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Financial Reporting Guide: Benefits, Types, And How to Automate Reports

While mandatory for all businesses, financial reporting is not just for tax-compliance purposes. Financial reports support healthy business growth too.

In this article, we’ll cover all the relevant aspects of financial reporting that you need to know about.

We’ll focus on the main types of reports and how they help, the main challenges when it comes to creating accurate and relevant reports, as well as how to start automating them.

If you’re looking to take your financial reporting to the next level, we’ve also included some examples and templates that you can get started with right away.

Let’s start with what financial reporting is and why it’s important.

What is financial reporting?

Financial reporting is the process of collecting, analyzing, and building comprehensive financial statements and reports to track your business income, current assets, and current liabilities.

With the help of financial reports, you can understand the financial position of your business and make informed decisions.

What is the objective of financial reporting?

In a nutshell, the main goal of financial reporting is to inform strategic decisions at the business level, while staying compliant with tax and other financial regulations.

This is done through mandatory quarterly and annual financial statements, as well as other internal automated reports.

Why is financial reporting important?

There’s no way to understand how your business is performing without financial reporting.

Financial reporting done regularly is not only important to stay compliant with regulations but also to be able to anticipate potential issues that have a direct impact on your cash flow.

Financial reports are the backbone of proper financial analysis. Without this, your business is operating blind.

We’ll cover the main benefits of financial reporting in a bit. First, let’s understand the main differences between financial statements and reports.

The main difference between financial statements and financial reports

All financial statements are financial reports, but not every report is a statement. What does this mean in practice?

In short, financial statements are formal reporting documents that sum up data from multiple financial reports. They are used for communicating financial business health to outside entities and reporting to fiscal and tax authorities.

For example, the income statement, the balance sheet, and the cash flow statement are all financial statements required under the US General Accepting Accounting Principles (GAAP).

Compared to financial statements, financial reports are meant for internal use and provide more granular information.

The main purpose of financial reports is to paint a clear picture of your business operating activities and results. They focus on short-term data so you can make informed decisions. For example, you might want to have a sales financial report for your E-commerce store or a detailed expenses and costs report. 

The types of financial statements you need are usually dictated by your industry and legislation, while reports will vary based on the specific needs of each business.

Type of financial reports and statements

Now that we have a better understanding of the main differences between financial statements and reports, let’s look at the main types you should be using.

Income statement

The income statement is your main financial report that tracks all your income and expenses over a specific reporting period.

Similar to how your bank statement tracks all your money in and out of a specific account.

The only difference is that the income statement covers all your income sources and payments in one place. This statement is usually generated from accounting software like QuickBooks.

For public companies, income statements can be viewed online. For example, below is Apple’s latest income statement.

1 apple income financial statement public report


And here is what an income overview can look like on your financial reporting dashboard.

2 income overview financial report

Profit and loss statement

A profit and loss (P&L) statement is a shorter version of the income statement as it’s meant to summarize total income and expenses based on categories. This gives you an overview of your business’s financial health.

The term is often used interchangeably with income statements as they both offer the same information but at a different level of detail.

3 profit loss overview financial report

Balance sheet

The balance sheet is a financial statement issued monthly or quarterly. It’s a report that summarizes all your assets, liabilities, and equity.

This statement gives you a clear view of your liquidity and debt coverage as it includes data on:

  • Available cash, certificates of deposits, or loans.
  • Inventory and fixed assets.
  • Costs of goods, liabilities such as accounts payable, salaries, dividends, tax expenses, etc.
  • Shareholders equity values.

For example, here is what Apple’s balance sheet looks like.

4 apple financial statement report balance sheet


Cash flow statement

A cash flow statement (CFS) is a simple report that shows all the cash movements in your business.

This means an overview of cash in and cash out that paints a good picture of your company’s liquidity.

The statement of cash flows is a good tool for stakeholders to understand current expenses and get a real-time understanding of potential financial issues arising in the near future.

Continuing our Apple example, here’s what their cash flow report looks like.

5 apple cash flow financial report statement

Statement of retained earnings

The statement of retained earnings is a financial report that tracks how much income a company has generated and kept in the company since it was incorporated.

