Financial and management reporting are crucial to strengthening your business’s growth strategies. It helps you determine where your business stands, the money it earns and loses, and if you’re ready to enter a new stage of growth.
But the act of reporting alone isn’t enough to maximize its benefits. What matters most is to do it regularly. At the same time, you must also know how to translate the pieces of information it presents into actionable insights.
Here are the 5 reasons why regular reporting matters
Regular reporting is a business activity you must not ignore because it:
1. Provides a clear overview of your financial position
Conducting reports regularly, be it for compliance or decision-making, is the best way to keep an eye on your business’s financial health. It alerts the right people of any irregularities, a decline in sales and other potential losses that can get out of control if left unattended. When you have a clear understanding of your financial performance, you can immediately address any issues. At the same time, it helps you spot business areas with the highest opportunity for growth.
For your reference: What is Financial Reporting? Definition, Importance and Types
2. Tracks your progress
Developing a regular reporting strategy lets you track your organisation’s progress over time. As an old saying goes, “What gets measured gets managed.” The same applies to small business performance. To determine the progress you’ve made, you need to track it constantly.
Each reporting period, you must strive to determine your strategy based on your results. Remember, your finances play a role in every decision you make. It shows if you can afford to increase your marketing budget, push new products, hire new staff and make relevant improvements to how you run your business.
3. Guides decision-making
Business leaders need accurate, timely and relevant information to make smart business decisions.
Regular reporting backed with actionable insights helps your decision makers to come up with logical solutions for business concerns. It’s grounded in data and not just on instinct, giving you the confidence to choose the best course of action whatever issues you may face.
4. Creates a paper trail
An organized and transparent paper trail is significant for businesses, especially if you need your historical records. Regular reporting offers an efficient way to create a paper trail. If you report your finances regularly, you’ll have a complete record of your company’s financial history. It can be especially useful during audits, applying for loans and grants, or if you plan to sell the business.
In this digital age, and with Australia’s move towards the digital economy, creating a paper trail through your financial and management reports is all about harnessing the power of technology. Instead of storing your paper documents in filing cabinets, you can use online software to save, backup and store your business reports for years without consuming much time, space and resources.
Read Next: SME Guide: How to Write a Financial Planning Report
5. Provides a seamless way to apply for grants, loans and business support
Aside from the paper trail it creates, regular reporting also keeps your financial documents up-to-date. It gives you an advantage when it comes to applying for grants, loans and business support.
When your business is qualified for such assistance, you can immediately apply because your documents are ready. Moreover, government agencies, financial institutions and investors can perceive it as a positive sign that your business knows its financial health well. As a result, it can potentially increase your chances of getting approved.
Wondering what your reporting obligations are? Check out this list from the Australian Taxation Office: Reporting and administrative obligations.
The insights your reports contain are also critical in decision-making. If you need assistance in preparing your reports, our CFOs and accountants at ABJ Solutions are here to help.
Powered with accounting technology, ABJ Solutions will help you get your reporting strategy back on track. Get in touch with us today and we’ll help you come up with a regular reporting strategy that works for you.
This post was first published on 10 December 2018 and updated on 7 December 2022.
