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As a business owner, you have plenty of balls in the air at all times - you need to keep track of everything from cash flow, to sales numbers, to general market trends. There are plenty of regulatory documents that you are required to file, but what about analyzing all of the data relevant to your business to help you make better business decisions and grow? That’s where business reporting comes in.
No matter how big or small your company is, you should make business reporting a regular habit. These reports will give you insight into the health of your business and allow you to easily identify areas that need your attention for improvement. Business reports don’t necessarily provide you with a definitive answer in terms of next steps to take, but rather give you all the data needed in order to make good decisions.
What is the Purpose of Business Reporting?
The purpose of most business reports is to summarize and/or analyze a particular business-related topic in order to inform decisions and influence significant business results. Business reporting is most likely to be used for one of the following scenarios:
- To analyze possible solutions to a particular challenge.
- To determine how to apply specific management theories to a situation in order to suggest ways to improve.
- To evaluate and draw conclusions about an issue or challenge.
- To provide suggested actions and next steps for the business.
Business reports are usually internal documents (meaning, they aren’t designed to be submitted to regulatory bodies like certain legally required financial reports) and are an excellent tool for any business owner to fully investigate issues that may arise and make the most informed decisions. The most important element needed to create an actionable business report is data. In today’s highly technical world, there are many automated tools that can help collect and analyze data to make business reporting a much easier and more streamlined process.
Regardless of the type of business reporting you aim to do, the process to follow will always be along these lines:
- Identify the key issue - you need to know what question your report is aiming to answer. For example, if you’ve noticed that sales are slower than they were at this same time of year last year, you may want to use data to help you investigate why this is happening.
- Analyze the issue - there is probably no limit to the amount of data you can gather, so you’ll want to pick the angles that you want to explore. The more angles you examine, the more insights you might come up with. For example, if your sales are lower than last year, you can use the data to look at the number of transactions and transaction sizes to get more information about the situation.
- Make informed decisions - once you have the full picture, you are in a better position to decide what steps to take next, if any. For example, if the data shows that transaction sizes were much smaller than before you could consider introducing promotions that encourage larger purchase amounts like $30 off of a $100 purchase.
5 Main Types of Business Reporting
Some entrepreneurs may like to do a business daily report to keep tabs on everything that’s happening on a daily basis. While that may be a useful tool in some situations, if you are doing such a report daily, it is probably not worth the time to go super in-depth. You also may not uncover any significant trends if you are looking at changes on a daily basis, so you may want to also review them on a weekly or monthly basis to see if you can spot any useful data.
When it comes to more in-depth reports, there are 5 main types of business reporting:
Research Report
Research reports are very important when a business is considering entering a new geographical market or launching a new product. This type of business reporting includes statistics and details about the new location or target audience for a new product. Most companies will hire a market research analysis firm to create this type of report. Based on the information provided, a better decision can be made as to whether and how to go forward with the new market, launch or other plan.
Analytical Report
There are a few different types of analytical business reports, and they tend to be used when deep analysis is needed in order to make a critical decision. Both qualitative and quantitative data are used to analyze the current situation and try to predict the outcome of making potential changes. Tools that offer analytics dashboards are helpful in producing analytical business reports. Two key types of analytical reports are financial analysis and market analysis:
Financial Analysis
Companies often produce financial analysis reports on a regular basis to make sure they are on the right track in terms of their revenue and profit projections. The reports will flag any major deviances from the forecasts and data can help to explain why these variations have occurred.
Market Analysis
Market analysis is used to help companies understand what the market for their particular product looks like in broad terms and what is trending. If, for example, market analysis predicts that the market is going to grow, a company may allocate more resources to their marketing budget in order to attract a bigger piece of the growing pie of potential customers.
Performance Report
A key use of business reporting is to track KPIs and make sure that things are going according to plan and that the company is performing as expected. Performance reports can show performance across various timeframes so that any significant variances can be flagged and investigated.
