Cash Management: Connecting Investor Relations, Bookkeeping, and Filings

Effective cash management and maintaining a strong governance structure are essential for financial stability, regulatory compliance, and long-term success of your business. To ensure smooth operations, focus on three core areas: investor relations, bookkeeping, and staying up to date on filings. An effective investor relations process is critical for building trust with limited partners (LPs), allowing stakeholders to stay informed and aligned with your goals while securing the necessary cash to execute the mandates of your business. Bookkeeping, expense tracking, and vendor management provide the financial foundation for daily operations, ensuring accurate records and preparedness for audits . Filing compliance with state and federal entities preserve your legal standing and credibility, helping to mitigate potential liabilities and fines.

Having a clear handle on your cash position facilitates planning for your business activities that include capital calls, distributions, operational expenses, filing fees and taxes. This article will outline the key components of these processes.

1. Investor Relations?

Why It Matters:

Investor relations and management of capital calls and funding, ensures that your business has the necessary liquidity at critical times. This prevents disruptions in operations and allows you to capitalize on investment opportunities promptly. Regular and clear communication about capital calls and funding processes keeps investors informed and engaged. Critically, planning the timing of capital calls in advance helps minimize disruptions to investors’ needs while managing your internal rate of return (IRR). Be mindful of the specific goals of your investors and aim to align with their cash management protocols when scheduling capital calls.

Elements May Include:

• Manage capital call process

— Send capital contribution notices?

— Track investor payments

— Send reminder notices?

— Reconcile incoming wires

• Manage cash distribution process

— Prepare distribution calculation by investor?

— Prepare and send distribution notices to investors

— Obtain and maintain investor banking information

— Wire cash distributions to investors

• Manage investment funding process

— Obtain draft documentation and review for pertinent data points

— Collect and record underlying portfolio company data

— Set up investment funding wire(s) for approval?

— Obtain executed purchase documentation

• Manage stock distribution process

— Prepare distribution calculation by investor

— Prepare and send distribution notices to investors

— Obtain and maintain investor brokerage information

— Work with external brokerage firm to facilitate stock distribution process

• Maintain investor contact preferences, which can be done within your accountant’s investor portal or proprietary software such as a Customer Relationship Management (CRM) system
• Obtain and store formation documentation, including formation certificates, legal agreements, and individual investor subscription agreements?
• Maintain secure investor portal, including posting limited partnership agreement (LPA), financial statements, capital call history, capital account history, and tax documents
• Address investor requests, including audit confirmations, data requests, and other accounting or operations questions?
• Work with external tax team to understand the implications of realized events, tax distributions, stock distributions, discretionary distributions?

CRM Examples:?

• Affinity
• Airtable
• HubSpot
• Google Sheets
• Pipedrive
• Dynamo

Investor Portal, Document Sharing, and Data Room Examples:?

• Anduin
• DocSend
• iDeals
• Intralinks
• Notion
• ShareVault
• Slideshare
• WeTransfer

2. Bookkeeping, Expense Tracking, and Vendor Management?

Why It Matters:

Management of your books, expenses, and vendor relationships helps streamline operations. By monitoring and managing expenses, you can identify cost-saving opportunities, optimize cash flow, and improve financial performance, allowing you to control costs, track your deductible tax liabilities, and improve profitability. Importantly, a good bookkeeping partner will help you run your operations in a way that will optimize your year-end tax position.

Elements May Include:

• Maintain accounting books and records
• Manage payment of entity and expenses
• Organize and process accounts payable and accounts receivable?
• Know what is tax deductible
• Prepare balance sheet, income statement, and detailed general ledger for review monthly
• Facilitate credit card expense reporting and cash reimbursement using an expense management system
• Administer employee payroll, input benefits deductions, and expense reimbursements (HR, compensation, and benefit selection are typically discretionary)
• Manage day-to-day banking relationships, including capital call lines of credit, line of credit drawdowns, payments, and compliance certificates if applicable
• Establish connections with experienced vendors, including banking, brokerage, audit, tax, compliance, and insurance providers

Expense Management, Payroll Management, and Task Management Examples:?

• Gusto
• QuickBooks
• Asana
• Expensify
• Trello

Bookkeeper Examples:?

• Fife Avenue Partners
• Greenough Group
• Bookkeeper360
• Realize CPA

3. State & Federal Business Filings?

Why It Matters:

Timely filings maintain your business’ structure as well as its legal standing, ensuring it remains a recognized and legitimate entity capable of conducting business, entering into contracts, and making investments. Note that state and federal filings can impact tax obligations and benefits as well.?

Elements May Include:

State Filings - Examples in California:?

• Secretary of State Filings:

— Articles of Incorporation: For corporations to be legally recognized in California.

— Articles of Organization: For forming a limited liability company (LLC).

— Statement of Information: An annual or biannual filing that updates the Secretary of State with key information about the business.

• Franchise Tax Board (FTB) Filings:

— California State Tax Return: Annual tax return for businesses operating in California.

— Estimated Tax Payments: Quarterly tax payments based on expected income.

• Payroll & Employment Development Department (EDD) Filings:

— Employer Registration: Businesses must register with the EDD for state payroll taxes.

— Quarterly Payroll Tax Returns: Reporting of wages paid and payroll taxes withheld.

• Board of Equalization (BOE) Filings:

— Sales and Use Tax Returns: For businesses that sell tangible goods in California.

Federal?Filings

• Internal Revenue Service (IRS) Filings:

— Federal Tax Return: Annual tax return for businesses (e.g., Form 1120 for corporations, Form 1065 for partnerships).

— Estimated Tax Payments: Quarterly federal tax payments based on expected income.

— Employment Tax Returns: Quarterly reporting of payroll taxes (e.g., Form 941).

• Securities and Exchange Commission (SEC) Filings:

— Form D: For private placements and securities offerings to comply with Regulation D.

— Form ADV: Registration form for investment advisors.

— Form PF: For private fund advisors to report information about the private funds they manage.

• Financial Crimes Enforcement Network (FinCEN) Filings:

— Form 114 (FBAR): Report of Foreign Bank and Financial Accounts for entities with foreign accounts exceeding certain thresholds.

• Other Relevant Federal Agencies:

— FATCA (Foreign Account Tax Compliance Act) Filings: For entities with foreign financial accounts.

SPV Filings?

• Similar to the above (to be done for each SPV)

Effective cash management ensures the accuracy of your financial statements while preventing liquidity issues that could disrupt business activities. By maintaining proper cash flow and business structure, you enable informed decisions regarding contributions, distributions, fees, taxes, and filings. These processes help sustain transparency, investor trust, and audit readiness.

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Sincere appreciation to our contributor Linda Maduwura , founder of Fife Avenue Partners, an accounting, CFO, and back office solution for venture capital and high net worth individuals; written along with Shea Tate-Di Donna and Kaego Ogbechie Rust, authors of The Venture Fund Blueprint .

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Disclaimer: The providers, companies, examples, products, and services shared represent only a subset of available options and are based solely on internal fund manager conversations. These options are intended to be a general framework, not an exhaustive catalog, and should not be viewed as legal or tax advice, endorsements, recommendations, approvals, or rankings. We encourage you to do additional research into each category to find the resources that best fit your specific needs.

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Kaego Ogbechie Rust is CEO at Foresight Advisors — working with foundations, investment firms, non-profits, and for-profit ventures — offering comprehensive support across vision & strategy, investing & financing, and operational planning during critical periods of your growth. If you’re looking for help, contact [email protected] or visit www.foresightadvisors.com .

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