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To stay on top of numbers, companies use financial

reports.

REPORTING Financial reports are formal documents that capture all

the significant financial activities within a business in a

How to Write a Great Financial specific period.

Report? Tips and Best Practices While these reports are extremely useful for you and your
key stakeholders, you won’t be the only one reaping the
Want to impress key stakeholders and potential investors fruits. Financial statements are also examined by
through your financial reports? Here’s everything you need potential investors and banks since they provide them
to know. with enough insight to determine whether they want to
invest in your business.

Filip Stojanovic (author/fstojanovic) on February 24, 2022 (last modified on April 8, 2022) • 17 minute read In this article, we are going to walk you through what
financial reports are, why they are significant and show
you a step-by-step guide that will take your financial
reports and business reporting
(https://databox.com/business-report) as a whole, to the
next level.

To make informed financial decisions in your company,

· What Is a Financial Report?
you first have to be, well, informed.
· What Is the Purpose of Financial Reporting?
Understanding the financial activity of your company sets
· What Are the Types of Financial Reporting?
the foundation for identifying good business
opportunities and making the right decisions to ensure · How to Write a Financial Report?
future growth.
· Finance Report Examples
 · Improve Financial Reporting with Databox At bottom, financial reports provide you with insight into
how much money you have, how much did you spend,
and where it is coming from. Based on the data within
the report, you can make informed business decisions and
create plans for future spending.

The key things a financial report should include are:

· Cash flow data

· Asset and liability evaluation

· Shareholder equity analysis

ttps://databox.com/dashboard-examples/quickbooks-hubspot-crm-financial-performance?utm_source=blog-pos
a&utm_medium=banner-cta&utm_campaign=hubspot_quickbooks_financial_overview_dashboard_databox)
· Profitability measurements

Related: Quarterly Business Review: How to Write One

What Is a Financial Report?
and How to Present It Successfully
Financial reports are official company documents that (https://databox.com/quarterly-business-report)
showcase all the financial activities and performances of
your business over a specific period. Usually, they are
What Is the Purpose of Financial
created on a quarterly or yearly basis.
Reporting?
Every business is legally obliged to use financial reporting
Financial reports are used to track, analyze, and display
to display its current financial status and organize
your company’s cash flow
financial data.
(https://databox.com/dashboard-examples/cash-flow).

The documents are available for public view which means

Understanding how your business is performing from a
that potential banks and investors will most likely analyze
financial standpoint can seem like an impossible task
them before they decide to work with you and invest in
without these reports.
your business.
However, financial reports aren’t used only because they
They are also important for tracking future profitability
are practical; you are legally required to include them.
estimates, business growth, and overall financial health.
Here are some of the main ways in which financial
reports can help your business:
· Communicate essential data
· Monitors income and expenses
· Supports financial analysis and decision-making
· Compliance
· Simplify your taxes
Communicate essential data
Having an insight into the current financial situation of
your business is important to each high-ranking member
of the company (stakeholders, executives, investors, and
partners).
You will use this financial data to create budget plans and
monitor the company’s overall performance. When you
establish an open communication and transparency policy
within your business, you are more likely to attract new
investors and enhance funding.
The information communicated in financial statements is
what investors rely on when they are assessing risks,
profitability, and future returns.
Monitors income and expenses
Financial reporting involves tracking incomes and
expenses for a specific time period. To establish efficient
debt management and budget allocation, you will need
an insight into the most important spending areas
(https://www.fylehq.com/blog/spend-management).
By tracking income and expenses
(https://databox.com/dashboard-examples/expenses),
you will also understand current liabilities and assets.
Analyzing financial documentation will provide you with
a bigger picture regarding the key metrics such as debt-
to-asset ratios that investors use to calculate potential
profitability.
All of this is information is crucial for staying ahead of
your competitors.
Related: How to Write a Great Business Expense Report:
A Step-By-Step Guide with Examples
(https://databox.com/business-expense-report)
Supports financial analysis and decision-making
The performance analysis in financial reports is what you
rely on to make better business decisions.
Considering the different data that financial reports
include, you can check out real-time information
regarding historical performances, key spending areas,
and use them to create accurate financial forecasts.
Implementing detailed financial analysis and using
developed data models can help any business better
evaluate current activities and make future business
growth decisions.
You will be able to recognize trends, potential problems, Simplify your taxes
and stay on top of your financial performances in real-
No matter how big or small your business is, doing taxes
time. This sets the foundation for quick and accurate
can be a stressful task.
economic decisions.
By creating accurate financial reports, you can make tax

