How to create an engaging analytical report

There comes a time in business when you'll need to confront a particular problem or make a major decision. While many types of business reports can be useful, an analytical report can help you make sense of historical data and craft a new strategy for the road ahead.

Use this guide to help you prepare your own analytical reports, and learn how to make data-driven decisions that enhance the performance of your business.

What is an analytical report?

An analytical report (sometimes called a "data analysis report" or an "analysis report") is a type of business report that aims to analyze and interpret quantitative company data. Typically, the end goal is to present actionable insights to assist with making key business decisions.

A well-written analytical report can:

• Offer decision-makers predictive analysis about what to expect in the future
• Help you weigh the options when you're considering a major decision
• Provide end-to-end visibility of your company's important data
• Present data using charts, graphs, and other data visualization tools

Since an analytical report is designed to improve internal business intelligence, it will rarely be circulated outside of your workforce. Analytical reports will often be reserved for a small audience, providing data analysis for use in meetings and strategy sessions.

Analytical reports vs. informational reports

Many businesses create reports for a variety of circumstances. The two main types of reports are analytical reports and informational reports.

Informational reports are designed to report the facts and nothing more. An analytical report, by contrast, is designed to interpret data and will usually find solutions for a specific issue.

In other words, while an informational report is designed to be merely descriptive, an analytical report is designed to be prescriptive. It analyzes complex data and offers proposed solutions so that company leaders can make informed decisions about the future.

The format of an analytical report

Analytical reporting can take many forms, but every completed report will have the following components:

• A title page reflecting the main topic of the report
• A table of contents
• A paragraph explaining research methods
• An introduction, articulating your main idea
• The main discussion broken into paragraphs with headings and subheadings
• A conclusion, including recommendations and next steps
• A bibliography or appendix showing sources or additional data

When you write an analytical report, the length can vary considerably. The key is to stay organized and break lengthier sections into smaller, digestible pieces. Use headings and subheadings to separate report sections, and make use of charts and other visuals to help readers get a better understanding of the information gathered in your document.

How to write an analytical report

Ready to write your first analytical report? Here are the steps you'll take to write an analytical report for your company:

1. Identify the problem

Start by focusing on a single, clearly-defined problem. What specific issue is affecting your company? Who is affected by this problem?

For instance, you might think about questions like:

• How can we improve the conversion rate on our digital marketing channels?
• How can we increase total revenue in the next quarter?
• What prevented you from meeting a sales target in the previous quarter?

Your goal is to analyze the quantitative data to answer this question and provide some possible solutions for the future.

2. Perform careful research

Your next step will simply be to gather data. You might start by gathering historical data from the company itself. Ask your management team if there have been any other reports written on a similar issue.

When analyzing current data, you might gain access to data provided by different departments within your organization. But you might also look at outside sources, such as business news websites, reference books, or industry publications.

3. Write the main discussion first

As you gain more data to work with, you can start to organize and assemble the relevant information into a usable report.

At the same time, analytical reports are not meant to just be a collection of raw facts. You'll want to pull key data insights and speak meaningfully about what they might mean for your company and business processes.

The body of your report can become lengthy if you're not careful. Break up your discussion by using headings and even subheadings. Aim for at least three headings in your report. Each heading should address the original problem that your report is focused on.

You can also present data insights using charts or graphs. Many chart types are helpful when making comparisons between different measures. For example:

• Bar graphs can be helpful when showing comparisons between sales figures
• Line graphs can be helpful for showing changes in sales over time
• Pie graphs can be helpful for showing how your resources are allocated

These visuals help create reports that tell a compelling story about your company's history — and its future.

4. Create action steps and write your conclusion

Once you've completed your detailed analysis, you'll want to draw up some clear action steps. This work can be challenging, but it can also be an important step when your report is used as part of a larger decision-making process.

Think about questions like:

• How does this historical information affect the company today?
• How does the data influence our current business processes?
• When might the business strategy need to change based on this data?

Many management teams assign analytical reports to lower-level staff members as part of a belief in empowering employees to participate in corporate decisions. If so, make sure that your final report contains multiple options rather than a single master plan. Always base your recommendations on clear data, which you'll reference throughout your analytical report.

