Why Business Reporting Is Important For Business Success


Business reports are valuable and essential tools for any enterprise regardless of size or industry. They provide a means to track and analyse the performance and overall health of the business while identifying areas for improvement and opportunities for growth. Some business reporting is necessary as part of a regulatory requirement. For example, financial reports are a legal necessity for all businesses as determined by the Government of the country in which the business is based. Regular business reporting and monitoring are also necessary for many organisations to keep senior management, board members and other stakeholders advised on what is happening within the organisation.


The purpose of business reporting

The aim of a business report is to provide critical analysis of how the business is tracking in all areas of the organisation. Business reports are important tools to guide decision-making and to allow business owners and senior managers the opportunity to investigate and solve any identified issues. Reporting is done through the process of compiling and reviewing the information within a specific functional area such as finance, sales, operations, inventory control or any area of the business where performance is monitored and measured. Once information is gathered and reviewed, conclusions can then be drawn and recommendations made. The outcome of the report may explain why an issue has occurred or may identify performance problems and generally will recommend a course of action.

Business reports in action

Different reports will provide distinct value for all functional areas of an organisation. Examples of some common reports include market analysis, trend analysis and financial analysis as well as operational and performance reports.

Inventory stock reports

Inventory stock records report on the movement of inventory into and out of the warehouse. They help a business identify any problems affecting performance such as product loss, obsolescence or dead stock.

Market analysis reports

They help business owners decide how to allocate their resources. For example, when an analysis of the market concludes that the ensuing business year will see accelerated growth, companies can increase their marketing budget to take advantage of this.

Trend analysis reports

These reports support long-term business development by examining statistical trends such as consumer preferences and the demographic groups that are experiencing the quickest growth rate. The objective of a trend analysis report is to identify growth opportunities to enable businesses to build market share ahead of competitors.

Financial reports

Financial reports are generally prepared on a regular basis by most companies and help to keep them on track toward achieving revenue and profit objectives. These reports highlight any variances in the financial results compared to forecasts in the annual business plan and will explain the reason for any significant negative variance.

Operational analysis reports

These reports show how efficiently a company is operating and will recommend ways to further improve productivity. An analysis of inventory control might indicate that the company experiences periodic shortages of key raw materials that prevent timely order fulfilment. The report may recommend that the company look for back-up suppliers of essential items to ensure availability when needed.

Performance reports

Monitoring performance trends help the company to set KPIs, benchmarks and business goals based on the most important aspects of the business. Performance reporting allows the business to compare performance over different timeframes and report objectives should always align with KPIs to demonstrate if these have been met or even exceeded.