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The Importance Of Financial Reporting And Analysis: Your Essential Guide

Financial reporting is an important part of your business at various levels -from a legal point of view, for your investors, and for internal monitoring

While you may already know that a detailed financial reporting process is important (mainly because it’s a legal requirement in most countries), you may not understand its untapped power and potential. In fact, financial analysis is one of the bedrocks of modern businesses. Financial analysis and reporting offer a level of insight that helps businesses remain compliant while streamlining their income or expenditure-centric initiatives across the board.

Utilizing financial data with the help of online data analysis allows you to not only share vital information both internally and externally but also leverage metrics or insights to make significant improvements to the very area that allows your business to flow.

To help you unlock the potential of financial analysis and reporting, we’ve produced this guide to tell you everything you need to know about the topic. Let’s hit it off with a detailed financial reporting definition. 

Your Chance: Want to test a financial reporting software for free? Explore our 14-day trial & take your financial reporting to the next level!

What Is Financial Reporting?

Financial reporting refers to standard practices to give stakeholders an accurate depiction of a company’s finances, including their revenues, expenses, profits, capital, and cash flow, as formal records that provide in-depth insights into financial information.

Each of these financial KPIs is incredibly important because they demonstrate the overall ‘health’ of a company – at least when it comes to the small matter of money. These types of KPI reports don’t offer much insight into a company’s culture or management structure, but they are vital to success, nonetheless.

As we continue, we’ll explore the use cases of financial analysis and reporting, but for now, it’s worth noting that these ‘financial health reports’ are crucial for anyone looking to make informed decisions about their business. Financial reporting software and BI reporting tools offer invaluable information on elements including investments, credit extensions, cash flow, and so on. Financial reporting and analysis are also legally required for tax purposes.

That said, there are various types of financial reporting that can serve different purposes. Some of the most common ones include: 

  • Income Statement: Also known as profit and loss, an income statement is a financial analysis report that shows the company’s incomes and expenses over a given period of time with a focus on four key elements: revenue, expenses, gains, and losses. The main goal of this statement is to understand if the business is making money or not. It does this by summarizing key sales activities, costs of production, and any other operational expenses during an accounting period. The report subtracts the revenue with all expenses to understand how much profit (or loss) the business made. 
  • Balance Sheet: This type of financial statement provides a detailed overview of a companies assets, liabilities, and stockholder’s equity. Essentially, a balance sheet provides a summary of the business’s financial health at a given point, which is usually a month or quarterly period, and it can be used for internal or external purposes. On one hand, it can be reviewed internally by any stakeholder such as managers or employees in order to understand if the company is going in the right direction. And on the other hand, a balance sheet can be used externally by anyone who is interested in investing in the company, as the report provides useful information about the available resources and how they were financed. 
  • Cash Flow Statement: Putting it in simple words, a cash flow statement shows the amount of cash that the company is generating and for what costs the cash is being spent. It contains elements of both the income statement and the balance sheet and it is critical to the successful management of a business. A cash flow statement is usually divided into 3 different areas that classify all the cash received and paid. First, we see the operating cash flow that shows revenue, expenses, gains, and losses, then we have the investing one which shows the cash from debt and equity purchases and sales. Lastly, we have the financial one, which reports on long-term liabilities such as loans payments and equity items such as the sales of company stock. 

Whatever your company’s financial aims, with the right analytical approach, you can significantly accelerate the growth of your business. In this post, we will see the power of financial analysis and reporting in detail, look at real-world finance reporting examples, and discuss why this approach should be a vital component of every modern business strategy.

Now that we’ve explored what we consider to be a good financial reporting meaning, let’s glance at the benefits of these kinds of reports.

The Benefits Of Financial Reporting

We’ve pondered the question ‘why is financial reporting important?’, looked at real-world use cases, and shared what we consider to be the financial reporting meaning. To continue our journey, let’s consider the key benefits of financially-based reporting and analytics.

