Periodic reports, etc: Overview, definition, and example
What are periodic reports, etc?
Periodic reports refer to scheduled updates, disclosures, or statements that a party must submit at regular intervals under a contract, regulatory requirement, or business arrangement. These reports may include financial statements, operational updates, compliance filings, or other key performance indicators.
For example, in a corporate loan agreement, a borrower may be required to submit quarterly financial reports to the lender to demonstrate ongoing financial stability. Similarly, in a government contract, a service provider may be required to submit periodic progress reports detailing project milestones and expenditures.
Why are periodic reports important?
Periodic reports ensure transparency, accountability, and compliance in contractual and regulatory relationships. They provide stakeholders with timely and accurate information necessary for decision-making, risk management, and performance evaluation.
For businesses, requiring periodic reports helps monitor progress, enforce contract terms, and maintain trust between parties. These reports also help prevent disputes by ensuring that all parties have a clear and updated understanding of financial, operational, or compliance matters.
Understanding periodic reports through an example
Imagine a private equity firm investing in a startup. The investment agreement requires the startup to submit monthly financial reports detailing revenue, expenses, and cash flow. This helps investors track the company’s financial health and performance.
In another scenario, a construction company working on a government-funded project must submit quarterly progress reports to confirm that the project is on schedule, within budget, and compliant with regulatory standards. These reports help ensure that public funds are used responsibly.
Example of a periodic reports clause
Here's how a periodic reports clause may look like in a contract:
“The Party shall provide periodic reports as required under this Agreement, including but not limited to financial statements, compliance certifications, and operational updates, on a [monthly/quarterly/annual] basis. Failure to submit reports in a timely manner may result in penalties or termination of this Agreement.”
Conclusion
Periodic reports provide essential transparency and accountability in contractual and regulatory relationships. They help track performance, enforce compliance, and ensure informed decision-making among stakeholders.
By including a periodic reports clause in agreements, businesses can establish clear reporting expectations, prevent disputes, and maintain trust in contractual and financial arrangements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.