How to Write an Annual Report [8 Best Ways]

Are you looking for some of the best ways on how to write an annual report?

If yes, then you are reading at reading the right article.

Annual report is an official financial report prepared by public corporations for its shareholders, analysts and potential investors. The operational and financial condition of an organization is reflected in this report. In the front part, companies use graphics, images, narrative, and much more to make it impressive and easily understandable.

The back part usually consists of the data from the previous year and the plans related to the future of the business. Public companies present the report in a comprehensive form to the Securities and Exchange Commission, while small businesses make a detailed report about the performance to the customers.

Different Sections In An Annual Report

Annual report writing is considered as a vital part of reporting in any business. With such intense competition in the market, this report is a representative of your business in front of your current and potential stakeholders. This report is designed in such a way that maximum information is delivered in a concise manner.

The sections included in the report are as follows:

1. Chairman’s Letter

In the starting of the report, the primary CEO of the organisation i.e., chairman writes a letter which includes the developments, financial summary, challenges faced, different initiatives, growth and success stories. After this, you can expect the section of annual report contents.

2. Business Profile

This section consists of:

Mission and vision.
Details of directors and officers.
Description of products or services.
Competition.
Risk Factors.
Investor Profile.

3. Discussion and Analysis Done By Management

Performance of business in last three years.
Profit margins.
Sale.
Launch of any new product.
Changes in marketing strategy.
New Hiring.
Business Acquisitions.

4. Financial Statements

All the stakeholders including shareholders, employees and investors have major interest in looking at the financial statements. The condition of any business becomes clear by analyzing the financial statements. It chiefly includes balance sheet, income statement, cash flow statement and statement to stakeholders.

How To Write An Annual Report?

Annual report must be prepared in a well-planned manner as it is a way of communicating the financial and operational conditions of the company to internal and external stakeholders.

There are some points to consider while writing an annual report:

1. Set A Timetable

Writing an annual report cannot be underestimated. It has to be written in a proper form. It may take over eight weeks to prepare an annual report. Remember that gathering the information, producing a draft and then reviewing may take time.

You must set the timetable by keeping these points in mind. Sometimes, the process of proofreading, mailing and printing may also take much time. After all these processes, the management may also take time to sign the report.

After you write an annual report, it has to go through a long chain in order to get approved. So, it is always advisable to plan the writing schedule accordingly.

2. Plan What You Want To Write

Writing becomes easy when you have already set an outline in your mind about the content. Firstly, try to understand the needs of your audience. Though the report is majorly for the investors, other people such as customers, NGOs, suppliers may read it too. So, include the information that is helpful for different people.

You need to understand the regulatory requirements for reporting. There are different rules that must be followed while writing the report. It is always a good practice to research well before writing.

Analysing the reports of your competitors can provide a fair idea of what can be incorporated in the report. If you find that some point is missing in a competitor’s report, you can make it your positive point by highlighting it. There is a difference between getting some inspiration and copying someone’s reports. Make sure you use this technique wisely.

3. Focus On Your Key Messages

Different companies may have different goals and messages that they want to deliver to the audience. These messages are communicated to build some trust and connection between the company and stakeholders.

Some example of messages can be:

What is your sustainability strategy?
What is your take in the competition in the industry?
How was the overall performance of the business?
What are the strengths and challenges for the company?

4. Determine A Writing Style

Each organization can choose a different writing style for the annual report that suits its brand and culture. Though it is a financial document, it does not necessarily mean that it has to be written in a formal way only.

Just make sure that you get your writing style approved before you start writing. You can send some samples in order to finalize the writing style. It is also possible that your company already has defined a writing style of reporting.

So, do your research well.

Some points can be considered while writing the report:

Use visual elements such as images, infographics, etc.
Quotes and captions can be emphasized.
Text should be short and understandable.
Headings and subheadings make content better.

5. Decide The Content and Structure of Report

As mentioned earlier, different companies may choose different structures while reporting. Your report must be written in a professional and clear way. There should be transparency in the content. You cannot hide the losses the company faced and just show the accomplishments.

Write content for each page considering your customers, market size, driving forces, scope of international expansion, and the competitors.

6. Get Information From Contributors

You have to include the inputs from various people such as Chairman, CEO, finance director, and HR director. They must be aware of what you are going to write as they are the ones who have to approve the report. You can get valuable information from the contributors through interviews, questionnaires or drafts.

7. Begin Writing

If you have already planned the content, then it might not be a daunting task to start working on it. There are a few annual report writing tricks that can be helpful such as highlighting the main message, using visual elements, using contributor’s inputs, and maintaining consistency for the audience.

After editing the word count becomes less, so there is no harm in writing a bit more than required.

8. Steps To Be Followed Post Writing

Read what you have written.
Send the draft to get the feedback.
Implement the changes received after the review.
Again, seek for some feedback.
Now, send the copy to the contributors for their sign as approval.
If the content is approved, send it to the design agency.

Conclusion

Considering the importance of the annual report, it should be written in a proper and planned way. It needs time and intensive data collection. Any carelessness can cause an impact on the reputation of any business. So, implement the points given in this comprehensive guide and prepare a great annual report!