How to Create an Annual Report

by James Bolger; Updated September 26, 2017
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Do you need to create an annual report for your organization? Not sure how to proceed? Fortunately, you can break the process for creating an annual report into small, easy-to-follow steps. Best of all, managing the annual report will bring you into contact with your organization's key decision makers. You can serve in an important, high-profile role that boosts your career and proves your value to the organization. Follow these guidelines for help in creating an annual report.

Step 1

Start with the numbers. Almost all annual reports center around financial data, even in nonprofit organizations. Meet with your organization's finance advisers and/or accountants to review the past year's financial performance, and determine what information to include in this year's report. The financial status of your organization will help guide your choice of theme and appearance for the annual report.

Step 2

Note that the exact content of the financial report will vary based on organization size, business model and for-profit/nonprofit status. Check with finance and legal advisers to confirm which of the following elements to include: Income Statement---the basic statement of the organization's financial stability. It details sources of money, expenses, and net income or loss for the year. Balance Sheet---provides an overall view of the organization's financial status. It lists both the assets and liabilities (amounts owed) of the organization. In for-profit organizations, the balance sheet will include a statement of shareholders' equity. This essentially puts a number on shareholders' value by subtracting liabilities from assets. Cash Flow Statement---reports on how cash moves through the organization and how much cash is on hand. Risks---a summary of business risks the organization faces or may have to face in the future. Notes---include explanations of the organization's accounting practices, explains any exceptions to general accounting practice and describes how the financial information was gathered. Publicly traded companies must include a report from senior leadership confirming that internal accounting controls meet the requirements of the Sarbanes-Oxley Act.

Step 3

Make a budget. Use the costs from the previous year's report, if available, as a starting point. Next, consider your current needs. Ask, will you require professional photography? Writing assistance? Do you want to print and mail the report and/or post it to a website? What technical help will you need? How much will printing and postage cost?

Step 4

Choose a tone and theme for the annual report's content and design. Did the organization do well? Then plan for an upbeat tone and a bright, colorful design. If the organization faced challenges or has weathered a storm, a low-key tone and black-and-white design make more sense.

Step 5

Plan your content. Review the year's activities. Read through recent newsletters, press releases and news coverage. What were the key achievements and milestones? Who were the high performers and difference makers? Use your answers to draft a content plan for the annual report.

Step 6

Start at the top. Begin the annual report with a letter or column from an organizational leader (chairman of the board, president or executive director). The executive's message should provide an overview of the year's activities and accomplishments. It should also summarize the financial performance in terms a general reader can understand.

Step 7

Give credit. Include recognition for leadership and key staff members in for-profit organizations, or donors and volunteers in nonprofits.

Step 8

Review your plan with leadership. Be sure to get buy-in on budget, tone and appearance. In particular, make sure the presentation of financial information meets with executive approval. Remember that leadership will probably want to sign off on the final content and design before publication and distribution.

Step 9

Produce the report. If your organization lacks writers, photographers and designers, you may need to do the work yourself or find volunteers. Marketing communication firms and professional freelancers are also sources of help. If you are planning to print and mail the report, get quotes from several printers and mailing houses. These may be able to help with design of the annual report as well.

About the Author

James Bolger has spent two decades writing on health, nutrition, golf, fitness, travel, insurance, and more. Bolger served as managing editor for "Maturity Matters," a newsletter on senior lifestyles, and "Your Health and Fitness," a consumer health magazine. He has also written on health and medical research for academic medical centers. Bolger earned his Bachelor of Arts in communications/English from DePaul University.