What Are the Functions of an Annual Report?

by Jill Richards; Updated September 26, 2017
What Are the Functions of an Annual Report?

An annual report is an excellent way to inform the public about your organization. Not just a place for dry financial reports, you can use the publication to tell a compelling story about the successes you've experienced over the past year. Don't forget to let pictures make the narrative inviting to read. Many organizations are required by law to publish an annual report containing financial data, so using it as a marketing tool is an additional benefit.

Message

Writing an annual report requires careful planning beforehand. The first step is to determine what you would like to say or your message. Consider your audience and understand to whom you are writing. Picking a theme may help you sharpen and polish the message. Each part of your annual report should reflect this message.

Financial Data

Nonprofit organizations that have revenue of more than $25,000 are required to file an annual report, called Form 990, with the IRS, according to Entrepreneur.com. Many states also require businesses to file annual reports. As a result, one of the main functions of an annual report is to communicate the company's financial status. The data is generally a simple statement of both income and expenses that, in many cases, is prepared by the organization's auditors. Transparency is the key goal when you communicate financial data.

Donors

In the case of nonprofit organizations, the annual report is an excellent place to recognize and thank all who have donated over the previous year. Many organizations categorize donors by the amount of funds they've given, and large donors often get special recognition. In fact, donors routinely receive copies of the annual report so that they understand the overall status of the organization to which they've given money. Corporate annual reports do not list donors but may contain shareholder information.

Accomplishments

An annual report is an excellent place to list the past year's accomplishments. Don't be afraid to point out what's gone right this year so that your audience clearly understands the organization's achievements. An annual report should be a key marketing publication that shines the most flattering light on your institution.

Other Components

Many annual reports also contain a letter from the chief executive officer, a letter from your CPA or auditor explaining your financial standing, and a list of board members. Often, a message from the board chairman is included. The Annual Report Library organization recommends that the financial data section also include a balance sheet detailing all net assets.

About the Author

Jill Richards has almost 20 years of writing, public relations and marketing experience. She primarily writes about non-profits, health, business, education and fund-raising strategies. Richards holds a Bachelor of Arts degree from the University of Wisconsin.

Photo Credits

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