Financial Statements vs. Financial Reports – What’s the Difference?

Financial Statements vs. Financial Reports – What’s the Difference?

The terms “financial report” and “financial statement” are often used interchangeably, but they are not one in the same. “Financial report” is an umbrella term that several types of reports fall beneath. Financial statements are one such report that falls under the financial report umbrella. In other words, all financial statements are financial reports, but not all financial reports are financial statements.

Financial reports

Financial reports gather important financial information for distribution to the public. Under this umbrella are:

  • Financial statements such as income statement, balance sheet, statement of cash flows.

Quarterly and annual reports

  • Quarterly earnings that are then distributed via press releases, conference calls, or company website.
  • Quarterly and annual reports for governmental agencies such as the Securities and Exchange Commission (SEC).

It is incredibly important that your financial reports are accurate and produced in a timely fashion. This helps your company make informed business decisions and it helps you to maintain your compliance and your reputation in the industry. A good financial reporting solution should be fast, easy to use, and always accurate. 

Financial reporting software can integrate with your existing general ledger, affording you powerful and modern reporting capabilities without the high cost of replacing your GL or ERP. 

When you’ve implemented the right reporting solution, you’ll see an improvement in productivity.  Generating, packaging, and distributing reports can be done with precision and speed, even when consolidating data from different sources, locations, and currencies. The ability to automate reports means reports are perfectly formatted for your needs–whether they are meant for the board or the SEC.

Financial statements

The purpose of financials statements is to provide information about financial position, cash flows, and the results of operations. This information helps the audience of these statements make decisions about allocation of resources. 

The three most common financial statements are the income statement, the balance sheet, and the statement of cash flows.

  • The income statement informs on the ability of the business to generate a profit, and it reveals volume of sales and the nature of various expenses. It can be used to analyze trends.
  • The balance sheet is used to report on current status of the business as of the date of the balance sheet. It’s used to estimate such things as liquidity, debt position, and funding.
  • The statement of cash flows is used to show the nature of cash receipts and disbursements. Since cash flows do not always match revenues and expenses as shown in the income statement, this is an incredibly useful financial statement.

As a whole, financial statements can be used for credit decisions, investment decisions, taxation decisions, and union bargaining decisions.

FYIsoft

FYIsoft supercharges your reports. FYIsoft is proven to cut financial reporting time by up to 50 percent, and in one case it was 500 percent faster than a competitor reporting solution. FYIsoft maintains its speed even in complex multi-entity or global currency environments. Because FYIsoft integrates with your current general ledger, you can get the power of the cloud reporting solution without replacing your ERP. 

FYIsoft helps you empower your users to access financial reports from any device with an internet connection, and to drill down into transaction details, including the invoice. FYIsoft is easily implemented and you can be up and running with your new reporting solution before your next financial close.

Schedule a brief demo with FYIsoft today.

 

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