Tools for Tracking Your Company’s Finances After Investment

You and your investors post-investment:

CONGRATULATIONS! YOU’VE RAISED FUNDING! Your ideas and efforts over the last few years have been recognised by an investor. Now that the celebrations are over, the work starts in delivering on your promises and keeping your investors informed with post-investment financial reporting.

Once investors have made the decision to invest in your company, their focus shifts from evaluating the potential of your business to monitoring its progress and seeking returns on their investment. At the post-investment stage, your stakeholders are looking for transparency, clear communication, and evidence of value creation to maximize the value of their investment and build a long-term partnership with your company. The best way to keep them up to date and happy with your progress is with regular, accurate and transparent financial reporting. What investors look for in these statements post-investment differs from industry to industry, and it pays to consult the experts when setting up the financial reporting process.

These financial statements are crucial tools and provide you (and investors) with all the information needed to understand where your company stands in terms of revenue, expenses, cash flow, runway, debt level and more. These reports can then be used as a starting point for you and your investor to make important decisions by analyzing trends, making cash flow projections, and gauging your success in your operational field.

How tracking your finances can benefit your business

Let’s delve deeper into six proven benefits of tracking your finances post-investment.

  1. Performance Evaluation: Tracking finances allows your investors to assess the performance of their investments. By monitoring the returns, growth, and profitability of their investments, investors can determine whether their decisions were successful or need adjustments. It provides insights into which investments are performing well and which ones may require attention or modification.


  2. Risk Management: By regularly reviewing financial statements, cash flows, and market trends, you and your investors can spot potential risks or warning signs early on. This enables you to take appropriate action.


  3. Decision Making: Accurate financial tracking helps you evaluate investment opportunities, compare different options, and determine the best course of action based on your financial goals and risk tolerance.


  4. Tax Planning and Compliance: Tracking finances post-investment is essential for tax planning and compliance purposes. By keeping track of company finances, you can ensure proper tax calculations, identify eligible deductions, and meet reporting obligations, thus minimizing the risk of errors, penalties, or audits. If you struggle to manage your tax obligations in-house, talk to an expert service provider like OCFO.


  5. Transparency and Accountability: Financial tracking promotes transparency and accountability in investment activities. It allows investors to maintain a clear record of their investment decisions, transactions, and results. This transparency is especially important for individuals managing investments on behalf of others, such as fund managers or financial advisors, who need to provide accurate reports and demonstrate accountability to their clients.


  6. Learning and Improvement: Tracking finances post-investment provides valuable learning insights. By analyzing financial performance, you and your investors can identify patterns, pitfalls and areas for improvement.

All in all, there are no downsides to tracking your finances. Whether your reports are positive or negative, they provide you with the opportunity to analyze your current position and make the necessary changes for improvement in order to keep your investor happy. Knowledge is power, as the saying goes.

Accounting software

Modern cloud-based accounting software, such as Xero which we recommend, can significantly benefit your business in a number of ways.

  • Firstly, it streamlines financial processes by automating tasks such as invoicing, expense tracking, and payroll management – saving you and your staff time and cutting down on unforced errors.

  • Modern software also allows you access to accurate and up-to-date financial information, as and when you need it,  allowing you to make informed decisions based on real-time data. With easy access to financial reports, cash flow statements, and balance sheets, you can monitor the health of your business, identify trends, and target areas for improvement on the go.

  • Accounting software also simplifies tax compliance by generating accurate tax calculations, organizing records, and facilitating the preparation of tax returns. This ensures that you meet your tax obligations and avoid costly penalties.

Modern, cloud-based accounting software packages such as Xero are indispensable tools for today’s on-the-go businesspeople and their remote teams.

OCFO post-investment support

It is important to contact your investor soon after you have received their investment to build early momentum and gain an understanding of what type of reporting they require. This proactiveness can save you from unnecessary costs at a later stage and will help start your relationship with the investor on a positive note.

Many founders do their own bookkeeping when starting out, but as you scale your company, your time becomes stretched in several directions. Eventually, you need someone to take over to ensure everything you’re handing to investors is accurate while you use your talent on other parts of the business. The team at Outsourced CFO can provide you with the following assistance on your post-investment financial journey:

  • Setting and keeping a budget
  • Cash flow forecasting
  • Key performance indicators (KPIs) and what they can tell you about the business
  • Directors’ Meetings
  • Implementing financial checks and controls

Read more about these services here, then contact us to set up a meeting. Let’s make your post-investment financial journey a successful one.

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