The Fast Close Toolkit

CHAPTER TWENTY EIGHTInternal and External Reporting

INTRODUCTION: INTERNAL REPORTS PROVIDE a company with the information needed for decision making and business rules. Many internal reporting processes include a comparison of actual financial results with budgets, forecasts, and plans.

The internal reporting process often includes routine reports that provide information on production, sales, labor and payroll, results of operations, schedule of debtors, research and development, and working capital changes.

INTERNAL REPORTING

Internal reporting is a business practice that involves collecting information for internal use. Big firms rely on internal reporting to make a variety of management decisions, and small companies can also benefit from internal reports. In some companies, a specific staff member is charged with internal reporting while in others people complete internal reports as part of their jobs. These reports are not designed to be made public and may include confidential or proprietary company information.

One important area of internal reporting is financial reporting. Financial reports are used to monitor a company's fiscal health and can inform decisions that need to be made about the direction in which a company will be taken. For example, an internal report could reveal that one division spends a lot of money without generating very much revenue and managers could discuss how to make that division more efficient or consider the possibility of closing that ...