  1. Improved debt management: As you know, debt can cripple the progress of any company, regardless of sector. While there may be many different types of financial reporting concerning purpose or software, almost all solutions will help you track your current assets divided by the current liabilities on your balance sheet to help gauge your liquidity and manage your debts accordingly.
  2. Trend identification: Regardless of what area of financial activity you’re looking to track, this kind of reporting will help you identify trends, both past, and present, which will empower you to tackle any potential weaknesses while helping you make improvements that will benefit the overall health of your business.
  3. Real-time tracking:  By gaining access to centralized, real-time insights, you will be able to make accurate, informed decisions swiftly, thereby avoiding any potential roadblocks while maintaining your financial fluidity at all times.
  4. Liabilities: Managing your liabilities is a critical part of your company’s ongoing financial health. Business loans, credit lines, credit cards, and credit extended from vendors are all integral liabilities to manage. By using a financial report template, if you're planning to apply for a business expansion loan, you can explore financial statement data and determine if you need to reduce existing liabilities before making an official application.
  5. Progress and compliance: As the information served up by financial reporting software is both accurate and robust, not only does access to this level of analytical reporting offer an opportunity to improve your financial efficiency over time, but it will also ensure you remain 100% compliant – which is essential if you want your business to remain active.
  6. Cash flow: Big or small, an organization’s cash flow is essential to its ongoing financial health. Working with a mix of detailed metrics and KPIs, it’s possible to drill down into cash flow in relation to anticipated profit and liabilities, keeping your monetary movements secure and fluent in the process.
  7. Communication & data access: Any modern financial analysis report worth its salt is accessible to and optimized for a multitude of devices. By gaining unlimited access to essential financial insights and data, you can respond to challenges swiftly while improving internal communication across the board. If everyone understands emerging trends and can share vital financial data, your organization will become more efficient, more innovative, and safeguarded against potential compliance issues or errors.
Your Chance: Want to test a financial reporting software for free? Explore our 14-day trial & take your financial reporting to the next level!

Why Is Financial Reporting Important?

Top 10 reasons stating the importance of financial reporting and analysis

A report from McKinsey suggests that leveraging data to create more proficient marketing reports and to make more informed decisions can boost marketing productivity by 15 to 20%, which translates to as much as $200 billion based on the average annual global marketing spend of $1 trillion per year.

If you apply that same logic to the financial sector or a finance department, it’s clear that financial reporting tools could serve to benefit your business by giving you a more informed snapshot of your activities.

Financial reports offer a wealth of insight that can streamline your business’s fiscal activities. But, before we look at the benefits in more detail, let’s get down to brass tacks – what’s the point and the role of financial data analysis and reporting?

Well, there are three main factors:

  • It is required by law for tax purposes.
  • Financial reporting and analysis give investors, creditors, and other businesses an idea of the financial integrity and creditworthiness of your company.
  • Financial reporting software provides crucial information that you can use to make better business decisions – for example, whether you should open a new branch or not.

To further illustrate the importance of financial statement analysis, let’s break these three primary reasons for financial reporting down into more detail.

1) For taxes

You may have heard the phrase: the only two certainties in this world are death and taxes (or something similar).

That said, taxes are arguably the biggest reason for the importance of financial statement analysis – basically, you have to do it! The government utilizes such reports to ensure that you’re paying your fair share of taxes. If financial reports weren’t legally required, most companies would probably use management dashboards instead (at least for internal decision-making purposes).

The government’s requirements for these documents have created an entire industry of auditing firms (like the “Big 4” of KPMG, Ernst & Young, Deloitte, and PWC) that exist to independently review companies’ financial reports. This auditing process is also a legal requirement.

2) For other companies, investors, shareholders, etc.

If you’re considering investing money in a company, it only makes sense that you’ll want to know how well that company is doing – according to a standardized litmus test; not measurements that a company has fabricated to make themselves look good.