Compliance calculation a lot easier since you will minimize any

chances of error and save time by including all financial
The main purpose of financial reports is to make sure data in one document.
your business is in compliance with the law and
regulations of government agencies. Not only that, since financial reports are a legal
requirement, the IRS uses them to evaluate the tax
Regulatory institutions examine every document that income of each individual company.
evaluates the financial activities of your company. This is
why making accurate financial documentation is crucial
for the well-being of your business.
What Are the Types of Financial
Reporting?
Aside from accuracy, you will also have to follow certain
While financial reports all have the same goal, there are a
deadlines that these institutions set. This sometimes
few different types that you should know about.
causes pressure in accounting departments to create
complex financial reports quickly and accurately, which is
This isn’t only a matter of compliance or best practice,
why regular bookkeeping is immensely important.
these reports are key for understanding the different
segments of cash flow.
In the US, private and public companies have to be
compliant with the GAAP (Generally Accepted Accounting
Here are the main types of financial reporting:
Principles), while international companies mostly report
under the IRFS (International Reporting Financial · Balance Sheet
Standards).
· Cash Flow Statement
Both of these organizations provide some standard · Income Statement
guidelines but there are a few differences you will have to
pay attention to when creating your financial statements. · Shareholder Equity Statement
Balance Sheet to cover their debts. Also, it provides insight into fund
operations, investments, and the overall activities that are
A balance sheet
generating revenue.
(https://www.accountsandlegal.co.uk/accounting-
advice/how-to-read-a-company-balance-sheet) is a
This statement is helpful for investors since they can use
financial statement that tracks the total amount of assets,
it to determine whether your business presents a good
liabilities, and shareholder equities within your company.
investment opportunity (https://databox.com/investors-
They also provide you with a real-time evaluation of asset
report).
liquidity and debt coverage.
While balance sheets incorporate certain calculations to
Most companies create balance sheets on a quarterly basis
determine financial values, cash flow statements are
and include the data from each quarter in the annual
consisted of three main elements:
report.
· Operational activities – inventories, wages, tax
When creating a balance sheet, there is an asset page
income, accounts receivable, accounts payable, and cash
(includes available cash, equipment value, inventory
receipts
value, etc.) and a liability page (includes accounts
payable, credit card balances, bank loans, etc.) that you · Investment activities – investment earnings use,
need to fulfill. investment earnings generation, asset sales, issued
loans, payments from mergers
Once you total these assets and liabilities, you will
· Financing activities – payable dividends, debt
subtract liabilities from the assets. The amount you get is
payments, debt issuance, cash from investors, and stock
what is called ‘owner’s equity’.
repurchases

Cash Flow Statement

Income Statement
This is a financial statement that records all the different
The income statement records the company’s expenses,
cash flow activities in the company.
revenue, and net loss/income over a specific time period.

