What are the requirements, and Main Element of a Good Annual Report?
An annual report is written and prepared by putting in Labour by executives. The effectiveness and usefulness of the annual report will depend upon its quality and the way in which it has been presented and communicated. A report should be prepared in such a way that it serves the purpose and is presented at a time when it is needed. Good reporting is thus essential for effective communication. A report is one of the essential elements for all management functions. It is highly required in coordination, control, organisation, decision making and in all future courses of action.
The following are essential requirements and Main Element of Good Annual Reporting. They are :
1.Good form,
2.Contents,
3.Simplicity,
4.Promptness,
5.Relevancy,
6.Consistency,
7.Accuracy,
8.Factual,
9.Controllability,
10.Cost consideration.
11.Comparability,
12.Frequency of Reports,
13.Decorative,
14.Clarity and Analysis,
15.Brevity,
16.Planned and Organised,
17.Properly addressed,
18.Duly signed and Dated,
1.Good form :
An ideal form should have a proper title, head king sub-heading and paragraph division. The title of the report itself will explain the purpose for which the report has been prepared. The title also enables me to point out the persons who need the report. A sales report may have a title as “Sales Report for the month of January 2003”. This title explains the purpose and period of preparing the report.
2.Contents :
The following points must be kept in mind while preparing a report.
âž¼If statistical figures are to be given in the report then only significant figures and totals should be made a part of it and other detailed figures should be given in the appendix.
âž¼The reports should contain facts only and not opinions. The opinion if essential may come as a segnet to certain facts and not otherwise.
âž¼The report must contain the date of its preparation and date of submission.
âž¼If the report is prepared in response to a request or letter then it should bear reference number of such letter or request.
âž¼The contents of a report must serve the purpose for which it has been prepared. Separate reports are prepared for different subjects. Various aspects of the subject should be properly conveyed.
âž¼The contents of the report should be in a logical sequence.
âž¼The contents of the report should be relevant. Irrelevant information should not be included.
3.Simplicity :
The Report should be presented in a simple, unambiguous and in a clear language. The language used in the report should be non-technical. If the report is loaded with technical terminology, it will reduce its utility because the reader may be unfamiliar with that language. If technical terminology is the essential requirement of the subject covered, some explanation of technical terms must be given to make the report understandable. The user of the reports should be able to understand the report without any difficulty. The report should also be readable. The figures should be rounded off so as to make them easily understandable. If possible charts, diagrams or graphs should be used for presenting information.
4. Promptness:
Promptness in submitting a report is an essential requisite of a good report. The reports should be sent at the earliest. Reports prepared by various responsibility centres within the organisation are required for studying the progress and performance of responsibility centres. A considerable delay in the occurrence of an event and reporting of the same will defeat the objective and purpose of reporting. Information delayed is information denied. The quick supply of reports will enable the management to take corrective actions in time.
The reports are to be based on information, the promptness in reporting will depend on quick collection of facts and figures. Following steps may help in quick reporting :
i.A proper record keeping system should be introduced in the organisation to meet various information needs.
ii.To avoid clerical errors mechanised accounting should be used.
iii.The accounting collecting work information should be centralised to avoid bottlenecks.
5.Relevance :
Reports should be only submitted to various persons to relevant divisions and authorities. need in routine them. way, Sometimes Reports then it will reports should involve arabe
unnecessary expenditure and wastage of time. Reports Will not remain secret also. The persons or departments to whom the report is to be sent should be clear to the sender of the report, people do not give much attention to reports coming in a routine way. So, this type of practice involves unavoidable expenditure and reduces the importance of p reports.
6.Consistency :
There should be consistency in the preparation of reports. For consistency, the reports should be prepared from the same type of information and statistical data. This will be possible if the same accounting principles and concepts are used for collecting, classifying, tabulation and presentation of information. Consistency in reporting enhances their utility.
7.Accuracy :
The reports should be reasonably accurate. Statistics may sometimes be approximated to make them easily understandable. The production of figures accurate up to pause may be difficult to remember. Their reasonable approximation may make them readable and understandable. The degree of accuracy depends upon the nature of information and purpose of its collection. The approximation should not be done upto the level where information loses its form and utility. So accuracy should be used to enhance the use of reports.
8.Factual :
The reports should be prepared on the basis of factual information. Any predictions should be avoided in reports unless and until it becomes a necessity.
Fictional items should not form the content on any report.
9.Controllability:
The reports should be addressed to appropriate persons in respective responsibility centres. The report should give detail of taking variance responsibility variances corrective which centre measures are related may not also be controllable that at be appropriately mentioned centre. This at a separate level. will particularly help Theinen the report.
10.Cost Consideration :
The cost benefit analysis should be done in respect to the preparation of the reports. not be the of more preparing than the and advantages presenting desired the report from should such reports.may be used The Cost should be reasonable so that reporting reporting analysis will system.by help all in types deciding of concerns. about the The adoption cost benefit of
11.Comparability :
The reporting system is meant to help the management operate efficiently by taking correct decisions.
This objective will better be achieved if reports give comparative information.The comparative information can be in relation to previous periods, current standards or budget. This information helps in finding deviations or variances Where performance is below standards or expectations.
Such variances can be highlighted in the reports.The management by exception is possible when exceptional information will be supplied to the management. The comparative reporting will at once, help the user to reach conclusions about the performance of the responsibility centres mentioned in the report.
12. Frequency of Reports :
Along with promptness, the frequency of reporting is also significant. The reports should be sent regularly when they are required. The timing of reporting will depend upon the nature of information and its purpose. Some reports may be sent daily, some weekly, some monthly and so on. Frequency of reports means that these should be sent when required. The reports are prepared at appropriate times and sent to appropriate persons as per their requirements.
13. Decorative :
Reports particularly prepared for general public or external users should be decorative. Various attractive pictures on the front page of the report can be presented. Pictorial information usually has more attraction to the user than descriptive information. Any report fully loaded with statistics data presented with colourful diagrams and beautiful pictures on its title page will leave an everlasting impression on external users.
14.Clarity and Analysis :
A good report must be clear and analytical with the purpose of its use. Lack of clear information and analysis will not be able to serve the basic purpose and object of reporting.
15.Brevity :
A brief report is always desirable on account of various reasons as under :
âž¼Lengthy reports are very costly.
âž¼Lengthy reports are time consuming.
âž¼Long reports reflect inefficiency.
âž¼Long reports usually ignore the main issue.
16. Planned and organised :
A planned and organised report is always regarded as a good report. A planned report will include the following points.
âž¼The object or report, methodology used for collecting data.
âž¼Summary of conclusions.
âž¼Problems and solutions.
âž¼Recommendations.
âž¼Annexures.
17. Properly addressed :
A report must be addressed to the Board of Directors, to the users Managing the report, Director for instance, etc. Manager,any responsibility. department
18.Duly signed and dated:
Report prepared by any department must be be properly dated and signed by responsible,Head of the department. Undated Report may not be able to fix the historicity of the report on some future date.