This is where the importance of financial statements comes into play for investors. This also applies to credit vendors and banks who are considering lending money to a company. In these situations, you will need to gain an accurate understanding of how likely you are to be paid back so that you can charge interest accordingly. 

For this purpose, it’s great to have an investor relations dashboard at hand. With metrics such as the return on assets, return on equity, debt-equity ratio, and more, the investor’s dashboard displayed below offers a detailed overview of the company’s financial performance tracked over a period of time. The value of this tool lies in its interactivity, if you want to take a deeper look at some of these indicators you just need to click on it and the entire report will be filtered based on the selected data. 

Financial reporting example for Investors

**click to enlarge**

The importance of financial analysis and statements also applies to stakeholders. If you own equity in a firm or are an activist investor who owns a major equity position, then having full disclosure of all assets, liabilities, use of cash, revenues, and associated company costs is essential. You will also want to understand if the company is doing something it shouldn’t (such as in the case of Enron).

Due to a series of laws known as Sarbanes-Oxley, there is more standardization/legal cooperation within the world of financial data analysis and reporting. These laws are designed to prevent another situation like, and we’ll say it again – Enron – from happening.

3) For internal decision-making

As mentioned, financial reports are not the best tools for making all internal business decisions. However, they can serve as the ‘bedrock’ for other reports (such as management reports) that CAN and SHOULD be used to make decisions.

It’s crucial that financial reports are as accurate as possible – otherwise, any management reports (and ensuing decisions) based on them will be sitting on a shaky foundation. This is where companies can run into trouble, using legacy methods (such as one massive spreadsheet that multiple users have access to) rather than reaping the benefits of financial reporting by utilizing financial dashboards instead.

In fact, a survey conducted by Deloitte to generate awareness about the value of good financial analysis and reports, states that the majority of respondents have identified an “insufficient level of details” as the main issue when it comes to finances reporting. This is due to the fact that the techniques and templates being used are too old. Modern online dashboards put these problems in the past by providing at-a-glance information on the financial health of your company, for both yourself and others in a way that is intuitive and detailed.

Remember: the government (and outside investors) don’t care WHY your financial reports are inaccurate. They’ll just penalize you for being wrong – it’s that cut and dry.

4) For improved internal vision

Financial analysis and reporting are accurate, cohesive, and widely accessible means of sharing critical financial information throughout your organization. If your financial insights or data are fragmented, things can quickly fall apart. In a nutshell, this alone answers the question, what is financial reporting and analysis?

Financial analysis and reporting help to answer a host of vital questions on all aspects of your company’s financial activities, giving both internal and external stakeholders an accurate, comprehensive snapshot of the strategic as well as operational metrics they need to make decisions and take informed action.

5) For building strategies and ensuring profitability

Following the previous point, financial analysis and reporting are critical to building informed strategies and ensuring the business stays profitable. In fact, going back to the Deloitte survey that we mentioned earlier, 67% of the respondents believe that the data included in their financial statements is key to “identifying effective ways to reduce costs and to eliminate potential losses in order to maintain profitability.” 

That said, these types of reports become critical to the financial health of a business. It allows managers and any other stakeholder to build informed strategies that will make the company more profitable while empowering every key player to rely on data for their decision-making process. With the help of modern online reporting software, companies can find trends and patterns in real-time as well as monitor their income and expenses to allocate resources smartly. 

6) For raising capital and performing audits

Our next answer to the question ‘why is financial reporting important?’ is two-fold: for raising funds more accurately and managing your funds more compliantly.

Financial reporting and analysis assists organizations, regardless of industry, in raising capital both domestically and overseas in a well-managed, fluent way – an essential component to ongoing commercial success in today's competitive digital world.

Also, financial analysis and reporting facilitate statutory audits. The statutory auditors are required to audit the financial statements of an organization to express their opinion. Reporting tools or software will give this official concise, accurate, and compliant information – which, of course, is vital.

