Financial Reports vs Management Report: What is the Difference?
Yes, they are different.
You may think that a financial report is just the same as a management report but there is a reason that they have different names. This is because while they may have similar content, they have their differences too.
So, if you are confused then stick with me. This is because when I write my essay or my report, I think a great deal and this allows me to pick out the fine points of my papers. This goes for the reports as well.
So, you need to differentiate between the two before you start working on one report or the other, and yes, I can be of help here.
Let me tell you about the MAJOR differences between these types of reports so that things are a bit clearer for you.
Financial Report: Used for External Purposes
This means that if you are creating a financial report, then your audience will be people OUTSIDE of your company. Financial reports are usually made public so anyone can access them.
So, when it comes to your audience, these people include your competitors or even new investors. You will have to think of them before you write your financial report. If you do not understand how to do it, then you can take help from your friend or from an online essay writing service.
Management Report: Used for Internal Purpose
This means that a management report is made for the people within the organization. These people include the CEO, COO even the CFO. And of course, the stakeholders and shareholders.
They like to know what’s going around.
So, this type of report is written for people who already know the context to most situations. So, you do not have to spend a lot of time explaining stuff in this report.
Financial Report: Used to Look Backwards
I mean that this report is used to look backwards on the performance of the company. If you are an essay writer, then you should know all about reports as well. So, you should know that a financial report assesses what has happened in the past.
It brings forth the record of the past fiscal year and people use this to evaluate the financial performance of the company.
Management Report: Used to Look Forward
A management report is not about the past. It's about the future.
This means that the evaluation of this report includes looking at what was done wrong in the past and taking active measures to make sure that those mistakes are not repeated in the future.
So, a management report helps to prepare a company for what is ahead of them.
Financial Report: Used to Look at Financial Records ONLY
As the name suggests, a financial report ONLY talks about finances. This means that it will include all the financial records of the company, its sales and revenues and losses.
All of it.
It will include balance sheets and income statements for all departments. But that is about it. It will not include any other additional information that is not related to finance.
Management Report: Used to look at Financial AND Operational Records
Since the management report is for the company, it includes both financial and operational records. This is because this type of report is used to look forward into the future.
This means that the company’s both financial and operation performance needs to be analyzed to make sure that things run smoothly and effectively in the future.
Financial Report: Used to Get Information on the Whole Company
I know that I said that this report only focuses on the finances but it is also important to know that it focuses on the finances of the entire company. This means that it includes every little detail, from salaries to payments.
It covers it all and it is made for all departments.
This means that by looking at a financial report, a person can get the financial information of the whole company.
Management Report: Used to Get Information on the Management
A management report only focuses on management.
The finances included in it are about the management and its main focus is on how the company is being operated. This means that it has a look at how the management is working and how efficient they are.
This information is then processed by the top management who work around the issues faced by their managers.
Financial Report: Is Mandatory
It is actually mandatory for a company to provide their financial records and make them public. After all, the performance of the company is judged by this report and there needs to be a system of transparency.
Hence, a financial report.
Other than that, the company decides if it wants to release an annual report or a biannual report.
Management Report: Is Optional
It's a surprise, right?
But it's true. It is not mandatory to provide a management report. It can be provided to the bosses voluntarily or the bosses can ask for it but there is no compulsion here.
If an organization is small, then it's possible that it can be managed without a management report. So, it’s totally optional after all.
So, I hope you get the difference now…
If not, then here's a good suggestion. You should get in contact with an essay writing service called CollegeEssay.org and tell them that you need one financial report and one management report. No kidding.
This will help you tell the two types of reports apart and you can know how each type of report is written.
I think this will be a great way for you to learn creating your own reports so just give it a try, ok?
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