News & Press

Seeking outside investment? 6 steps to prep your financial records

January 3, 2024

For many business owners, raising outside investment is a critical milestone in their entrepreneurial journeys. However, before courting potential investors, it’s essential to know what they’ll be looking for (and at) in your financial and accounting records. If a business owner isn’t prepared to share comprehensive and accurate financial information or doesn’t have their “essential numbers” at their fingertips, investors won’t have the data they need to make an informed decision and are highly likely to pass on investing.

Getting your financial and accounting records in order is a preliminary step in seeking outside investment that can’t be skipped. Knowing what investors want and expect to see can help entrepreneurs focus their efforts.

2. Classify expenses and note taxes.

In addition to having clean books and records, we recommend correctly classifying expenses, measuring the business in several ways (for example, by channel, customer, gross margin and net sales), and noting sales tax and other exposures. Deals and raises have been delayed, and less favorable terms have been offered to founders, in cases of misrepresented financials and/or overlooked taxes. Leverage tax advisors to anticipate and circumvent issues. – Kathleen Braica, Anchin

Excerpted from the original article published by South Florida Business Journal.