Operational Report
One type of performance report is an operational report that can help identify inefficiencies in the way a company is conducting its day-to-day operations.
Inventory Report
No business wants to get caught in a situation where a customer is placing an order and there is no inventory available to fulfill the order. Regular inventory reports provide an up-to-date picture of what’s in stock and what needs to be ordered. Keeping track of inventory can also reveal trends such as which products are popular and which sit on the shelves for long periods of time with no sales. Many inventory reports use industry benchmarks as comparisons so that any company can see where it stacks up against its competitors.
Trend Report
Analysis of statistical trends regarding consumer behavior and growing demographic groups can really help with business development and choosing the areas in which to focus growth. A trend report provides this information, looking at the recent trends in any area of particular interest and relevance to the business. Staying on top of emerging trends is a good way to keep one step ahead of competitors.
Benefits of Business Reports
There are many benefits to business reporting that go beyond the useful insights that can be gleaned and the significant business results that can be realized. Some of the key benefits include:
- Assessment of top risks and opportunities - business reporting can help you get a much better and deeper understanding of all of the risks and potential growth opportunities that are open to your business. With all of the information laid out clearly in front of you, making decisions becomes much easier.
- Identification of trends - comparing your business against competitors or industry standards can help you identify trends that you might otherwise have missed. You might realize that you are underperforming in a particular area and can then determine action steps to beef up your performance.
- Support of management - for those who work in larger companies, presenting a business report is a good way to get support for your ideas from management. Presenting an in-depth analysis and conclusions backed by data will shore up your recommendations and help to get approval from management so that critical changes can be implemented quickly.
- Efficiency - strong, useful business reporting is a huge time-saver in identifying the bottlenecks and issues that are holding back a company from working at peak efficiency.
- Accuracy - it’s easy enough to make broad statements about what needs to be done to improve a company’s bottom line. But it’s much more impactful when these statements can be backed up with data that prove their accuracy. Business reporting - especially when using data collection and analysis tools - can easily provide this accuracy in a concise way.
- Engagement - if you need to make a presentation to investors or otherwise present information about your company, having some existing business reports can help you tell an engaging and compelling story.
Company and Business Report Examples
A simple Google search will yield you plenty of examples of business reports that you can use or you can create your own template. Any help you can get from technological tools will make it easier for you to draw out the data you need to make your reports actionable and useful.
Whatever topic your business report is going to cover, your first step must be to determine the goals of the report and who the audience will be that will read the report. If it’s for your own use, for example, it will be very different than if it’s a presentation to your top investor.
Don’t forget that in some cases, an entire business report can be summed up just using strong visuals, such as the following examples:
Financial Report Example
By putting all of the relevant financial KPIs in one place, it’s easy to get a clear picture of where the company stands and how well it’s faring in meeting targets.
Investor Report Example
Giving investors a clean and clear vision of the company’s status will help them see the success of their investment.
Revenue Report Example
Revenue is one of the most important KPIs that can be measured. Below is an example of revenue and how it was earned during a specific time period. Most tools provide the option of changing the date range so that the same information can be provided for any time frame.
What Pay Offers
As mentioned a few times in this article, many technological tools exist to help you create the most impactful and effective business reports. Most businesses will use an assortment of different tools in order to get the information that is most needed.
For ecommerce businesses, the Pay.com dashboard may just be all that you need.
[insert image of dashboard]
When you use Pay.com for your payment infrastructure, the system collects a lot of useful data about transactions and customers that you can then use for all of your business reporting needs. Such information includes:
- Customer details, including location and whether they are a repeat buyer
- Payment methods
- Revenue for the time frame of your choice
- Year over year analysis
- Cash flow details
- KPI tracking
- Subscriptions
- Refunds and returns
You can generate the reports you need at the click of a button so that you’ll always have a real-time view of your key business statistics. You can use this information on its own or to supplement any of your other business reporting activities.
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