Advantages And Disadvantages of Business Reports

Reports are a crucial form of business communication.

They help in documenting important facts and data for businesses. However, at the same time reports can be time-consuming and expensive to prepare.

In the article, we have drafted the advantages and disadvantages of business reports with examples that can help you re-evaluate your decision of writing business reports.

What Are The Advantages And Disadvantages Of A Company Report?

Advantages of Business Reports:

The main characteristic of a business report is that it is used as a tool for communication, analysis and decision-making. There are a number of benefits of business reports. They are:

1) Helps in making crucial business decisions: Good report writing is a key ingredient in making important decisions and taking steps towards the development of a company. The information provided in a business communication report is used to formulate strategies, take action and analyze complex problems.

2) Business reports act as a tool for managers: Business reports are a great managerial tool. They make it easy for the managers and executives in a company to oversee how the business is running. Managers use the components in business reports to achieve the following functions:  

  • Coordinate
  • Control
  • Plan
  • Organize
  • Analyze
  • Motivate

3) Represent important facts and business data: The purpose of a business report is to communicate factual data and accurate information. Business reports rely on information collected through researching and consulting credible sources. For example, the stats about a company’s monetary standing are recorded in a financial report.

4) Overcoming business challenges: Any kind of business sees its highs and lows. Over the lifespan of a business, challenges and problems of various kinds may arise. Reports help in recording and analyzing problems. These reports can be referenced in the future to solve these issues from recurring. 

5) Recourse for investigation: Reports are crucial for documenting research, accidents, field studies, etc. The researchers conduct their studies and the key findings of their investigation are written in the form of reports. Along with this, they may offer solutions and recommendations for solving the issues that arise.


The above image is a real example of a conclusion and recommendation given within a business report.

6) Help to communicate important information: One of the prime benefits of a report is that it serves as a communication channel. There are many different types of business reports that bridge the gap between different sectors and executives of a company. They also reduce the administrative distance between different levels of management.

Disadvantages of Business Reports:

In the above section, we discussed the advantages of a business report. The importance of business reports in the effective functioning of a company is crucial. They are a vital part of any business. However, there are a few drawbacks and limitations to business reports come. They are: 

1) Business reports are not interactive: One major limitation of a report is that they are not interactive. Once a report is drafted and submitted, it takes some time for the manager to review it and offer feedback. This could cause delays in communication and lead to a waste of time.

2) Business reports can be biased: Report writing must always contain factual and accurate information for effective decision-making. A writer may slip personal bias and opinions into the report. This could change the nature of a report which is supposed to be unbiased and objective.

3) Extensive use of technical jargon: Business reports should be easy to understand and skim through for busy managers. However, sometimes a writer may include extensive technical language and “insider terms” in the report making its readability suffer.

4) Outlining is time-consuming: A report usually must follow a set format and guidelines. Before writing it, a writer must collect factual information from different sources and prepare an outline for the report. This information is then written accordingly in an introduction, body and conclusion format.


This process can be time-consuming. Even in the case of informal business reports, a format and outline have to be prepared.

5) Limited Time Span: As a company carries operations, the need for reports increases. A report is prepared for a specific time and purpose. After this purpose is achieved, the report becomes redundant. This makes the usefulness of a report valid only for a limited amount of time.   

6) Inaccurate data cannot be changed once drafted: The purpose of a business report is to convey factual data collected from credible sources. However, sometimes the data collected may be subject to change. It cannot, however, be reflected in a report that’s already drafted.

Examples of Accident Report Written to General Manager

For example, an accident report may provide information about a mishap but more information related to the case could be found later.

Related Reading: 20 Importance of Business Report In Business Communication

Advantages and Disadvantages of a Research Report

A research report is used to document the key findings of a systematic research process and field studies. In this section, we will look at the advantages and disadvantages of a research report.

Advantages of a Research Report:

1) Identifying knowledge gaps: A research report is used to document the research already collected and also to identify areas that require further investigation.

2) Understanding the audience: A research report helps in understanding the customers and their needs. This information is used by a company to improve its services to its target audience. 

3) Precise information: Research information contains clear and precise information. All the content in this report is well-researched and collected from multiple reputed sources.

Disadvantages of a Research Report:

1) Insufficient Data: Sometimes while conducting research, the data collected may be insufficient. This makes the process of formulating strategies riskier as the data collected is limited.

2) Deadlines: It may not always be possible to form a high-grade research report as the writer is only provided with a limited time to research.

