The financial status, income and expense data can change on a daily basis for a company. Financial data is documented and recorded in a budget report, also often referred to as a financial report. While a budget report can be a detailed documentation, the business owner can also choose to make it brief and simple. This decision is often affected by the overall use and readership of the report.
Content and Sections
A company’s budget report will have different sections, depending on the financial needs or data available for the business. However, common sections include the general income and sales information, the fixed and flexible expenses that are necessary for the business to operate to full potential and the net worth of the entire company, including assets and liabilities. Extensive budget reports also include a letter from the company owner about major financial changes in the company and predictions for the future.
Types of Budget Reports
Budget reports or financial reports are written and created based on the needs of the business. A smaller business with an approximate amount of annual sales may only require a single budget report per year. However, a larger business with several hundred sales per day may need a budget report several times a year, also called quarterly reports. Keeping track of the finances and budgets makes it easier to compose the annual report for the business.
Readers and Usage
The business owner and company executives are the common readers of the budget report. They use the information within to create financial plans and projects that suit the limits of the budget in hopes of creating a larger annual profit. Growth and expansion are often the general goal with a budget report. Budget reports are also read by outsiders, such as stockholders and investors. Investors and stockholders are interested in how a business is operating and doing financially before making any large decisions.
Larger budget reports with many pages of numbers and figures are often more effective if they are presented in charts or graphs. Some reports also provide paragraphs of text that explain the numbers and figures and what they mean to the financial status of the business. If the budget report has a future predictions section, additional graphs and charts are provided to show the expected growth and plans of the business.
Budget Report Definition
Budget reports are financial documentation reports that provide informational data in terms of the company's truthful and honest financial standing. The report...