What Is an Annual Report?

You simply have to know what’s going on in your company if you want it to achieve success! After all, you need to be well-informed so you can make the right decisions that result in grow and development. Your partners, stakeholders, and investors also need to stay informed so they can rest easy, knowing they made the correct choice.

One of the best ways to stay informed and keep others in the loop is through the annual report. This document, published every year, gives a full overview of how the company is doing. It is key for partners, sponsors, employees, and government agencies to learn basic facts about your business.

In our article, we explain what an annual report is, what to include in it, how to use flipbooks to present it, and what mistakes to avoid.

 

What is an annual report?

An annual report is a detailed summary of what a company has achieved in the past year, how well it has performed financially, and its plans for the future. It is published once a year to keep shareholders, investors, and other stakeholders informed.

For public companies, annual reports are often required by regulators, such as the Securities and Exchange Commission (SEC) in the U.S. These reports must be published on the relevant agency’s website to ensure transparency.

 

What should be included in annual report?

An annual report should be both informative and engaging. It is often classified as “grey literature” – that is, certain elements of the report are essential, especially for public companies. Below is the list of key elements that should be included:

• A message from the board – A letter from the CEO or leadership team that highlights the company’s successes, challenges, and future prospects.
• Company overview – A brief description of the company’s mission, vision, values and key objectives.
• Principles and policies – A summary of the main policies, such as environmental, social, and corporate governance (ESG) procedures, as well as internal rules and regulations.
• Financial statements – Legally required documents, like the balance sheet, income statement, and cash flow statement.
• Summary of the year – Description of key projects, products launched, significant investments, and major developments.
• Company structure – Information on management, key personnel, and any organizational changes.
• Market analysis – Insights into industry trends, competitive positioning, and future growth opportunities based on financial data.
• Expert opinions – Reports or audits from independent experts, external auditors, or regulatory agencies.

 

Who uses annual reports?

Annual reports aren’t just for big corporations or government filings. Even small businesses can benefit from creating them. They serve as a valuable source of information for key people connected to your company, including:

• Investors and shareholders – They gain a clear picture of your company’s financial health and growth.
• Employees – They learn about the business’ performance and their role in its future.
• Customers and partners – They can evaluate your company’s reliability and stability.
• Government and industry groups – These reports help businesses meet regulatory requirements (depending on the region, such as the U.S. or EU) and provide transparency.
• Analysts and media – The data contained in the annual reports can be used by industry experts and journalists for analysis and reporting.

 

How do companies create an annual report?

Companies can either hire a third party to assemble their annual report or handle it in-house, relying on their analysis, accounting, or marketing teams. Either way, creating the report involves several key steps:

1. Gathering data

Collect as much information as possible about the past year’s changes, including financial, operational, and performance data.

2. Preparing content

Draft the CEO’s letter, gather expert opinions, and write the main body of the report.

3. Designing visuals

Find or create illustrations, photos, and infographics, and format them professionally.

4. Meeting legal requirements

Ensure your report complies with all applicable regulations. In the US, you can find these requirements on EDGAR, and in Canada on SEDAR.

5. Preparing the final report

Make a PDF version of your report, and consider making it even more accessible by publishing it as a digital flipbook with a platform like Publuu.

 

Why use Publuu to publish your annual report?

MAKE YOUR OWN

👉 Better look and feel. Flipbooks are simply more engaging than plain PDFs. The page-turning effect makes them more visually appealing, and encourages readers to explore the content. You can also add interactive elements like animations, hotspots, or links to make data easier to understand.

👉 Easy sharing. Unlike simplified reports on sites like EDGAR, flipbooks are very easy to read and even simpler to share via links, embeds, or QR codes. Shareholders can view them on any device without downloading anything.

👉 Professional branding. You can customize your reports with your logo, background, and even music to reinforce your company’s brand and create a polished, professional impression.

 

Benefits of annual report

Submitting your annual report to the required government and tax agencies is essential to avoid penalties. Apart from that legal obligation, creating and sharing this report offers a number of benefits:

• Building trust. Transparent data sharing builds trust among stakeholders, which is particularly valuable when creating investor pitch decks (learn more in our Knowledge Base).
• Demonstrating accountability. The report showcases your company’s commitment to shareholders and its performance during the year.
• Effective marketing. A well-designed report highlights your strengths, accomplishments, and future vision.
• Strategic planning. Analyzing your progress helps you understand your company’s trajectory and informs future growth strategies.

 

Other names for annual report

Depending on the context, annual reports may also be referred to as:

• Financial report
• Yearly report
• Statement of information
• Corporate report
• Biennial statement
• Annual certificate
• 10-K report (for publicly traded companies in the U.S.)

Depending on the state or country, the reports might be prepared every two years or they might only contain a financial statement. Research your local requirements when becoming a publicly traded company or equivalent.

 

Common mistakes when filing an annual report

Make sure to submit your report on time and upload it to all the necessary online platforms. Probably the most common mistake is forgetting the required paperwork, so double-check with the relevant government agency.

Here are some other pitfalls to avoid:

1. Missing deadlines

Late reports can lead to penalties and fines or losing your reputation among shareholders. Don’t wait until the last minute!

2. Inaccurate data

Falsifying data is a serious issue. Remember, the report is not just a formality; it’s also used for strategic planning.

3. Poor design

A poorly designed report can discourage readers. Use a professional template and consider creating an easy-to-read digital flipbook with a platform like Publuu.

4. Information overload

Many shareholders appreciate a concise executive summary. Avoid excessive jargon and keep the language clear and accessible.

 

Other questions

What is the purpose of filing an annual report?

The annual report’s main task is to show everyone connected to the company – like stakeholders, investors, government agencies, and employees—what the organization did during the year. It gives them trustworthy information in a clear and easy-to-understand way.

 

What happens if you don’t file an annual report?

Failing to file your annual report on time can have serious consequences. In the US, for example, you could face hefty fines, starting with amounts like $10,000. If you miss a second deadline, the state can take even stronger action, potentially revoking your business license, preventing you from operating in other states, or even shutting down your company entirely. LLCs could even lose their liability protection.

Beyond the legal penalties, late reports can also damage your reputation with investors and partners, both in the US and internationally. This reputation harm, along with any business disruptions caused by the penalties, can be incredibly costly. Legal fees to mitigate the dissolving of business alone can easily reach tens or even hundreds of thousands of dollars.

 

Conclusion

Annual reports provide a full picture of how the company is performing, what are its finances like, and its plans for the future. They need to be accurate, well designed and filed on time to avoid penalties and satisfy stakeholders.

If you want to make your annual report more interesting and easier to read, you can turn it into a digital flipbook using Publuu. This will make it easier to share and help your company look far more professional. Don’t wait for the last minute – start preparing your annual report today to make sure you meet all the requirements and show people your organization at its best!

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