This report can provide valuable insights into the impact of shareholder decisions and the overall profitability of investing activities and other business growth strategies.

6 statement of retained earning example


Internal financial reporting dashboard

While the statements we covered so far have standard formats, an internal financial reporting dashboard is a flexible and personalized report.

It’s meant to give you a quick overview of your company’s profit and other financial data.

An internal financial dashboard is a live summary of important data typically used by specific roles in a company.

For example, a CFO dashboard might include data on the company’s net growth and churn, accounts receivable and accounts payable, and more detailed data on your best-selling product or top customers.

Here’s an example of how that might look in Looker Studio, a data visualization tool.

7 revenue overview finanicial report dashboard looker studio coupler

It is a revenue dashboard template connected to QuickBooks by, a data automation and analytics platform. You can easily connect your QuickBooks account where all your financial information is initially collected and load data from it to a real-time updating dashboard. We’ll cover how you can build and automate data refreshes in such a dashboard in a bit.

To learn more about this topic, see our article on building a revenue reporting dashboard.

Best financial reporting examples

Let’s now look at some examples of what you should be aiming for. Instead of trying to build the ultimate dashboard with everything in it, go a bit more granular.

Role-based and purpose-driven dashboards are the best way to look at your data and extract meaningful insights.

Here are a few examples.

CFO financial reporting dashboard

A CFO for example will need different data than the Head of Sales. While both might need sales-related financial data, a CFO dashboard should focus on profitability analysis too.

Here’s what such a dashboard could look like. You can use this Revenue Overview template that uses QuickBooks data and connect your own data to it.

Having an income overview graph makes it easier to glance at the numbers vs reading the full income statement. The same goes for PL analysis. A simple dashboard that collects all of the relevant financial data inside one report makes it easier for CFO’s to spot issues.

SaaS sales dashboard

A SaaS sales dashboard helps you understand your overall sales. It should also focus on what’s driving financial success or blocking it.

Here’s an example of a Sales KPI dashboard built in LookerStudio using PipeDrive data.

For example, look at metrics like Revenue per deal and your Won/Loss ratio over a specific period of time. These insights will help you streamline your sales process by spotting declining patterns before they impact your bottom line.

E-commerce financial reporting dashboard

Another example of a financial report is this dashboard focusing on E-commerce store data.

It also covers sales data but it’s looking at it from a financial point of view that’s relevant for managing your online store.

An E-commerce financial dashboard can be used by marketing teams to understand overall store performance. It can help you quickly understand how profitable your online store is and how the business is growing.

It should include data on the percentage of sales by source, average order value, or total discounts.

Here’s an example of an E-commerce dashboard using Shopify data that you can use as a template.

How to improve business decisions with financial reporting automation

Automating your financial reports is not about generating standard reports monthly using your accounting software.

That wouldn’t give you the insights you need in real-time. Emphasis on real-time.

Proper financial reporting automation involves using tools to collect, organize, and visualize data in a way that can be used in comprehensive reports and dashboards.

You can easily do this with no-code, user-friendly solutions like that don’t require you to have technical knowledge. is a data automation and analytics platform to turn complex data into meaningful reports. It allows you to automate data flows from over 50 data sources, including QuickBooks, Stripe, Xero, Yahoo Finance, Excel, and others. For example, you can easily export data from QuickBooks to Google Sheets or BigQuery while also blending in additional data from Stripe or Shopify.

To visualize your data, you can either connect your source to a data visualization tool (Looker Studio, Power BI) and create a report from scratch. Or you can use one of the premade templates like the ones we introduced above.

The end result?

Automated real-time financial reports that make financial management a breeze.

If you’re not sure how to get started and what your reports and dashboards should look like, take a look at this showcase automations with our dashboard templates.

The main benefits of financial reporting done right

We’ve already established that financial reporting is mandatory for compliance and transparency. It also gives you the necessary insights for making smart business decisions and improving your bottom line.

That’s not all. More important than creating financial reports, is doing them right.

