Annual report - What is an annual report?
A report created annually that provides an analysis and assessment of the financial trends of the business over the past year
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An Annual Report generally consists of:
- A description of the accounting activities seen within the report. For example, a description of the principles used for determining the accounting items in both the income statement and the balance sheet.
- Information on the events that have influenced the company's accounting throughout the year.
- A statement from management showing an accurate picture of the company’s economic standing and development.
- An auditor's report, if applicable.
Note: not all companies are required to prepare an annual report. It depends on the company's legal form and size.
Overview of your business finances
An annual report can help in understanding the strengths and weaknesses of a company's financial situation since it provides an outline of corporate earnings.
Annual reports can also be used to give an overview of the company’s financial situation to relevant parties, such as creditors and other collaborators. It can also be used as a resource to figure out how the financial situation of a company can be improved.
Credibility and your annual report
It is important to have an accurate and credible annual report as it is used to assess your ability to obtain credit and borrow money should your business require funding. However, the annual report does not indicate tax considerations. Those must instead be shown through tax accounting.
Annual report and Debitoor
Invoicing and accounting software such as Debitoor makes it easy to keep track of your company’s financial events and provides a comprehensive overview of your accounts. This consistent level of organisation makes the creation of an annual report much easier.