Good Investor Relations and Bookkeeping

Written by Amanda Bower    |    Published: August 23, 2022

Sign up for our newsletter to receive everything from accounting advice to notifications on new tax laws.

investor relations

If you’re running a successful startup or new business, it likely means that you have investors on your mind. Whether you already have investors on board as part of your business, or you’re in the beginning stages of working with them, investors can make a big difference in what you can accomplish as a business. In order to keep your investors engaged and happy, and to win over new investors, you’ll need to ensure you’re maintaining excellent investor relations.

The best way to do that? With proper bookkeeping and financial reporting.

Think of it this way: when an investor chooses to put their dollars and faith in your business, it’s based on only a few things, including how leadership is perceived, and how the business presents itself. But the biggest factor in investor confidence? The actual financial health of the business.

The paradox is that financial health can be difficult to demonstrate, especially for a new and growing company, where things change rapidly month after month. But by following excellent bookkeeping practices, keeping great financial records, and using top-tier accounting systems, you’ll have plenty of ways to demonstrate your financial credibility to your investors.

When Do Investor Relations Come into Play?

Investors can come in all shapes and sizes, depending on your business. Mom and dad might be some of your initial investors, or other family members. On the other hand, you might also have angel investors, venture capital funds, or some type of private funds, such as loans. But when exactly do investor relations come into play in your business?

Investor relations actually come into play before you even decide that you want to bring on investors to your business, and they never really stop. Once you decide to bring on investors, you need to ensure you have an airtight business case to showcase why they should invest from the beginning. This includes having excellent financial records and bookkeeping.

After they’re on board, there is an ongoing need to maintain excellent investor relations, so that they have continued faith in your company and leadership, and that things continue on smoothly. As you might have guessed, one of the best ways to then maintain great investor relations is to demonstrate your financial status through your bookkeeping and accounting. That’s because the documents and processes involved in your bookkeeping and accounting are the physical proof of your financial status as a business, and are concrete facts that your investors can rely on. This is the non-disputable evidence of the progress your business is making, and where investor dollars are making a difference.

The Importance of Good Bookkeeping for Your Investors:

There are several different aspects of proper bookkeeping practices, which are important for investors working with your business. Here are some of the main categories you should consider:

Detailed and Up-to-Date Records

When your business was first forming, you might have relied on haphazard spreadsheets and handwritten notes. But with your fully-fledged business, this sort of shoddy record keeping isn’t going to get you very far when it comes to investor relations. In order to keep investors confident and engaged, you’ll need to keep detailed and up-to-date records on everything that happens at your business.

This will vary from business to business, but could include invoices, forms, receipts, deposits (including cash), purchases, expenses and assets. If it involves money, purchasing, or selling, you should definitely be keeping detailed and orderly records of it. Not only that, but your records should be easy to navigate and digitized in a reputable software that is managed by someone knowledgeable in the space. If you have a small business CPA, this might already be in order, but if not, it’s up to leadership to ensure that records are top-tier.

Reliable Financials

“Financials” refers to business financials, which are specific reports that demonstrate the financial positioning of your company. There are several types of financials you should be keeping, including the cash-flow statement, income statement and balance sheet. Other common types of financials include note to financial statements, and statements of change in equity.

Altogether, these financials give both you and investors a thorough understanding of the state of your business. It’s important to note that these different reports describe different aspects of your business’ finances, so they’re all needed in conjunction, in order to get the full picture. It’s not enough to keep one report rock solid, while letting the others slip through the cracks.

Key KPIs and Metrics

KPIs, or Key Performance Indicators, are measurements which help gauge the state and progress of your company. KPIs and metrics are forms of data, which is crucial for your company to understand, but also for preserving investor relations. Common KPIs that your business might be measuring fall into different categories, including financial metrics, customer metrics, and performance metrics.


As startup founders and other new business leaders will come to discover, compliance is serious business. There is plenty of financial compliance that businesses need to keep up with, including ordinances, acts, laws, and other decrees that dictate the way businesses operate. Keeping up with compliance needs is not only crucial to governing bodies, it’s also critical for full investor confidence. Businesses need to have airtight operations to maintain excellent investor relations.

There are plenty of different types of compliance that are of interest to investors, such as compliance that impacts finances. This can include labor laws (for example, the FLSA establishes the right to overtime pay), payroll, and PTO. There are also specific financial compliance regulations and laws that govern finances, along with unethical and illegal financial practices.


Excellent bookkeeping practices means double and triple checking not only your work, but the work and records of those you’re working with. For example, when it comes to bank accounts, it’s always worth double-checking your books by comparing them to the bank’s records. The same goes for your credit cards. It’s crucial to comb through credit card statements to ensure they’re recorded properly. When you’re cross-checking your bank and credit card records, you’re not only ensuring accuracy, but also showing investors how thorough your financial record keeping really is.

How Does an Investor Use Your Financials?

When it comes to putting your financials to work, investors don’t simply glance over them and move on. There are specific ways that investors use your financials. Here are some of the most common ways.

Investment Analysis

Investment analysis is a very broad term. The goal of it is for investors to gauge the health of an investment and to understand the value of it. Think about it like this: investors want to understand how exactly their investment will perform, and what the future of their investment looks like. The process of investment analysis takes into account factors such as the economy, past business performance, and financial forecasting. And of course, investors will use your financials to conduct their investment analysis. The more accurate and comprehensive your data is, the more thoroughly and accurately investors will be able to conduct their analysis without having to guess the data points.

Learning How a Company Finances Its Operations

Financials can be majorly beneficial for investor relations for one big reason: they help demystify how your company finances its operations. While you might first pique the interest of investors with neat websites, flashy pitch decks, and charming business dinners, there’s going to come a point when you need to pull back the curtain. Investors want to know what’s happening inside your company so they can invest with full confidence. The most concrete way of providing that confidence is with accurate and complete updated financials.

Mitigates Risk

When there is clarity and transparency around your financials and bookkeeping, investors are able to make the smartest investments possible, therefore mitigating risk. It’s safe to say that everyone wants your company to win, including your investors. When they have a complete picture of your financials, they’re able to make the wisest investment decisions, therefore reducing decisions that might not pan out.

Maximizes Income

When investors have the complete picture of your financials and bookkeeping, they’re not only able to minimize risk, but they’re also able to maximize income. Investors can look at the records and status of your business, and make thoughtful and strategic decisions which ensure the maximum return on their investment.

Your Investors Want to See Good Bookkeeping

No matter how strong your business is, nothing can build and maintain investor relations quite like good bookkeeping. With excellent financials and bookkeeping, the proof is in the pudding, and investors can easily understand everything they need to know about your company, to make the best investment decisions possible.

But we get it: good bookkeeping is complex, multi-faceted, and time consuming. That’s why we’re here to help. As a leader, you should be running on all cylinders towards business growth, not slowing yourself down with shoring up your bookkeeping.

Ready to take your bookkeeping to the next level? Find out more about our bookkeeping services here.

Read Similar Articles

A person carrying a box of supplies.


501c3 Accounting: Hiline Can Help With That

A small business owner and employee


What to Expect from Bookkeeping Services for Owner / Operators

A man working at a computer wearing a red plaid shirt.


What to Include in a Startup Investor Report