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Why are reports important?

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If you are a sole proprietor, you may not believe you need to keep reports or develop them on a regular basis, since no one else is involved in running your business. Even if you have partners or a board, reports may not be high on your priority list when you have so many other details you need to take care of to keep the business running smoothly, but business reports can actually save you time and money, and play a dramatic role in the future of your company.

Data Collection

Business reports document your progress and provide you with a means of comparing periods of time, project details, and your history of growth. While you may rely on a superior memory or the amount of profits you make each year to gauge your progress, the data you collect in reports can serve a number of important purposes. It can help you formulate your budget and marketing plans for the upcoming year. It also can allow you to realize which products or services are the most successful, and which markets you may have overlooked. You’ll find more reasons to consult the data you’ve collected as your business grows.

Paper Trail

In addition to helping you make decisions about your company and its future, reports help you build a paper trail of your past. You can keep the reports on a computer; you don’t have to collect mounds of actual paper. Reports that document sales, meetings, plans, initiatives and annual budgets are an integral part of the proprietary materials that make up your business. If you ever approach a bank for a loan or decide to sell your business, you‘ll need to produce more than your personal tax returns to support your requests or your asking price. If you’re a sole proprietor, make sure that your heirs know how to access your records and reports so they can continue the business or sell it if needed
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