5. Write a compelling introduction

Once you're finished, you can create a compelling introduction. Make sure to state clearly the problem you wish to address. It's also helpful to surface the "pain points," which basically means: "What will it cost the company to make no change?" This clarification prompts the reader to consider the possibility of adaptation to meet these challenges head-on.

6. Insert a paragraph regarding research methods

The most time-consuming parts of your report are now behind you. But you still need to organize your report into a completed structure.

Start by including a paragraph concerning your research methods. How did you go about analyzing data? You might mention traditional methods such as customer surveys or periodicals, but you should also talk about your strategy for extrapolating that data to determine your company's likely future.

7. Place references and additional data in the bibliography or appendix

Always, always, always validate your claims. Your analytical report should contain footnotes that support your research. Both Microsoft Word and Google Docs allow you to easily insert footnotes and endnotes. For electronic sources, you should include the website's publication date, the URL, and the date that you originally accessed the information.

It's possible to have other data that simply didn't fit into a single report. If you do, include additional detail in a separate appendix. In the main body, you can summarize this data, then simply refer readers to "Appendix 1" for a thorough look.

8. Organize your report and create your table of contents

The writing part is over. Now, you'll want to put the pieces together in a logical or chronological framework. See above for the suggested order.

Numbering your pages will make it easier for readers to use your analytical report during a team meeting. You'll also use these page numbers to create a table of contents, which will go toward the beginning of your finished document.

9. Create a title page

To look professional, give your analysis report a title page. It doesn't have to be fancy but should include:

• The title of the report
• The date that the report was completed
• Your name and the names of any other contributors
• Your company logo

Assuming you can choose your own title, make sure to choose a title that directly relates to the problem that you're focusing on. This approach will help readers instantly understand what they'll be reading.

10. Review before submitting

Finally, review the finished document. You might even ask someone to read it over for you to eliminate spelling or grammatical issues, as well as to ensure that your writing is clear and to the point.

Tips for optimizing your analytical reports

How can you create the best, most dynamic analytical reports? Follow these suggestions:

Know your audience

After swimming in data, it's important to adapt your writing style to an audience who might not have the same level of familiarity. If you work for a digital marketing agency, for example, you don't want to write as if you're a data scientist. Keep it simple, and make sure to explain unfamiliar terms.

Additionally, it's important to know whether your audience is positive or negative. When dealing with a receptive audience, you can sprinkle your conclusions throughout your report.

However, if you expect your audience to respond negatively, save your proposed solutions for the very end. That way, you can build consensus with your audience about the underlying realities before dropping suggestions on company improvements.

Use the right KPIs

During the analytical reporting process, you'll need to rely on key performance indicators (KPIs) to assess your company's historical performance. But you'll likely encounter so much data that you'll need to sift through and find the right metrics.

For instance, if you're trying to analyze your customer conversion rate based on your marketing efforts, you don't need to worry about things like customer acquisition cost. Staying focused on the right KPIs will ensure that your report only includes the most relevant data.

Avoid using too many charts

Charts and graphs are helpful, but only when used sparingly. Try to aim for only one chart per heading, though there may be times when additional data will be necessary. Instead, focus on writing and analysis. Don't just present the facts to your audience — tell them what the facts mean for the business.

Think stories, not data

When you craft your analytical report, you need to be a data analyst as well as a storyteller. That is to say, you need to think in terms of the broader meaning for your business and craft your report in that fashion.

A useful way to think of this is to frame the discussion in terms of three things:

• Problem
• Solution
• Application

The introduction will present the problem, while the main body will explain it further. Your conclusion will introduce some possible solutions, and then you can help your readers visualize what business might look like with those solutions in place.

Augment your business intelligence with Invoice2go

Businesses thrive on the right data, and the right tools can put that data at your fingertips.

Invoice2go provides innovative software to help you send invoices, receive payments, and manage your company's finances. Using our advanced reporting tools, your next analytical report will be a snap. Try it for free today. Sign up now, and you'll receive a 30-day no-obligation trial to see what our platform can do for your business.

Frequently asked questions

Feeling stuck when writing your business report? Here are some answers to frequent questions about the process: