In the world of digital advancement and the ease of social media allowing you to grow a business, there are so many new and thriving business out there. It has become such a simple task to set up your own store, start selling and start earning yourself a living. However, with an increase amount of supply, there will be a decrease in demand since everything you could ever want is so easily sourced nowadays with the power of the internet.
So how do you make sure that your small business not only survives, but also thrives? One of the not so popular ways to do this is by keeping a very watchful eye over your reports and processes which are also known as your Standard Operating Procedures (SOPs).
Reporting in a business or a company might seem like a given but how many of you really pay attention to those reports or use them to your benefit. A lot of very crucial information is in those reports that can help you push and propel your company forward. As mentioned in previous articles, annual reports can and will help you make better decisions regarding your business and this will only get better the more you pay attention to your reports.
In this article, we wanted to focus mainly on annual reports and what we believe should be included in these annual reports. If you are a company that is listed in the stock markets, you would be required to publish your annual reports and be subject to public scrutiny. So, that just shows you just how important annual reports are to the health of any company.
So, what do you include in an annual report?
Usually, an annual report includes a report from the CEO, the annual balance sheet as well as the cash flow statement of the company for the year.
In these reports, you will usually see the highlights of the past year. Highlights like economic highlights, financial highlights as well as big business changes that might have happened along the past year.
The annual report will also include every departments highlights and achievements across the year. The next big things will be the mentioned financial report which is usually the main reason an annual report is created in the first place.
So, you will normally find a balance sheet, your profit and loss statement as well as your cash flow statement in your financial statement.
Annual reports also include more things like :
- Charts, graphs and photos that is able to construct a snapshot view of your business within the past year.
- An auditors report to prove that all the information stated in the report is real and checked out.
- Business forecasting.
- Business strategies and plans for the upcoming year.
What Is The Overall Significance of Annual Reporting?
Annual reporting has always been a significant part of small businesses. In this case, most small businesses in Malaysia would need to use these annual reports to report back to the public and private investors about the current state of the business.
The benefits of annual reporting for a small business are as follows :
A) It Helps Your Strategise
There are so many things happening during the year, so when you have that report, you can use it to look back when things get tough. It helps to be somewhat of an anchor, to hold you back when the seas get rough.
B) It Helps Asses If Your Yearly Goals Are Met
With every business come goals. It will not be very smart of you if you don’t set goals up for your company. Goals are not just financial, they can also be operational or with regards to human resources. The annual report can clearly show the progress you’ve made by a much larger margin.
An annual report does seem like it is a very valuable asset that can help you bring your team together at the end of the year. However, it’s not just your investors or teammates that require annual reports. The Malaysian government also requires you to submit financial reports to them at the end of every business year.
This year, the government and Suruhanjaya Syarikat Malaysia have come up with a new reporting system called the Malaysian Business Reporting System. This system was made to allow for digital reporting and a much more easier way to send your financial reports to the government at the end of the year.
However, since it’s a new software, SSM has partnered with us to ensure that everyone can learn how to use to software at their own pace. Head on over to one of our workshops so that you or your teammates like your finance executive, or your HR manager to learn how to properly use the software.