External vs Internal Reporting

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Reporting is a way to communicate the status of your business. What you want to communicate to the external stakeholders could be different from what you want your employees to understand where the business stands.

There are 3 differences between external and internal reporting:

  1. Tone—To the external stakeholders, it is preferable to position the business in a positive light. For internal reporting, the tone can be either, upbeat or concerned, or both. This leads to the second difference.
  2. Content—The content needs to support the tone of the report. So the results you incorporate should be consistent. If there are specific concerns that you want the employees to pay attention to, incorporate pertinent results that substantiate your message.
  3. Level of details—For external reporting, you might want to orient around high level performances. Getting into too much detail doesn’t necessarily serve the external stakeholders. For internal reporting, you want to offer specific and as much relevant details as appropriate to illustrate an issue. Your goal is to get the employees on-side to work with you to overcome the problem together.

In preparing a report, determine the intent and tone of the message first and foremost, then design the content and details accordingly.

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