Critical to the success of any small to mid-sized business is financial stability. As a business owner, you should be able to discern which indicators determine financial stability and which indicators warn of financial challenges ahead. All of this information can be gathered from regular reviews of your financial and operational reports. Both contain key data and information that business owners need to know, but these reports serve different purposes.
Financial reports track how much money your business is making and how you are spending that money, as of a specific period in time. As a business owner, you obviously want to know this information. However, there are additional stakeholders or potential stakeholders that may need to know this information as well, such as investors or creditors. Examples of various financial reports are a balance sheet (which summarizes a company’s assets and liabilities), an income statement (which indicates how much profit a company generates), and a cash flow statement (which shows a company’s sources and uses of cash). Financial reports show historical data, but they provide insight into how a business spends its profits, whether they are reinvested into the business, and whether the company can sustain future growth.
Operational reports provide business intelligence on how efficiently a company performs. These reports allow companies to evaluate its current and future financial situation. With the correct systems and tools in place, operational data can be tracked real-time so that businesses are able to react and adjust their practices effectively. Business owners should review operational reports daily. These reports can vary by industry. Restaurants may need to track average time per table/meal, whereas hotels may need to track occupancy rates. Actions taken by business owners resulting from this garnered business intelligence can have an immediate, dramatic impact on productivity and ultimately profitability.
As a small or mid-sized business owner, keeping tabs on both your financial and operational reports will help you run your business more effectively. We are currently offering a free analysis of your business processes and accounting system, which could help you to better prepare and understand your financial and operational reports. If you would like to learn more on how Analytix Solutions can help move your business forward, please call me directly at 781.503.9002 or email me at sales@analytix.com.
Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.
Written by
Analytix Editorial Team
FAQs
Financial reports show historical data, but they provide insight into how a business spends its profits, whether they are reinvested into the business, and whether the company can sustain future growth. Operational reports provide business intelligence on how efficiently a company performs.
What is the difference between reporting and financial reporting? ›
Financial reporting is the process of tracking, analysing and reporting your company's financials. Reporting focuses on surveying the information you've gained through accounting processes. This analysis enables your business to assess your financial position, evaluate past performance and forecast future performance.
What is the difference between management reports and financial reports? ›
Financial reporting focuses on a company's overall financial performance. Management reporting looks at specific areas of the business in both operational and financial terms. Past or future? Financial reporting looks at how your company has performed financially in the past weeks, months and years.
What is operational and financial data? ›
Financial and Operating Data means certain financial information and operating data of the Issuer of the type customarily prepared by the Issuer and is publicly available, which consists solely of the Issuer's audited financial statements.
What is in an operational report? ›
Operational reporting is a reporting procedure that details the ins and outs of a company's day-to-day deliverables, often concerning production. Typically, operational reports are short-term and use hourly, daily, weekly and monthly information.
What are the three types of financial reports? ›
The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.
What is considered a financial report? ›
Financial reporting — the communication of financial information to external and internal stakeholders — is most often achieved by the "core" financial statements: balance sheet, income statement and statement of cash flows. But it can also come in many other forms, depending on the information needs of the reader.
What are the types of financial reports? ›
3. 5 Types of Financial Statements
- 3.1. Balance Sheet. The first type of financial report is the balance sheet. ...
- 3.2. Income Statement. The second type of financial report is the income statement. ...
- 3.3. Cash Flow Statement. ...
- 3.4. Statement of Changes in Capital. ...
- 3.5. Notes to Financial Statements.
The three major financial statement reports are the balance sheet, income statement, and statement of cash flows.
What are the four basic financial reports? ›
For-profit businesses use four primary types of financial statement: the balance sheet, the income statement, the statement of cash flow, and the statement of retained earnings. Read on to explore each one and the information it conveys.
Businesses use operational reports to track performance, make informed decisions and improve operational processes. The four main types of operations reports include real-time, periodic, historical trends predictive analytics and adhoc reports.
What is the purpose of operational reports? ›
Operational reports provide a precisely formatted, ready-to-analyze view of an organization's operational activities such as sales performance, manufacturing productivity, or patient care efficacy.
What is financial and operational management? ›
Financial operations management refers to the process of overseeing the various functions of a business's financial activities. All businesses engage in financial activity, which is based on the concept of transactions.
What are examples of operational data? ›
Examples of operations data include: Automated spot traffic data (e.g., loop, acoustic, radar traffic detectors) including volume, speed, occupancy and other data. Travel time data (probe data) Incident logs.
What is considered operational data? ›
Operational data refers to data that is generated by business operations, such as sales, inventory, and customer interactions. This data is typically used to monitor and manage day-to-day operations, make decisions about resource allocation, and improve business processes.
What does the operational data include? ›
The operational data model includes some information that is needed for operational processing only, such as a specific telephone number. The data warehouse data model does not contain data that are specific to operational processing. The data warehouse data model does not contain any summarized data.
What is financial and reporting? ›
Financial reporting is one of the most critical business processes that accounting, finance, and the business must understand and appreciate. Financial reporting is the comprehensive review of monthly, quarterly, or yearly financial data to drive better business performance and results.
What is reporting in financial reporting? ›
Financial reporting is the process of documenting and communicating financial activities and performance over specific time periods, typically on a quarterly or yearly basis. Companies use financial reports to organize accounting data and report on current financial status.
What reports are included in financial reporting? ›
The three main types of financial statements are the balance sheet, the income statement, and the cash flow statement. These three statements together show the assets and liabilities of a business, its revenues, and costs, as well as its cash flows from operating, investing, and financing activities.
What is financial reporting examples? ›
Financial reporting includes: External financial statements (e.g., income statement, statement of comprehensive income, balance sheet, statement of cash flows, and statement of stockholders' equity) Notes to the financial statements.
