What challenges are faced after private equity funding?

 

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Have you ever approached an investor for funding? If you did, then you know how challenging it can be to provide the relevant, insightful, and timely information to your investors.

The challenges of providing financial information

Failing to provide accurate and timely financial information can happen due to a variety of reasons:

  • An underperforming finance team
  • High turnover in the finance department
  • Shortage of high-quality finance staff
  • Lack of proper internal controls or process scalability
  • Lack of sound financial data
  • Limiting and disparate systems
  • Difficulties measuring and analyzing the gathered data

The diversity of financial reporting

No, financial statements can’t fit into a single mold as there is no one-size-fits-all approach. Every business is unique, and the variety of activities always results in different financial statement presentations. On the other hand, less-experienced investors expect to encounter a presentation that fits inside the mold of a “typical company.” The cash flow statement, income statement, and balance sheet are less susceptible to this phenomenon.

CEOs and CFOs need an experienced “right hand” and thought partner who knows the needs and requirements of their company as well as what kind of financial reports they need to approach investors.

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Financial reports

A company’s financial statements (income statement and balance sheet) are essential components of any financial report. They present your company’s performance results, and you are required to file financial reports with the SEC (Securities and Exchange Commission.) The reports can be quarterly and annual.

A lot can be learned from your annual financial report. For example, what products or services do you sell and how does your company see itself. It also describes recent regulatory changes, leadership changes, accomplishments, risk factors, and other changes that affect the company. Potential investors also want to know if there are any risks or threats to your earning a profit, and financial reports also describe a company’s weaknesses and downsides.

Income statement

A financial statement that describes your company’s financial performance over a given accounting period is called an income statement. Financial performance is analyzed and assessed through the summary of how the company incurs revenues and expenses through operating and non-operating activities.

The income statement provides information about monthly, quarterly, and yearly performance, beginning with sales and breaking down the earnings per share and net income.

Income statement has two parts, operating and non-operating. The operating section of the income statement presents information about incomes and expenses that result from your business operations (the sales of products or services.) The non-operating part presents income and expense data that are indirectly tied to your company’s operations.

Balance sheet

The second part of a financial report is the balance sheet. It reports your company’s liabilities, assets, and shareholders’ equity at a given point in time. When evaluating your company’s capital structure and computing rates of return, your balance sheet provides a basis. What does your company own and owe? Your balance sheet will give a snapshot.

In the balance sheet, there are assets on one side and liabilities with shareholders’ equity on the other side of the equation. Shareholders’ equity, liabilities, and assets are each comprised of a few smaller accounts that explain the details of your company’s finances. Due to the industry and the nature of the business, these accounts can vary widely.

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What is behind the numbers?

A CEO of a company uses financial reports to improve decision-making and strategic planning. When approaching investors, the financial report reflects your company’s business.

The financial indicators and numbers derived from these numbers must be understood before crunching numbers. So, it’s imperative to understand what the company does, the industry in which it operates, and its products or services.

One of the main reasons you should know how to read your financial statements is that you can calculate your financial ratios. Financial ratios show the state of your company – how it is doing, whether it’s profitable, and whether it is taking on too much debt.

Consero Global can help

For over ten years, we have been blending the best technology, processes, and professional staff to provide our clients the enterprise level financial controls and visibility they need. And all that at a fraction of both the time and cost required to set up and manage an entire internal finance infrastructure and team.

By combining bookkeeping, controller, and CFO services with SIMPL (an integrated managed platform) and proven processes, we can provide world-class finance and accounting capabilities. What we bring to the table are proven systems and methods that can apply to all companies. However, with an understanding that every company is unique, we can customize our solution according to your needs and around your existing department structure.

Our SIMPL platform functions as a cloud-based financial command center, and it delivers financial clarity through an easy-to-use, intuitive interface. As a client, you get a dashboard view of your company performance as well as the ability to approve bills and invoice your customers. With everything in one place. SIMPL also scales with you, whether you’re a CEO or a CFO, to meet the increasing needs of your growing company.

With Consero Global as your “right hand,” you will get:

  • Timely and more robust information for better financial visibility
  • Increased efficiency & scalability
  • Significant time & cost savings
  • Genuine comfort & confidence

Also, we will help you formulate the right financial reports for your investors as well as to understand the numbers behind them before you crunch them.

Whether you’re a CEO, a CFO, or an investor – you need to know how to read, analyze, interpret, or create your financial reports. The three primary financial statements (prepared with the accounting data collected over time) are income statement, cash flow statement, and balance sheet. Each one of these statements shows your company’s financial pulse but in different areas. If you are not savvy with the finance or need to focus on other critical aspects of your growing company, you should consider outsourcing for finance and accounting assistance from Consero Global. We will help you to make the most of your recent funding.

 


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