Why All Companies, Public and Private, Should Write Annual Reports

An annual report isn’t just for shareholders. ¬†Writing an annual report forces you to look deeply into the activities of the past year and see what worked and what didn’t. Those insights are vital to planning your next 12 months.

An annual report also creates a history of your decisions and their outcomes that can be used for future planning and dealing with unexpected problems. Being able to find an answer to a current problem by looking back through your annual reports for that similar situation you remember from eight years ago is a big time-saver and can help you dig into other records that you used to create that annual report.

This article gives you an idea of how to write a good annual report:

Simplified Structure of an Annual Report

An annual report is necessary if your company is a corporation with shareholders or limited liability company with members. Even if you have a sole proprietorship or a one-person corporation, writing an annual report can be a beneficial exercise. If you apply for a loan or hire professional services, you may be asked for a copy of your annual report. A simple document of a few pages in length is adequate.  MORE


First things first – Get Out Your Calendar

I like to buy those school year calendar books with plastic covers – particularly the red ones, but whatever is on sale at Staples after the school year has started. These calendars are great because they usually provide 18 months of calendars and plenty of space for notes. I like to have a physical calendar for the same reason I like hands on my clocks – I can easily see how many quarters of the pie are left. Visual and tactile are good for me. You may find the calendar app on your smartphone a better alternative. I know people who make their own calendars in Excel. Whatever works.

Take your calendar in hand and start making notes. Put in dates when payments are due, subscriptions, licenses and memberships expire. Indicate your fiscal year-end and select a date when you should start working on organizing your quarterly and year-end finances and tax planning.

Next, start working on your marketing efforts. Make notes about good and bad marketing months. Indicate convention dates. Put in deadline dates for monthly publications. Set benchmark dates on which you will either congratulate your team for hitting the benchmark goal, or begin re-thinking your marketing assumptions.

Each business has its own high and low seasons, important dates and annual requirements. Most of the time they sneak up on us.

Every November I tell my clients to start their planning for next year. After a couple of years of frustration trying to get busy business owners to sit down and write out annual operational plans, I started showing them my own method which consists of about a weekend worth of enterprise soul-searching and the following week filling in my calendar as I think of new things I want to add.

This system won’t work for a Fortune 500 company, but it works just dandy for the average small business or startup.