We’ll skip the part where done right means complying with generally accepted accounting principles. You already know this. Following GAAP helps you avoid fines but it also gives you some extra benefits:

  • Better cashflow optimization: Accurate reports help you monitor cash movements and spot trends that can hurt your company in the short term.
  • Increased profitability through financial transparency: Having your financial reports in order is crucial for long-term decision-making and forecasts. Are your expenses increasing at a faster rate than your income? Does the majority of your income come from less than 10% of your customers? These might affect your net income or make your business more prone to risk. You need a clear understanding of your net worth, financial position, and risks to increase profitability.
  • Informed business decision: Instead of simply complying with regulations and generating annual statements, you should take the next step and focus on automating and diversifying your financial reports. An annual report gives you a general overview of what went well and what didn’t. Recurring monthly reports that are automated to show data in real-time will give you an edge over your competition. You can then make informed decisions and avoid big losses before they make an impact on your bottom line.

Top financial reporting challenges that make financial data hard to understand

We’ll keep this brief. If you’re reading this, you’re probably already struggling to get your reports right. You’re not alone.

If you’re facing any of the financial challenges below, you’re in the right place, as we’ll cover a simple solution in the next section.

First, top financial reporting challenges include:

  • Data silos: Your data is stored in multiple locations, so it’s hard to get accurate and comprehensive reports that require blended data.
  • Inaccurate reports: Manual data reporting is not only time-consuming but also prone to errors.
  • Data visualization: If your financial reports are spread across multiple Excel spreadsheets, no amount of graphs and charts will give you a complete picture. It’s easy to download data to CSV files and do data visualization inside sheets, but it can get confusing really quickly when you have to track different metrics in multiple places.
  • Real-time reports: Not having real-time data is like making decisions based on what happened last year and hoping for the best. Understanding your company’s financial performance in real-time is a struggle many face.

What can you do about all this? Short answer: data reporting automation.

In the next section, we’ll cover how you can automate your financial reports and overcome the main financial challenges we’ve outlined above.

Financial reporting requirements according to international financial reporting standards

The main challenge when it comes to financial reporting is compliance. Here are the main financial reporting regulations you should be aware of to keep your financial accounting books in order.

  • General Accepting Accounting Principles (GAAP): While not mandatory for small businesses, following GAAP is recommended for having accurate and consistent financial reports. GAAP was established and improved by The Financial Accounting Standard Board (FASB).
  • International Financial Reporting Standards (IFRS): If you are operating internationally, you must comply with IFRS which covers global accounting standards used in different countries.
  • US Securities and Exchange Commission: The SEC is an independent US federal government agency responsible for regulating security markets and protecting investors and stockholders of public companies.
  • Tax requirements: Small businesses must adhere to tax regulations at federal, state, and local levels. These will vary and include filing tax returns and keeping specific records.
  • Industry-specific financial regulations: Companies that operate in banking or healthcare, for example, have industry-specific regulations they must follow.

To understand all the nuances of the regulations your business should comply with, consult a certified accountant or a tax professional.

What is included in financial reporting for tracking financial health?

In general, financial reporting should cover information on your company’s assets, depreciation, liabilities, revenue, and expenses.

If you have a for-profit business, there are four types of financial statements required by external stakeholders:

  • The balance sheet
  • Income statement
  • Cash flow statement
  • Statement of retained earnings

The value and purpose of financial reporting for your business

By now, you should be more familiar with the different types of financial reports you should be analyzing and how each can help.

Staying tax-compliant is important. We hope that now you have a better understanding of how an extended range of financial reports and reporting dashboards can help too. You can make proactive business decisions and have a positive impact on your bottom line.

Are you ready to take your financial reporting to the next level? You can easily get started with one of’s free templates.

  • Julia Ryzhkova

    Product Manager at Railsware. I consider myself a 4 P's manager, focusing on Product, Process, Project, and People. In any of those fields, the main driver for me is the ability to make people's lives easier. That's also why I like to share my experience via blog. I have worked in consultancy, R&D, support, marketing, and PMO, which helps me look at any question from diverse points of view. Besides work, I really enjoy traveling and playing board games🎲

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