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18+ Annual Report Templates
From a corporate standpoint, annual reports seem like a year-end review that someone would present at a New Year’s party. These report samples contain the good and the bad that transpired within the year of the company. Nevertheless, it is an essential document that does not only serve as a review of the past but also a compass to the future undertakings of the company. In this article, we will be discussing the things you need to know in writing an annual report.
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Elements of a Good Annual Report
An annual report is a comprehensive document that describes the financial and operational conditions of the company for the year. This business report contains the following elements:
- Message from the Executive: This is the letter from the Chief Executive Officer, or the CEO, that prefaces the annual report. Also known as the chairman’s letter or statement, it sets a bird’s eye view on the bigger picture of the report: presenting what happened and what will. Although it is basically a summary, it highlights the events that led to the company’s successes and failures. The message ends with a prelude to the direction that the company will take for the following year.
- Management’s Discussion: This is a series of reports by the people from the upper management giving their individual overview from their respective department. The management discusses the company’s operations in detail. Management will compare this year’s results to results from the past and make an analysis out of it. At the end of this part is the management’s evaluation that will outline its own expectations and business plans for the company’s future growth.
- Business Profile: This part discusses the business model of the company. It tells its products or services offered, its operations to generate profit, the companies that serve as its subsidiaries, its business partners, business competitions, marketing strategies, and other factors that relate to how the business is being run. Major operational shifts and a detailed explanation that led to the shift is also included in this part.
- Cash Flows and Statements: This is where the numbers come in, however, this does not mean that is purely bombarded with balance sheets and graphs. The financial statement of the company also gives a brief explanation to each figure. The financial statement of an annual report contains the general cash flow and statement of the company, most often in a consolidated form, that are detailed enough for the readers to grasp the fiscal situation of the company.
- Notes for the Investors: A more accurate term for this section is a note for “future” investors, because its primary objective is to give information to interested investors by giving the company’s contact details, stock prices, and other information on how to own or buy some of the company’s stock.
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Steps to Make a Great Annual Report
- Gain insight from the upper management, including the CEO: Before starting your annual report, make sure that you are on the same page with the big bosses. The chairman’s letter that is part of your annual report, will actually be made by the office of the company’s leader, and in this case, your CEO.
- Set deadlines: As your annual report is a collection of statements and data from different departments, create a timetable of deadlines. To provide a sense of urgency, have your CEO sign your memorandum of deadlines to establish a sense of urgency. After all, who can say no to the CEO?
- Prepare your data: As the data submitted from different departments start to pile up, start filtering what information you need in your report by sorting it by relevance.
- Begin your report: Recall all the significant operational shifts that happened and arrange them in chronological order. Provide your insight for every event and tell it as though you are writing a story but with a very formal and professional tone. You don’t need to make it impersonal, just the right amount of conversational tone will do to make your report engaging. Be guided with facts and be concise.
- Work on the financial statements: This part consists of your income statement, balance sheet, and cash flows. Your income statement breaks down your profits and losses for the whole year. The balance sheet is the summary of the company’s assets and liabilities. And, the cash flows presents the inflows and outflows of cash in your business. Have a team ready to help you out in creating this rigorous section.
- Append the CEO’s letter: Request for your CEO’s statement and read its contents. Check if the tone he or she set complies with the narratives of your business report. If not, then make the necessary changes.
- Verify everything, then print: Seek a team of auditors who work outside your company to review your report, specifically the financial statement. These external auditors must not be under any affiliated company or organization to eliminate any bias. After they verify your report, have them release a statement attesting that everything in your financial statements are true and correct. After the auditors, submit a copy to your bosses and wait for their approval to print it out. After printing, have it bound so it will look organized and neat for the interested parties to read.
Tips for a Great Annual Report
- Minimize the use of technical words: Public companies publish their annual report to everybody, and this means that the report should not only cater to persons working in the business industry but also to laymen as well. Do away from too much technical terms or use footnotes to provide helpful interpretation.
- Add visuals: Poring over more than a hundred pages of only words and numbers will tire out the reader, even if it’s someone who is used to it. Adding business growth charts, sales graphs, infographics of your products, pictures for documentation will not only break the wall of intimidating texts and figures but also provide context that will make your report more understandable.
Types of Annual Reports
- Corporate Annual Report: Perhaps the most common type of annual report, corporate reports publishes the financial conditions and operational situations that transpired within the year to everyone including the Security Exchange Commission (SEC), board members, employees, and interested parties from the public.
- Mutual Funds Annual Report: While the target audience of corporate annual reports is the public, the target readers of mutual funds annual reports are specifically the fund shareholders. These reports are not judged by its presentation but with the numbers presented such as the annual profit. The shareholders evaluate the company’s assets and liabilities to determine the status of the company.
- Non-Profit Annual Report: The idea behind non-profit annual reports greatly contrasts the objective of mutual funds annual reports. While the mutual funds highlights the expenses, non-profit annual reports focuses on the presentation. They contain the non-profits mission and vision, documents the activities that the organization has done within the year through the photos, and commits to their donors with transparency through the financial statement.
Annual Report Template Sizes
Annual reports are published on documents with paper sizes of 8.5 inches by 11 inches or 8.5 inches by 14 inches.
Annual Report FAQs
How long, in terms of pages, are annual reports?
According to a study conducted by accounting organization Deloitte, annual reports average to 180 pages for big companies and 120 pages for small businesses. Additionally, annual reports published over the recent years also seem to focus more on the company narrative rather than the financial statements.
Where can we read published annual reports of publicly-traded companies?
Although annual reports are submitted to the SEC or the company’s investors directly, some companies publish their annual reports on their respective websites for anyone to view. Annualreports.com publishes a collection of annual reports by participating companies on their site. Though it may not be all, but it is a start if you are looking for furnished annual reports.
Your annual report is more than just a lengthy declaration of your company’s financial statement, it is the story of your company for the year. Work on the narratives of how the year has been for the company. Have teams work on the different sections. The creation of an annual report is through the company’s effort, for it is a consolidation of the immediate past and a forecast of the distant future.
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