How Annual Reports Propel Online Businesses To New Heights

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Annual reports can be a highly effective way to find out what is going on internally with a business. Many people who are new to entrepreneurship make the mistake of underestimating their importance and significance. If you are managing a business, now’s the time to start creating your own annual reports.

You should suggest them if you are working for somebody else’s company. This post plans to tell you about all of the advantages of doing this. Understanding the advantages of annual reporting can be very motivational, driving you toward developing your own informative and useful reports.

How to create your own reports

Creating your own reports can be an extraordinarily difficult task. Fortunately, it’s not something you necessarily have to do on your own. By finding an annual report designer, you can outsource the work. Outsourcing the work to somebody that’s knowledgeable and experienced in report production will save you an enormous amount of time.

How to Create Your Own Reports

Report designers are obviously going to be a lot more expensive to work with than creating your own report would, though. Budget is therefore something to think about. The main benefit of a report designer is that they will be able to do all of the work for you, saving you the headache of having to navigate the complexities of corporate report production on your own. 

Make sure that if hiring a report designer is something that you are interested in, you hire one with good reviews and a solid reputation. A good way to gauge a designer’s reputation is to read the reviews posted on their Google or Trustpilot pages. Ones posted on their own website are most probably vetted and biased.

1. Providing financial information

A key benefit of annual reports is that they provide financial information to stakeholders and help them get a better understanding of how their business or investment is performing financially. When a business begins to underperform, it’s typically closed down.

Providing financial information

This is because it’s unsustainable to continue sinking money into a company that isn’t doing well. The financial information that is given to stakeholders in annual reports can help them get a good idea of whether or not their investment is sustainable and help them decide whether or not to sell.

Something else to note is that annual reports give business owners a good idea of how their businesses are going to perform in the coming years. If a business has performed terribly in the first three quarters but extraordinarily in the fourth, there is a chance that this trend will continue and profits will be generated.

Similarly, if a business performs well in the first three quarters, and then underperforms in the last, it indicates that it is going to continue its downward trend. Annual reports are, with all of the above in mind, a fantastic way to determine a business’s financial sustainability.

2. Business operation performance

Annual reports give business owners a good idea of what operational performance is like. For example, they give stakeholders an overview of what their company’s products, services, customers, and market position are like. Understanding how all of these things are performing can be great for determining how sustainable a business is.

Business sustainability is one of the driving factors behind reports. If it’s determined that a business is no longer sustainable, stakeholders are going to want to pull out as quickly as possible. Something to note is that it’s your responsibility as a business owner to compile all of the information that will go into your annual report. You may want to hire an investigative agent to look into your business and compile this information for you.

When information is presented to you, make sure that you look into it before you create your report. If you are hiring a professional to create your report for you, they’ll verify the authenticity and accuracy of the data that is given to you on your behalf, ensuring it’s reliable and genuine. Understanding your business’s market position can also increase your odds of outperforming competitors in the years to come.

3. Highlighting key initiatives

Every year, it’s likely that new initiatives will be introduced. When these initiatives are introduced, it’s your responsibility to look into them and make sure that they are actually suitable and decide whether or not they should be discontinued. Highlighting key initiatives that have performed well is one of the main reasons that people produce annual reports.

Highlighting Key Initiatives

During these reports, stakeholders are given a detailed explanation of which initiatives have worked and which (if any) have failed. Those initiatives deemed to have failed will usually then be rolled back in the weeks following the report’s release and its presentation.

The key initiatives section of a report will also discuss any developments or new releases the company has undertaken or made in the previous year, such as the introduction of a new department or the release of a new product. Expansions into new markets are also considered key initiatives.

Marketing efforts are also considered initiatives. Once you have read your business’s new annual report, make sure that you then begin relaunching the initiatives that did work and drawing back the ones that didn’t. Allowing failed initiatives to continue is one of the worst things that you can do for your business.

4. Ensuring company compliance

For businesses, regulatory compliance is very important. If they begin drifting into non-compliance, they can get into a lot of trouble and even be forced to close. Unfortunately, due to the fact that business departments tend to run themselves and stakeholders only find out what’s going on at the end of the year, this means that businesses are not usually aware of any compliance breaches until the annual report comes in.

Annual reports therefore serve as a way for business owners to make sure that they are working the way that they are supposed to and ensure employees are behaving appropriately and according to the law. If you do discover that any of your employees are breaching regulatory laws, make sure that you take immediate action and discipline them. Disciplining them doesn’t necessarily have to mean that you fire them.

Discipline can be something as simple as reprimanding them and telling them not to do what they were doing again. If they do decide to go ahead and do the same things that they were doing before again, by all means, terminate their employment. Further grounds for termination of employment are if your employees were knowingly breaching regulatory guidelines.

5. Explaining future plans

Annual report meetings are a great opportunity for you and your business’s stakeholders to explain and explore future plans, particularly ones stemming from ongoing initiatives. Of course, extensive planning must go into the adoption and implementation of any initiatives, so this meeting should not be the first and only one.

Explaining Future Plans

You still need to conduct extensive and thorough research and verify that the ideas you want to implement are actually going to have benefits for your company. Implementing poorly thought-through ideas or concepts into your business can be a very bad thing and can ruin your business’s financial performance and even its reputation.

If you are interested in adopting new initiatives, you may want to hire somebody to do all of the research and work for you. By getting somebody to do the research and work for you, you won't have to worry about all of the complexities and difficulties that come with researching and implementing new initiatives.

However, if your business is a small one, this might not be viable, and it might be a better idea for you to do all of the work yourself. If you are going to explain future plans to stakeholders in a meeting, make sure you’ve got a good guide and insightful resources and documents prepared for them.

6. Identifying unnecessary functions

Finally, annual reports allow stakeholders to identify unnecessary and useless functions and departments. Every company has at least one function that’s no longer needed or is underperforming. Distinctions need to be drawn between underperforming and no longer useful functions.

The former requires significant work and improvement, whereas the latter needs to be eliminated altogether. This is because the latter kind is detrimental to a company’s bottom line. An underperforming function can also be detrimental but in a different way. In simpler terms, functions that are no longer needed or useful are like dead weight.

Something else to note is that if you are planning on eliminating or terminating certain departments or functions, you need to make sure that you come up with an effective plan for the employees who were previously working in it. If you do not come up with a plan, their lives could be negatively impacted.

This is because they won’t have anything else to do or could end up with no other choice but to find another job. If you have to fire them, come up with an attractive severance package.

Conclusion

In conclusion, annual reports can propel your business to new heights. They allow you to get a better idea of what your business’s financial condition is like, help you to comprehend its operational performance, aid in highlighting key initiatives, ensure company compliance, explain future plans, and identify unnecessary and useless functions. 

If you’re interested in having them drawn up, consider hiring professional support. A designer will be able to create effective and insightful reports for you. Always read a designer’s reviews before hiring them so you can be sure their services are going to come in handy.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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