Being a first-time special purpose vehicle (SPV) manager has a learning curve. There are some things to know about preparing and distributing financials to investors. Take time to learn the laws and regulations that apply to provide proper financial statements. By following a set of best practices, you can ensure that the process goes smoothly. There are several common pitfalls managers face when issuing SPV financials. Some of these include:
- Not understanding the need for accurate financial statements
- Not making sure that the information is easily understandable for investors
- Not ensuring financial statements are up to date
- Not understanding the legal requirements for financial disclosures
- Not properly budgeting and managing resources.
Prepare your financial statements
Use the financial information you’ve collected to prepare your financial statements. This includins a balance sheet, income statement, and cash flow statement. Make sure that your statements are clear, concise, and easy to understand.
Provide detailed explanations and footnotes
Investors will want to understand the details behind your financial statements. Be prepared to provide detailed explanations of any significant transactions or changes. Use footnotes and other explanatory materials to provide more information, as needed.
Include all necessary disclosures and compliance documentation
Make sure that your financials are in compliance with the relevant regulations, and include all necessary disclosures. These may include disclosures of risk factors, related-party transactions, and other important information.
Use a professional format
Present your financials in a professional format, with consistent formatting, headings, and layout.
Communicate with your investors
Tell your investors when they will receive the financial statements. Once prepared, you can typically send financials via email. You may also want to provide the option of downloading the financials from your website.
Make sure your financials are easily accessible
It’s important to make your financials easily accessible to your investors. Send them to them in a format that they can easily open and view, such as a PDF.
Keep your investors informed
Regularly update your investors on the financial performance of the SPV. Provide them with any other relevant information they need to make informed decisions. This could include reports on cash flow and other key performance indicators.