicable)
Auditor’s report (when applicable)

Simplifying Financial Reporting With ERP

As organizations grow, so does the complexity of their financial reports, opening themselves to a higher risk for making costly errors. Depending on the amount of transactions a company has, compiling and processing all of the data that appears in a financial report can consume a lot of time and resources.

However, organizations no longer have to burden themselves with the labor-intensive process of producing financial reports manually. Enterprise Resource Systems (ERPs) like XLedger make it easy for CFOs and accounting teams to quickly and efficiently produce accurate financial reports.

XLedger allows organizations of all sizes to track data seamlessly and automatically. It displays near real-time results as visual reporting dashboards that ensure your team can make quick business decisions based on financial data.

We invite you to take a product tour and explore all the features our world-class ERP has to offer.

Free your finance team from tedious and repetitive accounting tasks and contact us today.

Want to Learn More About ERP Systems and Financial Reports?

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