Cash flow statements track cash generated and cash spent

Balance sheets focus on the current activities and
amounts in a specific time period. This report is crucial
performances while income sheets track them over a
for measuring whether companies generate enough cash
longer period. Businesses tend to track income statements
each quarter to gain better insight into the different
financial processes that occur.
Income statements include profits and losses
(https://databox.com/dashboard-examples/profit-and-
loss), which is why they are also called P&L statements
(Profits & Losses).
The main elements included on the income statement are:
· Operating revenue – financial data regarding sales of
products or services
· Net and gross revenue – includes the total sales
revenue and remaining revenue (after the cost
subtraction)
· Primary expenses – these include general costs,
administrative costs, depreciation and selling, and
COGS (cost of goods sold)
· Secondary expenses – capital loss, asset loss, debt
interest, and loan interest
· Nonoperating revenue – this is revenue that comes
from accrued interest, it includes investment returns,
capital gains, and royalty payments
Shareholder Equity Statement
Even though shareholder’s equity is usually included on
the balance sheet, larger companies tend to report these
activities on a separate statement.
This statement tracks the amount of money key
stakeholders invest in the business. The investments most
commonly include company stocks and securities. After
dividends are released to stockholders, the retained
earnings in the company change.
Stakeholder equity statement includes these key
components:
· Retained earnings after dividends and losses have been
subtracted
· Common/preferred stock sales
· Purchased treasury stock
· Generated income (including the income that comes
from unrealized capital gains)
Pro Tip: How to Stay on Top of the
Financial Health of Your Business
Do you own and manage a small business? Then you
know how much of a struggle it can be to stay on top of
the financial health of your business on a daily basis. Now
you can pull data from QuickBooks and HubSpot’s CRM
to track your key business metrics in one convenient
dashboard, including:
1. Open deals and deal amounts by pipeline stage. Get Step 1: Get the template
sales data directly from your HubSpot CRM and track
Step 2: Connect your HubSpot and Quickbooks accounts
deals, deal amounts, deal stages, and dates from your
with Databox.
sales pipeline.
Step 3: Watch your dashboard populate in seconds.
2. Key financial data. Track gross profit margin, open
invoices by amount and by customer, paid invoices, Get the template free (https://databox.com/dashboard-examples/quickbo
expenses, and income from QuickBooks.

Now you can benefit from the experience of our HubSpot

CRM and QuickBooks experts, who have put together a
plug-and-play Databox template
(https://databox.com/dashboard-examples/quickbooks-
hubspot-crm-financial-performance) that helps you
monitor and analyze your key financial metrics. It’s
simple to implement and start using, and best of all, it’s
How to Write a Financial Report?
free! Financial reports help you understand your company’s
financial performance, attract potential investors, and are
legally required. This is why you have to make sure that
they are as accurate as possible.

You want your financial reports to be comprehensive,

understandable, and precise.

Even though creating a good financial report can be very

complex, we are going to show you a step-by-step guide
that will make the whole process much easier.

Follow these steps to create a great financial report:

(https://databox.com/dashboard-examples/quickbooks-hubspot-crm-financial-
performance)

You can easily set it up in just a few clicks – no coding · Step 1 – Make a Sales Forecast
required.
· Step 2 – Create a Budget for Expenses
To set up the dashboard, follow these 3 simple steps:
· Step 3 – Create a Cash Flow Statement

· Step 4 – Estimate Net Profit

· Step 5 – Manage Assets and Liabilities

· Step 6 – Find the Breakeven Point

Step 1 – Make a Sales Forecast

When making a sales forecast, the first thing you should

do is create a spreadsheet that includes your sales
performance from the last three years.

Use a specific section for each line of sales and organize

columns for each month of year one. For years two and
three, organize columns on a quarterly basis. Step 2 – Create a Budget for Expenses

