How can you write clear and concise financial reports?

1 Choose the right type of report

Depending on your purpose and audience, there are various financial reports you can use. These include the income statement, which shows revenue, expenses, and net income for a specific period; the balance sheet, which displays assets, liabilities, and equity at a given point in time; the cash flow statement, which provides information on cash inflows and outflows from operating, investing, and financing activities for a certain period; the budget, which outlines planned revenue, expenses, and net income for a future period; and variance analysis, which reveals differences between actual and budgeted figures. Ultimately, you should select the report that best suits your goal - be it to monitor progress, evaluate performance or plan future actions.

2 Use a standard format and structure

Using a standard format and structure for your financial reports can make them easier to read and understand. You can follow the generally accepted accounting principles (GAAP) or the international financial reporting standards (IFRS) as guidelines, or use templates and software that are available online. The title should indicate the name of your business, the type of report, and the period covered. Headers should label the main sections and sub-sections of your report, such as revenue, expenses, assets, liabilities, etc., while columns should show the amounts and percentages of your financial figures. Rows should display the breakdown of your financial figures into categories and sub-categories, such as sales, cost of goods sold, rent, utilities, etc., while totals should show the sums and subtotals of your financial figures. Notes should provide additional information and explanations for your financial figures, such as assumptions, estimates, methods, etc.

3 Use clear and concise language

Using clear and concise language for your financial reports can make them more effective and persuasive. Avoid jargon, slang, and acronyms that your audience may not understand, and use simple and precise words that convey your message. Additionally, use consistent and appropriate terms that match your type of report and industry. To ensure clear language, opt for active voice instead of passive voice, keep sentences short and simple, use bullet points and lists to highlight key points, show data and results with numbers and figures, and use charts and graphs to visualize data and trends.

4 Review and edit your report

Reviewing and editing your report can help you eliminate errors, improve clarity, and enhance quality. Before submitting, you should check for accuracy, completeness, and consistency in your financial figures. Additionally, it's important to review your report for grammar, spelling, and punctuation, and make sure that your language is clear, concise, and professional. To ensure that your format and terminology are consistent and appropriate, you can use a spell-checker and grammar-checker such as Microsoft Word or Grammarly. Additionally, a calculator and spreadsheet such as Excel or Google Sheets can be used to verify and calculate your financial figures. Finally, you can get feedback and suggestions for improvement by having a peer-reviewer or proofreader such as a colleague or friend review your report.

5 Tailor your report to your audience

Tailoring your report to your audience can help you achieve your purpose and engage your readers. It is essential to consider the needs, expectations, and preferences of your audience, as well as their level of knowledge, interest, and influence. To tailor your report to your audience, you should use a tone and voice that suits them, such as formal or informal. Additionally, use a format and layout that appeals to them, such as color or font. You should also consider the level of detail and depth of analysis that matches your audience's needs. Finally, use a perspective and focus that resonates with them, such as positive or negative.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?