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End-of-year checklist for startups

EOY checklist preview
EOY checklist preview

End-of-year checklist for startups



Austin Carroll

Austin Carroll is the Senior Product Marketing Manager, Financial Services at Brex. Prior to joining Brex, she obtained her MBA from Duke University and has built extensive expertise on the financial needs of early-stage startups from her past work at Techstars, Capital One, and Mercury.

Prepare to look back and plan ahead.

As the year draws to a close, the reality for startup founders has started to sink in – it's time to end what was a challenging year on a high note. While the rest of the world gears up for holiday parties and vacations, founders must shift their focus to guarantee that their businesses are positioned for success and survival in the upcoming year.

Check out our "2023 year in review" article to learn more about the current environment for startups  

At Brex, we’re committed to helping you get the most out of your end of year, whether you're navigating your first year-end or are a seasoned entrepreneur. With over five years of serving startups, we’ve observed the top practices among successful founders during this pivotal year-end period and have compiled a checklist to ensure your year-end is just as successful.

Take some time to reflect

  • Conduct an annual post-mortem

Before setting up your out-of-office for the holiday season, take time to schedule an annual post-mortem and evaluate your company's achievements and setbacks over the past year. What worked well? What could have been done better? Engage your management team, trusted advisors, and, where possible, the entire company in planning for the meeting. We also recommend presenting the findings to the board and the whole company to foster a culture of transparency and learning to set the stage for the new year.

  • Analyze your runway

At the end of the year, it’s important to take an in-depth look at your company’s performance and spending. How much recurring revenue have you generated? What are your customer margins, and how much did it cost to acquire them? What was your total credit card spend? Brex customers can quickly gather this information using their Brex dashboard and reporting tools.

  • Create a financial plan for next year

Then, use these insights to inform your financial plan for the upcoming year, covering headcount, sales, and a forecast for your out-of-cash date. We also recommend forecasting your broad categories of spend, including upcoming employee travel, vendor commitments, and recurring expenses. You’ll also want to update your options pool plan to ensure you have enough stock options for hiring, retaining, and rewarding employees.

Discover cash management best practices for startups 
  • Send year-end updates to investors

Rather than sending traditional holiday cards or gift baskets, offer your investors a meaningful present this holiday season by sharing a comprehensive year-end update and future outlook. Keeping investors informed about company progress, achievements, and upcoming plans not only promotes transparency but also nurtures a robust relationship between investors and founders whether or not you plan to raise again next year.

Get your startup’s finances in order

  • Review your recurring payments

Dedicate some time to review service contracts and subscriptions that may be up for renewal. Brex customers can take advantage of Spend Insights in their Task Inbox, which allows admins to easily identify merchants with a month-over month increase — a valuable feature for monitoring unforeseen cost escalations and redundant or multiple employee subscriptions. Cleaning up your recurring payments now will help you maintain your financial runway and better prepare for the upcoming year.

  • Get invoices paid

As the year draws to a close, you may find yourself with several outstanding payments from clients or customers. Before their holiday out-of-office replies start pouring in, take proactive steps to reissue invoices and send reminders.

If tracking the accounts receivable process starts to feel overwhelming, Brex business account users can utilize a new integrated invoicing tool to send invoices and receive payments directly to their accounts.

  • Prepare for tax season

It’s hard to believe it, but the impending tax season is already on the horizon. If you haven't done so already, consider engaging the services of a tax accountant to handle your startup's tax return. If bringing bookkeeping in-house isn't your current strategy, consider services like Pilot, which is seamlessly integrated with Brex and offers a dedicated team of expert accountants.

Your accountant will guide you through the necessary tasks to optimize your startup's financial situation before the year concludes. This typically involves compiling profit and loss statements, documenting expenses, and obtaining W-9 forms from consultants, freelancers, and paid advisors. For existing Brex customers, you can access detailed spend reports on card expenses and reimbursements right from your dashboard.

  • Close the books

The end of the year often means the end of the fiscal year for most companies. Close out your end-of-year books meticulously. If you've maintained up-to-date records or if you use Brex, this should be a relatively stress-free process. Ensure all expenses are captured for a comprehensive financial overview.

You also want to check that an audit is not on the horizon by viewing your Investor Rights Agreement for audit rights. Although not common among Seed to Series B investors, the last thing you want is to be caught off guard by an audit from your investor or financial institution in the new year.

  • Revisit your cash management

December is often a slower period for many startups, contrasting with the consistent flow of invoices and reimbursement requests in the early spring. We recommend taking the opportunity to scrutinize and re-evaluate existing banking partnerships and investments.

As an early-stage startup, you will likely have a core operating account with 90+ days of operating cash to process payroll, payments, and reimbursements. However, you’ll want to invest your excess cash in safe, liquid options like money market funds to earn yield.

Given the current high-interest environment, startups now have a plethora of treasury options. It's crucial to navigate these choices carefully, considering factors such as liquidity restrictions, timelines to transfer funds, and potential fees that could hurt earnings and tie up your company’s cash. Striking the right balance between yield and accessibility ensures that your excess cash not only generates returns but remains readily available to support the ever-changing needs of your growing startup. Brex business account offers you the ability to earn industry-leading yield on your operational cash, without losing any liquidity.

Prepare your team

  • Conduct employee evaluations

Whether you're managing a five-person team or overseeing a rapidly growing 200-person workforce, teams of all sizes could benefit from knowing how they could improve and make a bigger impact. That’s why it's crucial to dedicate time to facilitate employee evaluations. Whether you choose peer reviews, 360-degree evaluations, or management reviews, the evaluation process allows for comprehensive insights into individual and team performance. Additionally, annual reviews provide an opportunity to assess compensation, reward top performers, and address under-performers, fostering a culture of continuous improvement and accountability within the organization.

  • Align company goals

Leverage the power of the OKR (objectives and key results) model as a strategic framework to align your company effectively toward measurable goals. Begin by establishing clear objectives for the entire year, ensuring they are specific, achievable, and reflect the overarching vision of the organization. Break these objectives into smaller, actionable goals that can be easily understood and executed by teams across departments. By cascading these goals throughout the organization, you foster a sense of unity, ensuring that every team member contributes purposefully toward the shared vision, creating a synchronized and goal-oriented work environment.

  • Plan for healthcare enrollment

As the new year rapidly approaches, employees will also need to enroll in health insurance plans. If your early-stage startup doesn’t yet offer these benefits, your employees will need to purchase health insurance elsewhere during the open enrollment period. We recommend proactively guiding employees through the process to avoid missed deadlines. Want to offer benefits to your employees next year? Many payroll platforms like Gusto operate as brokers and make it easy to purchase employee health insurance plans for smaller teams.

Wishing you continued success!

Following this checklist can position your startup for a successful and well-prepared entry into the new year, whatever it brings. Amidst the holiday cheer, make the most of this time to set the stage for growth, efficiency, and continued success. We also recommend taking some time for relaxation over the holidays so you can come back refreshed and ready to hit the ground running in 2024.

Cheers to a prosperous new year for you and your startup — keep growing!


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