small business Notch Above Bookkeeping Brisbane

The importance of financial transparency

Financial transparency is important to investors

When pitching a business to investors, getting the right number – whether it’s net profit, sales, margins – is key. 

But the kind of data you present depends a lot on the stage of your startup and the kind of investor you’re looking at. 

As an investor himself, Sam had this advice to give: “If we’re talking about seed [funding], they’ll be investing more in the team, personality, vision, and market-depending on the stage.” 

He goes on to advise small and medium enterprise that “annual finances are useless in the beginning because business is changing so frequently. Investors will want to see on a month-on-month basis what’s happening.”

Mature startups appealing to investors who have part-ownership of the business is a different story. 

Investors typically want financial transparency to understand the health of the business. Like Sam, they usually ask for a monthly update using consistent growth metrics. But it’s a bonus if the investors are aware of what’s happening in the business’ bank accounts as well. 

A business could have sold to a client and earned $200,000, for example, but they might not be receiving the payment another 90 days. This kind of information helps everyone involved make better decisions. 

Tools like Xero are extremely useful in this case because it provides real-time insight into a business’ cash flow. Especially since cash flow management is one of the top issues for small and medium businesses, this sort of transparency is essential to grow and scale.

By making bookkeeping easy, we empower business owners to focus on scaling and doing meaningful business. Call Notch Above Bookkeeping in Brisbane on 07 3355 6427 today.

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Author Info

Notch Above

We love to put energy and passion back into life by taking away the bookwork drag. With the help of smart systemised bookkeeping systems life can become easier. Notch Above Bookkeeping was founded in 2006 after Jac Gallagher saw the need for small businesses to have access to accurately prepared and up to date financials, enabling owners to make informed financial decisions on their business in a timely manner. Notch Above is a Xero Platinum Partner based in Brisbane QLD servicing business owners and accounting businesses.

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