How often should I update my financial statements for investors?

You should update your financial statements at least quarterly. However, if you're in the process of seeking investment, it's best to have monthly updates available.

Can I prepare financial statements myself?

Yes, but it’s advisable to use accounting software or hire an accountant to ensure accuracy and save time, especially as your business grows.

What’s the difference between a profit and loss statement and a balance sheet?

A P&L statement shows your business's revenue and expenses over a period of time, while a balance sheet shows your assets, liabilities, and equity at a specific point in time.

How can I make my financial statements more appealing to investors?

Use clear and concise language, include comparisons to previous periods, and explain any unusual expenses or revenue spikes.

What’s the most important financial statement for investors?

All three—P&L, balance sheet, and cash flow—are important. However, investors often prioritize the cash flow statement to understand your ability to generate liquidity.