An annual report is a powerful tool for your childcare program. It showcases your performance, outlines future plans, and builds trust with partners, families, and staff. Depending on your business structure and state regulations, you might even be required to file one.
This article will walk you through how to write an effective annual report, from structuring the content to meeting legal requirements.
What is an annual report?
An annual report is a yearly document that summarizes your childcare program's financial performance and operations, while also presenting your plans for the year ahead.
Typically, an annual report includes:
- A letter from the owner, director, or board chair
- Management’s discussion and analysis (MD&A)
- Operating and financial highlights
- Key financial statements (balance sheet, cash flow statement, income statement)
The first half of the report tells your program's story. You can highlight key achievements from the past year and share your goals for the future. The second half provides the financial data to support that story, offering a transparent look at your program’s health.
Why is the annual report important?
Your annual report is a unique opportunity to communicate your program's achievements and goals. It serves three main purposes:
- Compliance: Fulfills any legal or financial reporting obligations.
- Communication: Shares key financial information and future strategies with stakeholders like employees, families, partners, and potential investors.
- Marketing: Tells a clear, data-driven story of your program’s success, which builds transparency and trust.
To get the most out of your report, follow these best practices.
Be accurate and transparent
An annual report provides an honest reflection of the past year. Be open about both successes and challenges, and use data to back up claims. This credibility builds trust.
Make it easy to read
While annual reports contain technical information, use clear language and an engaging layout. Photos and simple graphics can make the document more appealing and help communicate your message.
Plan ahead
Compiling an annual report takes time. Avoid leaving it to the last minute by collecting information throughout the year. Keep financial statements up-to-date and note key achievements as they happen. Using a template, like the Annual Report Template for Childcare Programs below, can also simplify the process.
Annual Report Template for Childcare Programs
This template will guide you through the process of compiling key data and narratives that highlight your program’s successes and areas for growth.
Who is required to file an annual report?
While large, publicly traded companies are legally required to file annual reports, they aren't the only ones. Depending on your business structure and state, your childcare program may also have filing requirements.
- Business structure: Limited liability companies (LLCs) and corporations often have annual reporting obligations. Check your business's legal structure to see what applies to you.
- State regulations: Filing requirements vary by state. Visit your state's business department website or the U.S. Small Business Administration (SBA) to learn about the specific rules in your area.
Failing to file a required report can lead to late fees and other penalties, so it’s important to stay informed about your obligations.
Annual report examples
Below are two annual report examples to give you an idea of what they entail and how you might apply them to your childcare business.
You can also download brightweel’s customizable Annual Report Template for Childcare Programs, which has been designed especially for the needs of childcare businesses.
Get started on your annual report
Writing an annual report for your childcare program doesn't have to be a daunting task. Whether it's a legal requirement or a tool for communication, a well-crafted report can highlight your successes and build trust with your community.
By staying organized throughout the year and using a clear template, you can create a professional document that showcases the value of your program.