Your Chance: Want to test a financial reporting software for free? Explore our 14-day trial & take your financial reporting to the next level!

7) For managing financial ratios

Ratios are essential to a business’s fiscal management initiatives - and there are many to consider. In this context, ratios are a representation of the fine juggling act businesses must perform to ensure the entire operation runs with maximum efficiency.

Financial ratios also help investors break down the colossal sets of financial data accrued by businesses. A ratio gives your data form and direction, facilitating valuable comparisons on different reporting periods.

Displayed visually, modern financial graphs and dashboards provide a wealth of invaluable performance-based information at a single glance, offering essential tools for accurate benchmarking and real-time decision-making.

Critical financial reporting ratios include the Working Capital Ratio, Quick Ratio, Return on  Equity (ROE), and Berry Ratio. Armed with this wealth of insight, it’s possible to preserve your company’s financial health while developing initiatives that tip the fiscal balance in your favor, boosting your bottom line in the process. The image below is a visual example of a financial KPI tracking the quick ratio. 

Visual representation of the financial KPI quick ratio to put the value of financial ratios into perspective

Generated with a professional financial KPI tool, the quick ratio is a metric that tracks the short-term liquidity or near-cash assets that can be turned quickly into cash. The point of this KPI, which is also known as the acid test ratio, is to include only the assets that can be easily converted into cash, usually within 90 days or so, such as accounts receivable.

8) For accurate projections & predictive strategies

When considering the importance of financial statements to stakeholders, it’s worth mentioning the predictive power of financial analysis.

We’ve explored how financial dashboards offer dynamic data visualizations from trend spotting and real-time decision-making. Digging a little deeper, fiscal reporting tools also provide comprehensive insights into a range of financial performance and processes. Historic, real-time and predictive data combined offer a balanced snapshot of metrics that help users make incredibly accurate projections based on past or emerging trends.

By making projections based on concrete visual data, it’s possible to develop strategies that benefit financial health while nipping any potential issues in the bud.

Personal financial management provider Mint.com, for example, used predictive analytics to grow its user-base and increase its bottom line. Analyzing a mix of consumer data and key financial performance metrics, the company was able to streamline its processes while offering its customers an end goal, and working backward.

By providing a predictive goal or aspiration, the business worked in reverse (both internally and externally), developing accurate solutions or strategies that offered the best return on investment (ROI) along the way. Not only did this predictive strategy serve to streamline Mint’s internal processes, but the company grew from zero to 1 million subscribers in a relatively short period of time.

Speaking on the company’s financial triumph, senior executive, Noah Kagan, explained:

“Think of it as a road trip. You start with a set destination in mind and then plan your route there. You don’t get in your car and start driving without the hope that you magically end up where you wanted to be.”

9) For lowering risk and preventing fraudulent activities

Expanding on our previous point, the depth of data and predictive capabilities that the financial BI dashboard software offer can mitigate financial risk, significantly.

Working with the right mix of metrics, you will begin to see any potential dips in performance or negative patterns unfold intuitively, which means you can take critical actions that prevent potentially devastating monetary calamities.

Armed with dynamic, visual, and interactive KPIs, not only can you mitigate financial risk and protect your company from glaring inefficiencies, but you will be able to make smarter investments and decisions. Here are some of the KPIs that you should focus on for financial protection, and growth:

  • Gross Profit Margin
  • Net Profit Margin
  • Working Capital
  • Operating Expense Ratio
  • Return on Assets
  • Return on Equity
  • Cash Conversion Cycle
  • Vendor Payment Error Rate

In addition to reducing financial risk across the board, a data analytics dashboard can also protect your business from a fraudulent financial activity. And, considering 46% of companies across sectors have fallen victim to financial fraud in the past two years, protecting yourself from internal or external cyber-related crime matters now more than ever.

