The management report (tegevusaruanne) is the narrative part of an Estonian annual report (what happened in the business and why the numbers look the way they do. It’s not “for decoration”: banks and partners read it, and sometimes auditors do too. Mistake #1 is copying numbers from the statements instead of explaining drivers and risks.majandusaasta aruanne) where you explain
The strongest management report text usually has three parts: (1) material events of the year, (2) reasons behind revenue/expense dynamics, and (3) key risks and control measures. That’s enough to be useful without fluff.
Below is a one-page structure and sample wording so your management report is clear for a bank and actually explains the figures.
In practice, before filing, verify the requirements in Accounting Act (RPS) and Commercial Code (ÄS).
When the management report is required
As a rule of thumb: for companies larger than micro (and often for small companies), the management report is mandatory. Micro entities have had reliefs in recent years, but there are exceptions—for example, if there are issues around net assets/equity (netovara) or other case-specific requirements (including articles of association, audit/review, etc.).
Practical takeaway:
- if you are micro and everything is straightforward, check the portal prompts and category rules;
- if equity is weak, or you have complex transactions (loans, related parties, licenses, disputes), write a management report as a “defensive” tool.
A one-page “skeleton” (without fluff)
Here is a structure that almost always passes the common-sense test:
About the company (2–3 sentences)
- what you do (in revenue terms, not mission statements);
- where you operate (Estonia / export);
- what the key product/service was this year.
Material events of the year (3–7 bullets)
Only include events that affect finances or risk:
- launching or closing a business line;
- a major customer gained or lost;
- a change in monetization model;
- licenses / regulatory changes;
- changes in management or ownership;
- court disputes or claims (if material).
Why revenue and expenses changed (short but specific)
Use the format: “factor → impact → evidence”. For example:
- “Revenue increased due to expanding our B2B client base (+N contracts).”
- “Margin decreased because contractor costs and marketing spend increased.”
- “Payroll expenses increased after hiring two specialists in the second half of the year.”
Risks and controls (the most useful part)
Pick 3–5 risks that are real for your business:
- VAT on cross-border services;
- foreign exchange risk;
- accounts receivable (customer debt);
- dependency on 1–2 large clients;
- legal/licensing requirements;
- cyber risk (for IT/SaaS).
And next to each risk, note what you actually do:
- monthly bank reconciliations;
- credit limits / prepayments;
- expense policy and approvals;
- solid contract documentation.
Events after the reporting date
If something material happened after the balance sheet date (a major contract, cessation of activity, funding raised, a significant dispute), record it.
Plan for the next year (2–5 bullets)
Your plan should be measurable:
- “expand into market X”, “launch product Y”, “reduce CAC”, “introduce automation”.
How to make it sound “expert” (not “marketing”)
- use facts and causes, not slogans;
- avoid unsupported superlatives (“best”, “unique”);
- write as if a bank is reading: what happened, what it means, what you control.
Common mistakes
- no causes (only “everything is fine”);
- no risks or control measures;
- events after the balance sheet date are forgotten;
- the text contradicts the numbers (e.g., “expenses decreased” but they increased in the P&L).
Mini templates (copy/paste friendly)
Revenue dynamics: “Revenue increased/decreased due to … (customers/market/pricing). The main contribution came from …”
Expenses: “Expenses increased because of … (payroll/contractors/marketing). We took measures such as … (limits/tendering/optimization).”
Risks: “The key risk is …; likelihood is …; control measures are … (procedures/policies/reconciliations).”
Events after the balance sheet date: “After the reporting date, … happened, which may affect …”
Checklist before filing
- 1–2 paragraphs on “who we are” (no marketing).
- 3–7 facts/events that truly affect finances.
- 2–3 reasons behind changes in revenue and expenses.
- 3–5 risks plus concrete control measures.
- A separate point on events after the balance sheet date (even if “none”).
- A measurable plan for next year.
See also on blog.accres.eu
How we can help
If you want to close this quickly and avoid refiling: we can verify the numbers, prepare and submit the report in e‑Äriregister, advise on documentation and take it all the way to filing. Contact us.
Industry prompts (so you don’t have to guess)
SaaS/IT: dependency on a single sales channel, customer churn, data security, FX settlements; controls: clear subscription rules, backups, service level agreements (SLA), receivables monitoring.
Consulting/services: dependency on utilization and key specialists; controls: contracts, transparent pricing, capacity planning.
Trading: inventory and returns risk, FX differences, supplier payables; controls: stocktakes, limits, payment terms.
Why it matters for banks: banks don’t look at profit only—they look at resilience: how you manage risks and what happens next. A strong management report can save you from repeating the same explanations in emails.
Can you include numbers? Yes, but only as support (1–2 key KPIs), not by rewriting the statements. For example: “revenue +25%”, “exports share 40%”, “receivables decreased”.
Before filing, simply cross-check the text against the P&L: if a statement is not supported by the numbers, remove it or clarify.
FAQ
Do we need to write it if there was no activity?
If the year was “zero activity” and there were no material events, a very short explanation is usually enough. But if equity is problematic, there were disputed transactions, or there were important events, 3–5 sentences can save you a lot of back-and-forth later.
Can the text be written in English?
For the registry, what matters is correct submission according to e‑Äriregister rules; an English version is usually informational. If you need it for an investor or a bank, translate after the numbers are finalized and keep terminology consistent.