17 Jan, 2020

With CSR reporting, sustainability reporting, and social governance on the rise, it won’t take long for corporate reporting to catch up.

The objective of corporate reporting is to provide key information to creditors and investors to make sound business decisions. These decisions are mostly related to investment opportunities.

Corporate reporting builds a bridge of communication between business enterprises and external users. These external parties include the general public, government authorities, customers, and creditors.

With its immense impact, corporate reporting simply cannot be ignored. The following 4 reasons help strengthen its relevance.

1. Financial information

Financial statements aren’t easy to comprehend. Corporate reporting includes financial reporting that entails the following financial information:

  • Company balance sheet information
  • Cash flow statement figures
  • Figures of grants received
  • Previous years’ financial figures
  • Donation information
  • Comparison to previous years’ financial trends
  • Current stock prices

Thanks to corporate reporting, income statements are presented concisely. Every singular company expense, along with cumulative sales numbers are mentioned within the income statement.

Add to that, the balance sheet. This gives a detailed snapshot of company assets and liabilities. The cash flow statement easily covers financial information with regards to cash outflow/inflow.

Corporate reports also contain additional notes that make financial information easier to understand. Income statements contain notes explaining the type of sale.

2. Appease shareholders

Each section within a corporate report is presented in a structured manner. This is done to appease creditors, government officials, and company shareholders.

If a company does not have that much financial data to present, a large chunk of the report is dedicated towards gathering goodwill.

A section within a corporate report is dedicated to sending out a rallying cry to employees, stating company ideals and its mission.

Corporate reporting also presents morale-boosting employee testimonials, team photographs and highlights of community service. Best performing employees are recognized.

3. Management’s voice

A corporate report acts like a mouthpiece for the management. It’s quite rare for CEOs and company leaders to address their employees in the open.

Corporate reporting provides an excellent opportunity for management to communicate with internal stakeholders. Almost all corporate reports start with a message from either the Chairman of the Board of Directors or the Chief Executive Officer. The message is usually a summary of how the company has grown in the past year.

Following the message comes a detailed management analysis of financial operations. This analysis includes information regarding:

  • Operating expenses
  • Any changes in the previous annual report
  • Cash flow statement
  • Asset sales
  • Net income
  • Revenue growth

4. Quantifying environment change

Corporate reports help companies shape the future. Addressing environmental issues and portraying an effort to bring a change adds credibility.

Corporate reporting highlights the development of sustainable business practices. This leads to efficient operations, streamlined effort and conservation of resources. All this in turn, enhances employee productivity and reduces cost.

With companies adopting sustainable practices, regulations are now being put in place to regulate such practises. These practices can only be presented via corporate reporting.

Corporate reports are going nowhere. They are an essential piece of business communication. Get corporate reports designed by the best report designers in India.