Through frequent benchmarking and analysis, you will increase your chances of identifying any abnormalities and investigating the matter immediately. This quick response approach will empower you to get to the root of the problem, tackling the issue while reducing further financial damage.

10) To ensure transparency across the board

As we mentioned time and again throughout this post, reporting on finances is key to the internal functioning of a business. But not just that, financial statements also prove to be very useful to ensure transparency. For instance, a business working in the public sector might be financed by taxpayers or donors, therefore, they need to be accountable for the way they spend the money they have received. For this purpose, financial reports play a fundamental role since they not only ensure that public entities are transparent and compliant but also that people maintain a relationship of trust with these entities.

Another example is with big enterprises, customers are becoming more and more critical of the way companies make business decisions today. By making their financial data public and transparent, big enterprises can build stronger relationships with their customers. For example, by showing their charitable actions or sustainability spending. On the other hand, if you offer long-term services, providing information about your companies financial performance can be a reassurance for potential clients that you can stay in business with them for long periods of time. 

In summary, financial analysis and reporting can help businesses of all sizes to build trusted relationships with investors, shareholders, employees, and even customers. Being able to clearly communicate that the company is doing well financially can bring several benefits.

5 Essential Use-Cases For Financial Reporting

Up until now, we’ve looked at things from a big picture point of view. Now, let’s get a little more tangible and a trifle more down-to-earth by exploring some valuable questions that financial reports (and the reports based on them) can help you answer.

1. Is purchasing this stock a good idea?

If you’re really doing your due diligence on a company that you’re considering investing in as an individual or on behalf of your current organization, financial data analysis and reporting can give you some (relatively) “hard” data that will help you make your decision.

This is also one way you can gain insight into whether a company is potentially under- or overpriced in the stock market.

2. Are we profitable? Will we be in the future?

Without embracing the importance of financial statements, it’s difficult to tell how much money your company is making after paying all of your expenses and payroll. Since one of the main reasons a company exists is to make profits for itself and its shareholders, this is crucial information – no compromises.

3. How much cash ‘runway’ do we currently possess?

If you’ve ever been a part of the management team of a startup, you might have some idea of how stressful it can be not to know if you’re going to be able to ‘make payroll’ in the coming months.

That’s where the importance of financial statements comes in.

Cash is oxygen to a business, and financial reporting analysis can help you see how many months’ payroll your business can give out while remaining financially solvent (assuming that revenue numbers stay the same).

This is a good ‘worst-case scenario’ exercise to conduct regularly – and it’s even more sturdy if you assume that your revenues will fall over the next few months compared to your best guess projections.

4. Do we have the capital to invest in new lines of business?

Some companies, like Apple, like to sit on colossal amounts of cash. Their strategy is to have this money built up so that they can remain financially solvent even if some pretty catastrophic things happen to the economy.

However, other companies prefer to invest their money if they can do so while remaining financially healthy. For example, computer chipset manufacturers like Intel upgrade their factories and equipment on a regular basis.

These upgrades are extremely expensive, and while they are a good long-term investment, the company in question must make sure they have the short-term cash flow to support these kinds of moves.

5. Are my vendor relationships as healthy as they should be?

When considering ‘why is financial analysis important?’ it’s always worth considering your vendors. Whether you’re a service- or product-based business, your vendor or supplier relationships are tightly linked to your company’s ongoing financial health.

If your supplier or vendor relationships are strained, inefficient, or fraught with issues, you will stunt organizational productivity, damage your brand reputation, and ultimately, lose money (frequently).

Typically, your vendors or suppliers will have individual payment processes and credit rules. Streamlined financial analytics ensures payments and transactions remain fluent at all times, especially if used with a modern client dashboard.

Plus, by working with metrics such as Vendor Payment Error Rate, it's possible to keep track of vendor payments while identifying any under or overpayments during a set timeframe. Accessing this level of insight will optimize your vendor or supplier processes, saving time and money in the process.