Create three different blocks – one for pricing, one for
10:00
unit sales, and the third one for multiplying units by unit
cost (to calculate the cost of sales).
Cost of sales is important because it helps you calculate a
precise gross margin.
Once you do the math, you can make an accurate sales
forecast that is backed up by historic financial data.
PRO TIP: If you are using HubSpot CRM to visualize your
sales data, watch the video below to learn how to set up
and track your HubSpot CRM data in order to more
accurately forecast your sales (https://databox.com/how-
to-forecast-sales-using-hubspot-crm-databox) this month,
quarter, and beyond.
Once you have made a sales forecast, you will want to
calculate how much it will cost you.
When creating an expense budget, you should include
both fixed costs (rent, payroll, etc.) and variable costs
(marketing and promotional expenses). Costs such as
interest and taxes can’t be completely accurate, so you
are going to have to make rough estimates.
For taxes, you can multiply the estimated debt balance by
your estimated tax percentage rate.
To estimate interest, multiply your estimated debt balance
by an estimated interest rate.
Step 3 – Create a Cash Flow Statement
We already mentioned what cash flow statements are and Step 5 – Manage Assets and Liabilities
why they are so important for your business. They are
In order to estimate your business’s net worth
typically created based on the sales forecast, balance
(https://www.personalcapital.com/financial-
sheet components, and other estimates.
software/net-worth) at the end of a fiscal year, you have
to be able to manage assets and liabilities that won’t be
To make cash flow estimates, companies should use
shown in the profits and loss statement.
historical financial statements. If your business is
relatively new, you should project cash flow statements by
Come up with a rough estimate of how much money you
breaking them down into 12 months.
expect to have on hand each month and include accounts
receivable, inventory, land, and equipment.
Your way of invoicing is also linked to cash flow
estimates.
After that, calculate liabilities, debts from outstanding
loans, and accounts payable.
For example, if a customer has the right to pay for your
services after 30 days, the cash flow statement will show
that you only collected 80% of your invoices within the Step 6 – Find the Breakeven Point
month (while you need 100% to cover the expenses).
You know that you have found a breakeven point if your
business expenses (https://databox.com/business-
Step 4 – Estimate Net Profit expense-report) are in line with the sales volume.

To estimate net profit, you should use the numbers from

The three-year income estimation should help you acquire
your sales forecast, expense estimates, and cash flow
this analysis. In viable businesses, the total revenue
statement.
should exceed total expenses.

You can calculate the net profit by subtracting expenses,

For potential investors, this kind of information is crucial
interests, and taxes from the gross margin
since they want to be reassured that they are investing in
(https://databox.com/good-profit-margin-new-business).
a company with steady growth.

This step is extremely important since it serves as a profit

and loss statement that helps you create a detailed Finance Report Examples
business forecast for the next three years.
Nowadays, most companies use different tools and
templates to make their reporting process easier. Using
dashboards can help you track the metrics you obtain
from the financial management tools that your business
integrates.
To gain valuable insight into the sales and expenses that
incur in your business, you can use the QuickBooks Profit
and Loss Overview Dashboard
(https://databox.com/dashboard-examples/quickbooks-
profit-loss-overview).

Databox offers pre-built financial templates that can help
you track the most important financial metrics
(https://databox.com/financial-kpis) in one place.
With our comprehensive dashboards, you can follow the
most significant numbers and later include them in your
financial report, making the whole process less time-
consuming.
Make sure you are staying on top of your numbers by
tracking monthly, quarterly, and yearly income. Also, this
report will help you figure out how profitable your
company is and which areas may need to be fixed.
Some of the key metrics you can follow are net profit,
income by month, expenses by month, and profit margin.

We understand that each business is different, which is

why you can also customize the reports in any way you
deem fit and at any time.

Here are some of our most popular financial reports that

you can try out:

· Quickbooks Profit and Loss Overview Dashboard

· Xero Profitability Overview Dashboard

· Stripe (MRR & Churn) Dashboard

· Profitwell Revenue Trends Dashboard

· PayPal (Account Overview) Dashboard ttps://databox.com/dashboard-examples/quickbooks-profit-loss-overview)

ofit and Loss Dashboard Example

QuickBooks Profit and Loss Overview Dashboard

Xero Profitability Overview Dashboard
Xero is one of the most popular accounting systems that
companies use to manage their financial positions.
However, it can sometimes be hard to organize the large
amount of data this tool provides.

This is where the Xero Profitability Overview Dashboard

(https://databox.com/dashboard-examples/xero-
profitability-overview) can come in handy. This
customizable template will provide you with a
comprehensive view of the sales and expenses that go
into your Xero system.

