Do small- and medium-sized enterprises need integrated reporting?
It is a general belief that integrated reporting is only for the large business. As if SMEs hardly gain anything save the time wasted for preparing such a report. Meanwhile, they could spend that time for their own development. In truth, it is not. Integrated reporting brings tangible benefits to companies. You just need to be able to derive them.
What is the benefit?
What is the most common benefit for companies? Growth, development, prosperity, increased profits. Through integrated reporting, small companies can study their business profile visually, evaluate their achievements, failures, and potential risks. Every bit of information will be clearly mapped and brought to the owner’s table. The owner will not overlook a thing as it may happen with financial statements, which indeed can be confusing.
It goes without saying that small to medium companies with several owners do need the integrated reporting. in this case, it can help each shareholder to get a comprehensive information on the business performance and become a solid foundation for attracting additional investment, partners, or clients.
Finally, integrated reporting does not have to be another addition to the never-ending flow of documents that companies have to deal with all the time. It can be used occasionally as a substitute for other reports, such as financial statements, in case you need a bank loan. This way, a company can kill two birds with one stone, i.e. study the subtleties of its progress and provide a creditor with the information required. It is quite convenient.
In all essence of things, the integrated reporting allows small companies to use the same benefits the large ones do. However, the method of preparing such documents can vary in both cases. More specifically, small companies will have to take fewer efforts other than the large ones since small companies are not required to submit large volumes of data and detailed descriptions. It is exactly the opposite in this case and the brevity says it all. The emphasis should be laid on the key aspects without digressing into irrelevant matters.
Subtleties of integrated reporting for small-sized companies
In short, SMEs have three key objectives: finding clients, raising additional funding, and succeeding in tenders. And the integrated reporting should serve exactly to implement those objectives. To do so, you should follow a fairly simple strategy when preparing the reports.
- Make a statement of intent. We suggest starting your document with a brief description of your objectives, plans, and the strategy used to accomplish those.
- Make an emphasis on the key audience whom this document is prepared for. A company should have a strict division of stakeholders (buyers, investors, business partners, etc.) and select various communication tactics and incentives.
- Specify the valuables created by your company. First, you need to figure what these valuables are, goods or services? How society benefits from them, whether they change it for the better — all this information should be outlined as well. It is important to mention the other socially beneficial achievements of your company if there are any (investment in environmental protection, help for the deprived, staff welfare, etc.)
- Describe your business model. In our case, talking about it is not as important as to explain to your stakeholders how the strategy is aligned with your business model, how it helps to avoid risks and attract new customers.
- Allocate resources. The resources needed to implement the plans set. This may include either the recruiting of professionals, procurement of new equipment, new product design — everything required to implement the strategy and business model selected.
- Let know of the level of communication within the company. How good is your teamwork? Are all team members in touch? Do they get updates on innovations and changes in their work? Answering these questions can contribute to your company image in the eyes of stakeholders and showcase the company capacity to cope with unforeseen problems in a timely fashion.
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