An annual report is a comprehensive document presenting a company's financial performance and position for the year, including financial statements, director reports and auditor opinions.
The annual report is the primary financial communication between a company and its stakeholders. For small businesses, it typically includes the profit and loss statement, balance sheet, cash flow statement, notes to the accounts and the director's report. Larger companies and public companies have additional requirements including auditor's reports, corporate governance statements and executive compensation disclosures. The annual report serves multiple purposes: fulfilling regulatory obligations, providing information to shareholders and investors, supporting tax return preparation and creating a historical record of business performance. While small private companies may not be required to produce a formal annual report, preparing one is good practice for any business serious about financial management. SortBooks helps produce accurate annual reports by maintaining clean, complete and audit-ready financial data in Xero throughout the year.
SortBooks helps with the bookkeeping behind annual report by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing annual report by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
Financial statements are formal reports that summarise your business's financial position and performance. The three core statements are the profit and loss, balance sheet and cash flow statement.
The balance sheet is a financial statement that shows your business's assets, liabilities and equity at a specific point in time. It follows the equation: Assets = Liabilities + Equity.
The P&L (also called the income statement) shows your business revenue, expenses and resulting profit or loss over a specific period.
In bookkeeping, compliance refers to meeting all legal and regulatory requirements for financial record keeping, tax reporting and lodgement obligations set by your tax authority.
The financial year (or fiscal year) is the 12-month period your business uses for accounting and tax reporting purposes. It may or may not align with the calendar year.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.