Business reports are valuable and essential tools for any enterprise regardless of size or industry. They provide a means to track and analyse the performance and overall health of the business while identifying areas for improvement and opportunities for growth.
Some business reporting is necessary as part of a regulatory requirement. For example, financial reports are a legal necessity for all businesses as determined by the Government of the country in which the business is based. Regular business reporting and monitoring are also necessary for many organisations to keep senior management, board members and other stakeholders advised on what is happening within the organisation.
The purpose of business reporting
The aim of a business report is to provide critical analysis of how the business is tracking in all areas of the organisation. Business reports are important tools to guide decision-making and to allow business owners and senior managers the opportunity to investigate and solve any identified issues.
Reporting is done through the process of compiling and reviewing the information within a specific functional area such as finance, sales, operations, inventory control or any area of the business where performance is monitored and measured.
Once information is gathered and reviewed, conclusions can then be drawn and recommendations made. The outcome of the report may explain why an issue has occurred or may identify performance problems and generally will recommend a course of action.
The importance of business reporting
Business reports provide useful insights for management such as information on spending, profits and growth. Reports will provide important detail that can be used to help develop future forecasts, marketing plans, guide budget planning and improve decision-making.
Managers also use business reports to track progress and growth, identify trends or any irregularities that may need further investigation. In addition to helping guide important decisions, business reports help to build an audit trail of business activities including reports that document annual budgets, sales, meetings and planning initiatives.
Business reporting promotes transparency and for many public companies, an annual report is a legal requirement to provide shareholders, the government and others with financial data and ownership information about the business. Additionally, regular reporting throughout the business year enables businesses within the same sector to measure and compare their performances against others.
Business reports in action
Different reports will provide distinct value for all functional areas of an organisation. Examples of some common reports include market analysis, trend analysis and financial analysis as well as operational and performance reports.
Inventory stock reports
Inventory stock records report on the movement of inventory into and out of the warehouse. They help a business identify any problems affecting performance such as product loss, obsolescence or dead stock.
Market analysis reports
They help business owners decide how to allocate their resources. For example, when an analysis of the market concludes that the ensuing business year will see accelerated growth, companies can increase their marketing budget to take advantage of this.
Trend analysis reports
These reports support long-term business development by examining statistical trends such as consumer preferences and the demographic groups that are experiencing the quickest growth rate. The objective of a trend analysis report is to identify growth opportunities to enable businesses to build market share ahead of competitors.
Financial reports are generally prepared on a regular basis by most companies and help to keep them on track toward achieving revenue and profit objectives. These reports highlight any variances in the financial results compared to forecasts in the annual business plan and will explain the reason for any significant negative variance.
Operational analysis reports
These reports show how efficiently a company is operating and will recommend ways to further improve productivity. An analysis of inventory control might indicate that the company experiences periodic shortages of key raw materials that prevent timely order fulfilment. The report may recommend that the company look for back-up suppliers of essential items to ensure availability when needed.
Monitoring performance trends help the company to set KPIs, benchmarks and business goals based on the most important aspects of the business. Performance reporting allows the business to compare performance over different timeframes and report objectives should always align with KPIs to demonstrate if these have been met or even exceeded.
Business reporting for business success
Business reports document the progress of your businesses and the data collected serves several important purposes. It guides strategic decision making, helping business leaders to formulate budget and planning activities for the ensuing year using the report data to back choices and provide justification for each decision.
Monitoring and reporting over time will not only highlight problems but can also identify opportunities for growth or expansion. Reports also work as a means of recording previous activities and help to define future growth opportunities by identifying already proven successes or what else could be done moving forward.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.