An annual report is a lot like an old friend. They are both expected, yet appreciated when they show up. And the best ones don’t come around every year. Annual reports have been going strong for centuries, starting with what historians think was a letter from Sparta’s king written on animal skin back in 500 B.C., but some would argue that the first modern annual report dates to 1539 and a shareholder letter from a Bavarian mining company called Osterreichische Kupfer-Eisengiesserey Werke AG [Austrian Copper & Ironworks].
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The annual report has gone through many changes over the years, but one thing is certain: they are a unique opportunity to communicate with a variety of audiences about the company’s performance and direction.
So, how do you make one? Start off by following these 10 tips to help improve an annual report’s readability and appeal:
1. Less text, more visuals on your target annual report
The idea that “a picture is worth a thousand words” holds especially true with pictorial representations of data. When it comes to annual reports, graphs, charts, and infographics can do everything from telling a company’s story to illustrating key performance indicators (KPIs).
These visual cues are far less time-consuming for readers than wading through number after number; they also make it easier for your business audience–especially those who may be evaluating your annual report in the context of other similar reports–to scan and understand all your key performance indicators.
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2. The annual report of a company needs good storytelling
Stories are still around for a reason, and they can be one of the most effective ways to communicate both facts and figures (the numbers behind the stories) as well as intangible things like corporate culture, employee engagement, or a company’s vision.
In short: narratives help readers connect with a company more personally than just about any other method of communication.
3. Your audience is reading…and making decisions
For some businesses, shareholders have been their primary audience for annual reports, but times have changed and so have standards for reporting results to investors. Whether you’re gathering feedback from existing investors or simply want to attract new ones, it’s worth bearing in mind that investors today might be weighing the performance of your business in much broader terms than before.
Have you achieved certain growth targets? How does your stock compare against other stocks in the same industry? What is your track record with acquisitions and divestitures or entering/leaving certain markets?
The more clearly you communicate annual report information to a variety of potential readers, the better equipped they’ll be to make smart decisions about what steps (if any) to take next–and that leaves everyone better off.
4. Know thy audience … and their dates
Each year, we’re reminded that there are different deadlines for filing an annual report with various governmental agencies depending on a company is incorporated and how many shareholders own its stock (the exact dates vary by state). Some companies also opt to file an annual report with the SEC instead of, or in addition to, their annual report with each state’s Secretary of State.
5. Dates do matter (especially with company financial statements)
As we’ve already established, there are rules about your company’s “annual” reporting frequency and how it needs to be framed within a calendar year. So how should you handle that date on the cover? It depends on your audience! For instance, if you’re targeting investors who buy and sell shares based on quarterly performance data, then using a cover date that falls within your latest reporting quarter may be most appropriate.
However, if you’re reaching out to long-term investors whose buying and selling decisions are based more on big picture items like company culture or product launches, then they might prefer a cover date closer to the beginning of the new year.
6. The main mode of communication of your target annual report is not one size fits all
You’ve probably seen plenty of annual reports in your life–whether or not you realize it! Annual reports are frequently published on glossy stock with slick graphics and beautiful photography. Is this what you want for your own business? Well, think about how much weight an annual report carries when it lands in the hands of readers (and their boards of directors, management teams, or investment committees).
If it’s carrying a lot of weight, then chances are you’ll want to make sure your annual report looks more like an art gallery brochure–pretty enough to be displayed on a coffee table or bookshelf. And if annual reports don’t carry quite the same heft? Then keep in mind that you can mail standard 8.5″ x 11″ versions of your business’ annual report without worrying too much about how it will look in someone’s hands.
In the end, what really makes a great annual report is setting an appropriate tone and targeting it toward your audience. And remember: if you’re working with a creative agency to make your company’s annual report, you’ll probably want to establish that tone before any work begins or at least give them a summary of how you think annual reports for your industry tend to be framed.
Just because previous years’ annual reports may not have been particularly memorable doesn’t mean yours can’t be!