Annual reports, Common mistakes, Corporate reporting, Editing, Proofreading, Writing

Six common mistakes in annual reports

A company’s annual report is an important and ongoing component of its corporate financial reporting.

The report provides information to shareholders and other stakeholders about the company’s financial performance. This is why annual reports are made publically available – they provide transparency about the activities of the company over the previous 12 months. Prospective investors, creditors, analysts, employees and any other interested party can study and analyse the company’s growth, its ability to pay its debts, whether it makes a profit and what proportion of its earnings is retained to develop the company.

Following are six common mistakes I’ve seen in annual reports over the past decade, and my advice on how to avoid such errors.

MISTAKE #1

Annual reports are usually multi-authored, and this is where many problems begin.

Each section writer has a different writing style, and contributing writers are not aware of what others are writing elsewhere in the report. The person who cops the consequences of the disconnect is the reader, who soon becomes aware of it and who, instead of reading on, flicks through the pages to make sure they’re not missing anything vital and then closes the report for good.

The annual report isn’t the place to tell stories, or take three pages to say something you could say in one. It should be a dynamic publication – one that presents information in clear unambiguous terms, without rambling or repetition. 

It’s the place to address all stakeholders, and present precise information in informative and interesting ways. An editor is trained to smooth out differences in tone, voice and tense. After they’ve conducted their edit, the report will also have consistent punctuation, grammar and spellings.

MISTAKE #2

Using industry-specific jargon and acronym-laden language can be a natural way to communicate if you work in-house. Your work colleagues all understand this codified way of communicating. But when it comes to the company annual report, please don’t do it. It’s a sure fire way to alienate and lose readers.

If you really must use a number of industry-specific terms, acronyms and abbreviations, make sure you spell out the short form in the first instance and then use only the short form thereafter, for example:

A new LMS (learning management system) was installed in July this year, and by early August the LMS was fully functional.

If you haven’t repeated the short form (LMS) for a few pages and are not sure readers will remember its meaning do the following:

The LMS [learning management system] was an expensive investment.

The conventional use of square brackets is for editorial comment, and in this case you’re reminding the reader what ‘LMS’ stands for. Don’t do it too often, but it’s a good save to help your readers.

Also create a glossary in your annual report that includes explanations and definitions of these terms for the readers – and make sure you tell them where it is. Add ‘See Glossary’ in round brackets after terms that might need clarifying and make sure the Glossary is in the Table of Contents with a page number.

MISTAKE #3

Be forthright. Don’t leave out meaningful analysis in your annual report. If your company’s performance has been poor, or there’s been an unfortunate work accident, be upfront and address it.

A good writer, together with a good editor, can be a great support here. Work with them and rely on their expertise to communicate this type of information in the most appropriate way possible.

MISTAKE #4

Don’t hire a graphic designer and think you’ve got the project covered. Designers aren’t responsible for grammar or punctuation, or for the factual accuracy of the content you give them. Remember, a designer is an intrinsic part of the team, but you also need an editor.

A professional editor will work with your writer/s or project manager and they will know when and how to raise queries. A good editor also knows how a designer works. They know how text and graphics should sit on a page and they work with the designer to fit your content perfectly. Page fitting is a tricky skill and a vital part of an editor’s toolkit.

A designer and editor work collaboratively to make your annual report a highly functional publication where every page is perfectly pitched and error-free.

MISTAKE #5

But what about the numbers?

An accountant prepares the financial information in an annual report. If it’s a large company, it may be a team of accountants. A lawyer may also be involved in preparing the financial and legislative content. A professionally trained editor knows how to work with subject-matter experts such as lawyers and accountants.

Editors won’t edit the financials in an annual report, but they will leave queries for the accountant and/or lawyer if something doesn’t look correct or appears to be missing.

MISTAKE #6

With so many people contributing to an annual report, it’s possible that a single company employee will struggle to pull it all together into one publication at the end of the writing process.

I remember once, many years ago, a manager forgot to check the text on the spine of her company’s annual report and sent it to the printer. More than one thousand copies were printed with the wrong date on the spine because the designer hadn’t updated the template from the previous year.

Spine errors are one of the commonest mistakes in publishing, and the consequences are always embarrassing and expensive.

This is why a professional editor can be invaluable. They will have checklists that cover every aspect of the publishing process and will perform an extensive prepress check for you. When they sign off on your annual report you can be confident it is error-free and ready to publish – and that the spine of the report has been checked!

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