Investor Reporting & Management Information

16 July 2021 Gary Moorhouse View all News

As the people backing a business financially, the importance of investors cannot be understated. They are one of the pillars of a business, especially in its early years. It is therefore the duty of business leadership to ensure they are kept happy with the progress that is being made.

Investor reporting is at the very core of this. Strong investor reporting means happier investors; happy investors mean greater backing for your business and ideas for future growth.

So how can robust management information help keep your investors happy?

Regular, accurate and relevant reporting

More than anything else, investors want to understand business performance. This can vary, some may wish for simple, top line numbers, while others will want to see a much more detailed view of the business that they have invested in.

It is important to understand what your investors expect, and to deliver on that. Regular reports are key, explaining where their investment has gone and what the return on that investment has been.

It is equally important to ensure your reports contain the most relevant information. This extends beyond top-line performance. Knowing your investors, and which areas they are most interested in, will help you craft management reports that keep them engaged and, ultimately, invested in your business activities.

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Understand which data matters the most

Business data can be an unwieldy beast – a growing company might have countless moving parts that is simply not possible to report on at the same time.

Your KPIs (key performance indicators) must be set in place and aligned with the expectations of your investors, as these are the lines that they will measure performance against.

Your KPIs must be manageable and easy to understand; it is not abnormal for your business KPIs to evolve and change over time, but it is important to keep the number of measures stable. Too much information can be a bad thing.

Avoid vanity metrics

Vanity metrics are measurements which look good on the surface but ultimately contribute little to the bigger picture of your business performance.

It’s always nice to see graphs pointing in the right direction, or metrics turning green on a dashboard, but you must always consider the importance or relevance of it.

Expect to be asked how a metric fits into the bigger picture – if it doesn’t fit, then it likely isn’t important enough to include in an investor report.

Share both good and bad news

When reporting to investors, it’s always preferable to be delivering good news; however, this isn’t always possible. Business environments change and strong periods can be followed by weaker periods.

Investors understand that businesses can go through phases and will welcome an objective, honest assessment of things. Attempting to conceal bad news could damage the trust between your investors and yourselves, which certainly isn’t good for a long-term relationship.

Communicate challenges clearly

Businesses encounter challenges all the time; some of these are unprecedented in their scope, such as the COVID-19 pandemic, others may be much shorter in time frame, but no less significant. It is extremely important that these challenges, especially the short and medium-term ones, are clearly communicated with your investors.

Whether these challenges involve supply chain changes, market conditions shifting, upcoming changes in senior staff or completely unforeseen events external to the business, transparency and measured risk management will give your investors confidence that you are in control.

This also gives you an opportunity to solidify investor confidence and provide assurances, supported by management information, forecasts and more data, that there is a clear plan in place to tackle these challenges.

Reinforce long-term goals

All investors have long-term goals – these will often have been outlined at the beginning of your business relationship with them. Their confidence in their investment will be predicated on how satisfied they are that their long-term goals are going to be met.

Your investor report KPIs should therefore link back to these core investor goals wherever possible – this will serve as a regular reminder that your goals are aligned and improve their confidence.

Utilise the best software

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The right software can turn several pages of dry data into attractive, useful, and (most of all) actionable insights that are easy to digest in the boardroom. Whether this is creating interactive dashboards or automatically taking care of forecast calculations, software is your friend.

One such example is Xero, a cloud-based platform which offers you the opportunity to see how your business is performing throughout the year, helping you capitalise on opportunities, plan better, and ultimately make your business more successful.

Do you need assistance with Investor Reports?

Genus is a combination of well-developed technology, and smart human intervention, designed to give you and your investors a meaningful view of your business.

Whatever the nature of your business, and whatever relationship you have with your investors, the Genus team of specialists produce reconciled and detailed management accounts, which enable you to monitor business performance, and offer comfort to any investors you may have.

Speak to our team today if you need assistance.

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