A financial report is a document that showcases all of your business’s activities and performances over a specific period. These official company documents are used for strategic decision-making and are often legally required.

These reports help stakeholders understand your company’s financial status, potential risks and future profitability estimates. They are also used to ensure compliance with accounting standards and regulatory requirements. Creating these reports can be challenging, especially when you are pressed for time or trying to meet external reporting deadlines. Fortunately, the right tools can make creating these reports much easier and faster for you and your team.

The most common financial reports include an income statement, cash flow and a balance sheet. An income statement shows all revenues (such as sales, service revenue and interest) as well as expenses such as cost of goods sold, payroll and rent (using accrual accounting). The bottom line is the gross profit or loss.

Cash flow statements show all cash coming in and out of a company during the period, including money from customers, loans, equity investments and other sources. The cash is then matched with the expenses and other investments, resulting in the net cash flow for the period.

The balance sheet is a snapshot of what a company owns (assets) and owes (liabilities). It also includes the shareholders’ equity. This is an important report for investors, as it helps them assess the risk and return of investing in your company.