Your Chance: Want to test a financial reporting software for free? Explore our 14-day trial & take your financial reporting to the next level!

Who Uses Financial Reporting And Analysis?

We’ve already stated the importance of financial analysis and reporting throughout the post and how they serve as communication tools to keep internal and external stakeholders informed and connected. Financial reports are versatile analytical tools that businesses of all sizes use to review their data, stay compliant, and ensure profitability and healthy financial performance. That said, there are various groups that can benefit from financial analysis and reporting for different purposes, some of them include: 

  • Investors, shareholders, and lenders: Investors and shareholders use financial reports to assess the state of their investments and how the company is generating profit.  On the other hand, lenders use them to understand the ability of the company to pay back loans and related interest charges. 
  • Business Managers: Probably more than any other stakeholder on this list, managers are the ones that can benefit the most from financial reports. Having an efficient financial reporting system in place allows them to track performance on a deeper level and build smart strategies that will ensure a healthy and steady financial development. 
  • Regulatory institutions: Tax agents and various governmental entities also gather financial data to monitor that businesses are staying compliant with tax regulations. No matter the business size, paying taxes is an obligation that cannot be evaded. Modern financial analysis allows for an organized view of a companies numbers to ensure that all standard procedures are being followed. More on this point later! 
  • Consumers or customers: Transparency is key when it comes to customer relationships. Companies and enterprises use financial reports as open communication with their clients about earnings, investment activities, or charitable donations. On the other hand, customers can also benefit from financial statements when considering which supplier to select for a contract as they can judge the ability of the supplier to stay in business for a long period of time. 
  • Employees: Modern financial reporting empowers employees from all departments and levels of knowledge to empower themselves with the use of financial data. Through the use of modern dashboard technology employees can visualize important financial information to measure the performance of their activities and make informed decisions. 

3 Different Ways Of Financial Reporting And Analysis

“In a perfect world, investors, board members, and executives would have full confidence in companies’ financial statements… Unfortunately, that’s not what happens in the real world, for several reasons.” – Where Financial Reporting Still Falls Short, The Harvard Business Review article

We won’t get too deep into the ‘financial reporting rabbit hole’ at this point, but we can say with certainty that there are many, many pitfalls associated with this kind of reporting. Some of them are technical pitfalls, while others are ethical (Enron, anyone?).

Right now, it’s enough to understand that there are three main ways that financial reports are standardized, and one critical element to consider when working with EU-based data of any kind:

  • The GAAP (Generally Accepted Accounting Principles). This is the system used by the United States, and almost no one else (just like the Imperial measurement system!).
  • The IFRS (International Financial Reporting Standards). This system is utilized by more than 110 countries around the world, including Canada, Australia, India, and China (although China and India have ‘customized’ the IFRS in their own ways).
  • The GDPR: (The General Data Protection Regulation): The GDPR came into effect on May 25, 2018, designed to modernize the laws that protect the personal information of individuals, which means that if you're handling sensitive financial data of any kind, insights or metrics (involving that of your investors, clients or partners), you must ensure that your reports are compliant.

These differences in standardization have real-world consequences. As the HBR article states:

“Cadbury’s GAAP-based return on equity was 9% — a full five percentage points lower than it was under IFRS (14%). Such differences are large enough to change an acquisition decision.”

5 Common Types Of Financial Reporting

Financial data is not easy to understand, and getting everything together in an infinite Excel sheet makes it even harder to extract valuable information from it. With this issue in mind, is that interactive financial reporting software has been developed to assist businesses in the visualization and analysis of their most important financial data. With technologies such as predictive analytics, automated reporting, and intuitive dashboards, businesses can extract insights in real-life to make important financial decisions. 

We’ve already discussed some of the common types of financial reports theoretically at the beginning of the post. Now, we will cover some visual examples of these types of reports to put their value into perspective. These 5 examples were generated with a professional financial dashboard generator

1) Income Statement

This particular report tells you how much money a company made (or lost) in a given time period (typically a fiscal year). It does so by showing you revenues earned and expenses paid, with the ultimate goal of showing a company’s profit numbers.

