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Keeping Investors Invested Through Accurate Financial Statements

Author : Bill Gerber
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Aiming for accuracy in financial accounting isn’t something that companies do to please Uncle Sam and his IRS minions. Sure, there’s that. But what’s even more important about ensuring that your company’s financial statements are in perfect order also has to do with enticing investors. It’s this primary driving force, and the potentially massive gains that can result from an investor with a lot of capital to spread around, that’s got a lot of businesses turned on to the idea of preparing their financial statements online through outsourced accounting firms instead of by traditional in-house accountants. Here’s a quick rundown of the top three things that a potential investor will look for in your financial accounting statements.

 

· Potential for growth. Investors don’t buy into companies with their money just to be magnanimous or philanthropic. They do so to turn a profit. One of the clearest indicators that their investment in your company will pay off is shown on your income statement, which provides detail on the amount of profit your company is earning.

· Liabilities and debts. No company financial statements are going to reflect zero liabilities, but some businesses are in debt far deeper than is a comfortable risk to prospective investors. Your balance sheet shows a summary of all debts and can be the make or break point for an investor if it’s disproportionately lopsided.

· Cash flow. Income statements give an investor a peek into the kind of profit that a company makes, but the cash flow portion of financial statements indicates if that company is making enough money to pay for its expenses.

 

In order to attract the interest of investors, your first priority is to get your ducks in a row. Make sure that your financial statements are accurate and properly reflect the financial state of your company. If doing this with your current bookkeeping staff is looking more and more like a challenge they’re not up to, consider outsourcing your accounting needs. Doing so, you can also gain access to controller services that’ll deliver your financial statements online securely, accurately, and in a timely manner. Which is a lot more than many business owners can say about their existing arrangements.

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