3) Research may be expensive: A research report can require a large number of funds as it can include work trips, running ads, conducting surveys and interviews, etc. 

Advantages and Disadvantages of Market Report

Market research is a must for any company. Understanding what the market demands and how to meet their needs must be a top priority. This is why market research is conducted.

We will look at some advantages and disadvantages of a market report.

Advantages of a Market Report:

1) Minimizes Investment Risk: When adequate market research is done, it reduces the risk for a company to invest funds towards a product or service as they have more knowledge to make decisions.

2) Helps strengthen company position: With the help of a market report, a company can better understand the demands of its customers and stay ahead of its competitors.

3) Identifies threats and opportunities: A company can identify channels which may cause them problems and try to eliminate taking unnecessary risks. Likewise, by studying a market report, they can also identify new opportunities. 

The disadvantage of a Market Report: 

1) Market research is expensive: Conducting market research can be quite costly. A company may even need to hire a separate research team to do it for them. 

2) Inaccurate Information: The information from marketing research can be inaccurate and poorly researched. This can cause potential losses to a company.

3) Information may become outdated: Due to ever-changing market conditions, a market research report may become outdated after a certain period of time. 

Advantages of Company Analysis: 

A company analysis is used to evaluate the performance of a company’s business activities. This is accomplished by taking objective metrics and statistics into consideration. 

Here are a few advantages of Company Analysis:

1) Studying Competitors: In the marketplace, a business may have to face competition from other companies. Company analysis helps a company study the competition and provides information to evaluate which areas can be improved.

2) Industry Analysis: A company analysis report can help in understanding current market trends, growth drivers, maturity of the industry, potential challenges and opportunities. 

3) Business Offerings: A company must always be aware of its customers and their demands. A company analysis is used to give a clear idea of the products and services a company offers to the market. 

Types of Business Reports

1) Informational Report: Informational report is defined as an objective report which leaves out detailed explanations and only mentions facts. Example – annual budget report, employee roles, attendance report, etc.

2) Routine Report: This kind of report is prepared at routine intervals for routine activities. The frequency of a routine report can be hourly, weekly, monthly, etc.

3) Formal Report: A formal report is a form of business report which contains detailed facts, studies and objective information. This is done in a structured format including sections such as table of contents, appendices, etc. 

4) Informal Report: An informal report is usually in the form of a letter or a memo. Its tone is casual and can directly be addressed to the reader. Due to its short length, it is to the point and leaves out heavy details.

Related Reading: 10 Differences Between Formal & Informal Reports

5) Progress Report: A progress report tracks the development of progress across the company. It can track the performance of employees, teams, departments etc. This is done to ensure the work is meeting the goals set by the managers.

Related Reading: 15 Types Of Business Report In Business Communication

Frequently Ask Questions

Q1. What is a business report?

Ans. A business report is a collection of data and analysis that provides important information to the company. It is a formal document used to communicate information in a systematic manner. The information includes statistics, facts, research analysis, arguments, recommendations, etc.

Q2. Importance of business reports in business communication? 

Ans. The business reports will provide important and useful information on spending, growth, and profits. Business reports facilitate forecasts for the future, and marketing plans, guide budget planning and improve the decision-making process. It helps to track the progress and growth and identify the trends or any other irregularities that might require further investigation.

Q3. Why does an organization need to write a report?

Ans. Business reports provide useful management insights that include information like an organization’s spending, profits, and rate of growth. Business reporting promotes transparency, and for public companies, an annual report is a legal requirement to provide shareholders, the government, and others with financial data and ownership information about the business. 

Q4. What are the benefits of the business report for the organization?

Ans. There are several benefits of a business report, and these include: 

  • The report provides consolidated as well as updated information
  • The report helps in internal communication
  • The report facilitates decision-making as well as planning. 
  • The report discloses some unknown information. 
  • The report gives relevant information to the employees. 

Q5. What are the main disadvantages of Report writing?

Ans. Putting together a report is a laborious process. The time and money required to produce them are high. Reports of a technical nature are not always easy to read. It might be challenging to implement the suggestions made in a statement.

Aditya Soni

Aditya is the head of content at clearinfo and is responsible for improving the site's organic visibility. He is a certified SEO trainer and has worked with SaaS companies and startups to enhance their digital marketing presence. He is also an ahref fanboy. Click to connect with him on Twitter, and LinkedIn.  

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