Why good reporting matters for AIM companies

With less regulation in place for companies listed on AIM, those who take a compliance related approach to reporting can leave gaps in their story.

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Good reporting can have short and long term benefits for smaller companies. Heidi Harris, consultant and reporting guru for social enterprises, charities and small businesses, argues that it’s “time to think of the annual accounting process from a different perspective… see it as an opportunity to report on much more and to differentiate yourselves from your competitors.”

A well thought out Annual Report will provide a clear narrative of the year’s achievements, balanced with an aspirational view of the coming year. The tone will be engaging and personable, with plenty of visibility of the key figures to show ownership and accountability. Any stakeholder who picks up this type of report will come away with an enhanced perception of the company. As well as a strong investment case, this can boost brand awareness with customers and the local community, all ultimately helping the business to grow.

But the benefits of good reporting extend beyond the business itself. Small companies are important for economic growth. If quality reporting helps these businesses, then it will have beneficial effects on the economy in the long-term. The FRC’s financial reporting review panel believes that “trustworthy information engenders trustworthy behaviour, which in turn encourages investors to continue providing long-term finance in capital markets.” So, improving the quality of AIM reporting will increase confidence in the integrity of these businesses, ultimately fostering investment across the market.

Next, find out the crucial areas AIM companies tend to overlook in their reports.