Once the time comes for creating a financial report, you

can simply integrate the data you gathered in this
dashboard. ttps://databox.com/dashboard-examples/xero-profitability-overview)
ofitability Overview Dashboard Example

The key metrics it includes are net profit, income by

month, expenses by month, profits, losses, gross profit,
Stripe (MRR & Churn) Dashboard
and other income.
Use the Stripe Dashboard
(https://databox.com/dashboard-examples/stripe-mrr-
churn) to monitor your churn rate and track MRR growth
in real-time. Also, you can check how many customers
your business currently has at any given time.

Once you connect your Stripe account to this template,

you will be able to answer these questions:

· How much money did I make through sales today?

· How can I track my MRR (Monthly Recurring Revenue)?

· How many active customers do we have?

 · How much revenue did I lose from churned customers?
Some of the metrics you can visualize are churn rate goal,
customer churn rate, gross volume, revenue churn, and
customers.
ttps://databox.com/dashboard-examples/stripe-mrr-churn)
RR & Churn Dashboard Example
ttps://databox.com/dashboard-examples/profitwell-growth-overview-dashboard)
evenue Trends Dashboard Example
Profitwell Revenue Trends Dashboard
Profitwell Revenue Trends Dashboard
(https://databox.com/dashboard-examples/profitwell-
growth-overview-dashboard) allows you to monitor all
the incoming sources of revenue for your SaaS business
and keep track of the important churn metrics.
You can use this free template to see how fast your
business is growing. The SaaS metrics will all be located
in one comprehensive dashboard and you can visualize all
the data with only one click.
Also, you can compare revenue from upgrades and
downgrades and investigate your churn ratio revenue.
PayPal (Account Overview) Dashboard
The PayPal Account Overview Dashboard
(https://databox.com/dashboard-examples/paypal-
account-overview) is extremely useful for bigger
companies who want to have a clear overview of their
payments, refunds, sales, and other key metrics that your
business relies on.
 Connecting your PayPal account to the template can be
done in a matter of minutes and you will get the answers
to questions such as:
· How can I track gross sales?
· What is the best way to calculate net sales?
· How much did I spend on PayPal fees in the previous
month?
· How can I check my PayPal account balance?
· How much money was returned through refunds last
month?
ttps://databox.com/dashboard-examples/paypal-account-overview)
ayPal Dashboard Example
Improve Financial Reporting with
Databox
Since the financial reports you create will be examined by
both government agencies and potential investors, you
will want to make sure that they are top-notch.
However, the reporting process can sometimes feel a bit
overwhelming and you will face a lot of pressure trying to
create the perfect report.
Databox can help relieve this stress and enhance your
financial reporting skills.
No matter if you create these financial statements
quarterly or annually, you will end up with a handful of
data to analyze. With a business reporting tool such as
Databox, this analysis process will become both simpler
and quicker.
With our customizable dashboards, you can visualize all
the most important data and gather it in one place. Aside
from being visually pleasing, your reports will also be
much more engaging and minimize any chances of error
since the information will be imported directly from your
financial management tools.
To satisfy both your company’s key stakeholders and
potential partners, you can sign up here
(https://databox.com/signup?
utm_source=blog_CTA&utm_campaign=blog-cta) for a
free trial and improve your financial reporting
immediately.
 s Your email SUBSCRIBE

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ttps://databox.com/dashboard-examples/quickbooks-hubspot-crm-financial-performance?utm_source=blog-pos
a&utm_medium=banner-cta&utm_campaign=hubspot_quickbooks_financial_overview_dashboard_databox) YO U M AY A L S O L I K E . . .

(https://databox.com/how-to-schedule-report-salesforce)
ABOUT THE AUTHOR

How to Schedule Reports in Salesforce? (Classic and Lighting)

(https://databox.com/how-to-schedule-report-salesforce)
Among other helpful features, Salesforce offers a way to avoid creating your reports manually.
Filip Stojanovic (author/fstojanovic) Filip Stojanovic is a content writer Learn how to save time with scheduled reports.
who studies Business and Political Sciences. Also, I am a huge tennis
REPORTING | MAY 4
enthusiast. Although my dream is to win a Grand Slam, working as a
content writer is also interesting.

Join 33,345 subscribers to receive latest

posts.
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