Of all the work I’ve done with reports and all the white papers I’ve read, I’ve never seen anyone discuss how to write financial reports. Yes, there are many examples of what financial reports look like and there are sample .RPT files you can download, but no one has actually documented the steps of how to create them. It seems like this is some sort of secret that is only given to those who are part of some underground group. Considering that Crystal Reports is the primary reporting tool in many financial departments, I think this is something that should be common knowledge. Even for someone like myself who has audited the financial statements of many corporations, using a reporting tool to create these reports from scratch is not an easy task and having a reference guide for doing so would be very helpful. This appendix hopes to rectify this problem once and for all and give you the steps for creating common financial reports.

In this chapter, we’re going to learn the basics of how accounting works as well as how to create the primary financial reports associated with it. Not only that, but we’ll also look at some other frequently used reports that people have problems with. We are going to create a Balance Sheet, Income Statement and a Multi-Year Income Statement using cross-tabs.

There are three potential problems encountered when creating financial reports:

1. Many times the person assigned to creating the financial reports isn’t familiar with financial reporting concepts. The report designer is usually familiar with the database structure and some general business concepts, but is not an expert in accounting. Asking someone to quickly get up to speed on accounting principles and financial reporting is a lot to ask.
2. Financial reports are complex. Creating them with a reporting tool like Crystal Reports requires that you go about it very methodically and test frequently. It’s not a simple matter of using the Report Expert to select the tables and fields to print and applying a Crystal Reports template.
3. Financial databases are all different. Each software program uses a different database structure for their accounting tables. Following a generic set of guidelines for creating reports requires you to focus on learning the concepts and then applying these concepts to the actual database you are working with. Even after you get a good understanding of the concepts involved, each accounting database can have its own set of quirks that require you to be creative when designing the reports.

This appendix addresses each of these three problems in the following ways:

• We learn basic accounting principles. This makes it possible for someone who only has basic business experience to learn how accounting transactions are recorded. Most importantly, you’ll learn what it means when a number is either a debit or a credit.
• We look at how this information is stored in a database. Since each database is different, we establish some general guidelines about what to look for in a database and how to interpret the data.
• We use tutorials to design each financial report in detail. This shows you how financial reports are structured and the steps to build them in Crystal Reports.

As you can probably figure out, this is advanced stuff we’re talking about. We’re going to take it one step at a time so that by the end of the appendix you will have had the opportunity to create each of these financial reports and understand the decisions necessary to do them on your own.

Let’s get started by learning the basic accounting principles that every company uses.