Visual of a financial business report example for top-management

**click to enlarge**

Primary KPIs:

  • Gross Profit Margin Percentage
  • Operating Profit Margin Percentage
  • Operating Expense Ratio
  • Net Profit Margin Percentage

2) Balance Sheet

This piece of financial reporting software offers a snapshot of your assets and liabilities (aka debts) at a given moment in time. It’s definitely possible to fall into bother with your profitability and cash flow situations while having a healthy balance sheet (especially if you have a lot of money tied up in physical inventory), and this report will help you dig deeper, assisting your strategic decision-making.

A balance sheet is a good overview of the assets and debts of your company at a specific moment

**click to enlarge**

Primary KPIs:

  • Return on Assets
  • Return on Equity
  • Working Capital

3) Cash Flow Statement

This report shows how much money flowed into and out of your business during a period of time. The cash flow statement is crucial for things like making sure you have enough money to make payroll.

Your Cash Flow Statement is very important to know if you have enough money for payroll; it shows you how much money went in and out of your business

**click to enlarge**

Primary KPIs:

  • Current Ratio
  • Accounts Payable Turnover
  • Accounts Receivable Turnover

Our next two financial analysis report examples are full dashboards that host a mix of visual metrics and KPIs, offering a complete picture of a company’s fiscal activities in action. Let’s take a look.

4) Financial KPI Dashboard

Offering an essential snapshot of vital financial performance data, a robust financial KPI dashboard offers a cohesive mix of tables, graphs, and charts designed to maintain fiscal health. Working with KPIs such as Working Capital, Cash Conversion Cycle, Budget Variance, and more, this dynamic financial reporting system will empower you to reduce inefficiencies, make accurate forecasts, and keep cash flowing through the organization effectively.

A financial dashboard showing relevant metrics such as the current working capital, cash conversion cycle, and vendor payment rate

**click to enlarge**

Primary KPIs:

  • Working Capital
  • Quick Ratio / Acid Test
  • Cash Conversion Cycle
  • Vendor Payment Error Rate
  • Budget Variance

5) CFO Dashboard

Also known as the ‘CFO cockpit’, this powerful CFO dashboard provides a digestible glance at high-level fiscal metrics and essential economic trends. With detailed insights into the likes of employee satisfaction and Berry Ratio, here you will find everything you need as a senior decision-maker to identify emerging trends, make informed organizational decisions, and meet (or even exceed) your profit targets consistently.

Financial reporting and analysis example: CFO dashboard

**click to enlarge**

Primary KPIs:

  • Payroll Headcount Ratio
  • Economic Value Added (EVA)
  • Berry Ratio
  • Employee Satisfaction
Your Chance: Want to test a financial reporting software for free? Explore our 14-day trial & take your financial reporting to the next level!

So, What Is The Purpose Of Financial Reporting? 

To reiterate: What is the importance of financial reporting? Thoughts or feelings aside, financial reporting will be around as long as businesses are trading.

Why? Governments will never stop collecting taxes and commanding compliance. Across sectors, businesses will always need to track their fiscal activities with pinpoint accuracy - and finance reporting is the best way to do so.

In addition to paying taxes and remaining compliant in the eyes of the law, financial reporting tools give businesses the capabilities to make their fiscal activities all the more strategic, streamlined, and forward-thinking. In that sense, financial reporting tools are both functional and progressive, empowering users to accelerate the growth of their business by taking charge of their financial health.

While you may not be able to choose if or how you prepare financial reports, you can at least take control of how you present them. With a financial, real-time dashboard, you can see your company’s financial integrity at a glance, empowering you to make better choices while responding to constant change.

To get started with finance-based reporting, try our financial analytics software with a free 14-day trial. It’s time to take your business to the next level.