Interim reports are essential in the context of providing stakeholders with information related to continuing performance and progress. While the adoption of interim report is usually within a corporate context, project management, education, and government agencies actively use it too.
With this in mind, the blog will define what an interim report is, its purpose, and its structure. We will also be discussing its example and related concepts such as interim evaluation, progress reports, and interim statements.
Interim Report Meaning
In simple terms, an interim report refers to a financial update about a company’s fiscal year. The whole idea is to inform the shareholders, investors, and regulating authorities about a company’s performance, profitability, and financial position. They help the stakeholders make more current decision-making based on more regular reports than an annual report.
Purpose of Interim Report
Interim reports have various aims, but some of the more serious ones include:
Transparency: These show the current activities of a company in regard to performance. And, they are especially important to investors who need to understand if the company is working within its targets.
Timely Information: These reports come in much quicker than annual reports, and that would mean that the shareholders make effective decisions quickly.
Financial Health Monitoring: Businesses also use it internally in order to monitor the progress of things, make amends in strategies towards meeting financial and operational goals throughout the year.
Example of Interim Report
A classic example of an interim report would be a company’s quarterly earnings report. An interim report contains the critical financial data of the company such as revenue profit loss, and expenses in the past quarter.
For example, an interim quarterly report from a technology company indicates rising sales, but net profits have declined due to higher production costs. This provides the investors with an explicit view of where the company stands, how it’s meeting its challenges, and what to expect in the future.
Understanding Progress and Interim Reports
The terms progress report and interim report are often used interchangeably, but there is a subtle difference:
Progress report refers to the development concerning any specific project and activity. Moreover, it covers the milestones achieved, barriers encountered, as well as scope and schedule variances.
Interim report is those involving the firm’s financial outcomes and overall activities for a specific period of the fiscal year.
Even though the two reports ensure the stakeholders are always knowledgeable about various events of the company, in scope they differ.
Interim Review
Generally, an interim evaluation is considered a review of performance that the project or program experiences sometime during its implementation. In fact, such evaluations will help formulate whether the project or program is on track to meet the set objectives or needed changes. For instance, a company introducing a new software system may be conducting an interim evaluation halfway through, with an indication that it is well-placed to deliver against all project deliverables.
Interim Statement
An interim report has an interim statement that mainly covers the financial results. Thus, it may also include a balance sheet, cash flow statement, or income statement. The interim statement is a brief overview of the financial situation the company has reached at that particular time. It also stands as a teaser of what the annual financial statement may bring to light. This document provides a quick view over finances both for investors and managers, being also extremely helpful in assessing trends and making investment decisions.
Why Are Interim Reports Important?
Leading to Better Decision-Making: Interim reports provide current and actual financial information to enable firms and investors to make appropriate decisions at appropriate time.
Adjust Business Strategy: Thus, through the issuance of interim results, the company will be in a better position to gauge its shortcomings that could affect the attainment of year-end objectives and change strategy in that respect.
Boosts Investor Confidence: Interim results on the financial performance of the company reassure investors of their investment and minimize uncertainty.
How FastLane HR Can Help
An interim report will, therefore, be of paramount importance for the company to keep transparency and timely adjustment. So that the company and for any form of stakeholders understanding the performance of the company both internally and externally.
At FastLane HR, we provide financial management to human resource compliances with the best professional of the field. More than 1500 businesses have been assisted by our professionals till today. Contact us today to manage your business effectively.