Essential Financial Audits Every Startup Founder Should Prioritize in Q2 FY25
As a founder, you’re focused on growth. Your P&L might be expanding, and new markets are opening up. However, as your revenue grows and operations expand globally, your finances may still be operating in a local mode.
Welcome to Q2 — a critical mid-year checkpoint that separates reactive founders from proactive financial operators. Suppose you’re preparing for a funding round, tightening margins, or simply navigating global expansion. In that case, Q2 isn’t just another quarter — it’s an opportunity to audit, reset, and realign your financial strategy for scale.
This guide outlines the top six audits startup founders should not miss in Q2 FY25 to ensure your business is ready to scale sustainably, preserve cash, and stay compliant across markets.
Burn Rate & Runway Reality Check
Why it matters: What you see on a spreadsheet isn’t always what hits your bank account. Startup founders often miscalculate their runway by relying on top-line revenue, overlooking factors such as delayed receivables, foreign exchange losses, and complex revenue recognition rules like ASC 606.
What to audit in Q2:
- Is your burn rate calculated using real-time cash flow or forecasted revenue?
- Have you accounted for delayed customer payments?
- Are you factoring in international currency fluctuations?
- Is your revenue aligned with GAAP or IFRS standards?
Pro tip: Automate revenue recognition and integrate FX tracking into your financial reports. This audit can provide a more accurate view of how many months you have before you need to raise or pivot.
Expense Clean-Up: The Hidden Drain on Margins
Why it matters: From SaaS subscriptions and overlapping vendor tools to duplicate payments across currencies, expenses creep in quietly, but they add up fast. Inaccurate categorization, missed refunds, or expense duplication from multi-currency transactions can distort your profitability metrics and burn trust with investors.
What to audit in Q2:
- Are there underused or unused tools you’re still paying for?
- Are vendor fees duplicated across departments or currencies?
- Do your expense reports match bank feeds and statements?
- Is your accounting system flagging inconsistencies or mismatches?
Pro tip: A bi-annual expense clean-up improves margin visibility and reduces audit pain later. Build this into your Q2 finance routine, especially if you’re scaling fast.
Cash Flow Optimization: Profit ≠ Liquidity
Why it matters: Revenue may be up, but if cash isn’t hitting your account in time, your growth engine stalls. Many “profitable” startups fail due to cash flow gaps, often caused by cross-border transactions, payment delays, and foreign exchange risks.
What to audit in Q2:
- Are your receivables aging beyond 45 or 60 days?
- Do you have visibility into upcoming vendor payments?
- Are FX rate shifts impacting your international revenue or cost base?
- Are you leveraging automation for accounts receivable tracking?
Pro tip: Implement rolling 13-week cash flow forecasts and integrate foreign exchange (FX)- aware invoicing. Predictability matters more than profitability at this stage.
Tax & Compliance Check: Think Beyond the Fiscal Year
Why it matters: Startups operating across geographies can’t treat tax compliance as an annual event. Q2 is the ideal time to assess your compliance hygiene, particularly regarding import/export taxes, local filing deadlines, transfer pricing, and withholding taxes in foreign jurisdictions.
What to audit in Q2:
- Are you up to date on regional tax regulations?
- Have your international subsidiaries filed local returns correctly?
- Are there risks tied to intercompany transactions or IP ownership?
- Are your cross-border payrolls tax-compliant?
Pro tip: Use Q2 to engage a tax advisor familiar with your operating geographies. Pre-emptive audits prevent penalties and ensure clean cap tables in due diligence.
Hiring Plan vs. Financial Forecast Alignment
Why it matters: That 12-month hiring roadmap may look great in theory, but does your cash position support it? Many startups over-hire ahead of revenue, assuming future growth will catch up — and that’s a risky move, especially in a capital-tight environment.
What to audit in Q2:
- Are hiring plans synced with cash and revenue forecasts?
- Is there room for headcount expansion without increasing burn unsustainably?
- Have you factored in the total cost of employment (benefits, taxes, equity)?
- Are you measuring productivity against budgeted cost per team?
Pro tip: Re-forecast quarterly, not annually. Labor costs are one of your most significant cash outflows—don’t set it and forget it.
Outsourcing vs. In-House Finance: Time to Rebalance?
Why it matters: As complexity grows, your in-house team may not scale with it. But building a whole finance department early is costly. The answer? Smart outsourcing. From bookkeeping and reconciliation to board-ready financial reporting, outsourced finance teams can deliver CFO-level clarity without CFO-level costs.
What to audit in Q2:
- Are current finance tools and workflows scalable?
- Is your in-house team overloaded or underutilized?
- Are month-end closes consistently delayed?
- Are you getting strategic insight, or just compliance support?
Pro tip: Conduct a finance function audit: What’s core vs. non-core? Outsource reporting, revenue recognition, or consolidation to expert partners and keep strategic control in-house.
How KMK Can Help: At KMK, we work with founders, CFOs, and CPA firms to audit, fix, and reset their financial systems before they become year-end nightmares. From Bookkeeping automation to virtual CFO Support, from multi-currency consolidation to cash flow modelling, we deliver clarity where most teams see complexity.
Whether you need a financial clean-up service, a reliable reporting partner, or a full-stack outsourced accounting solution, we ensure your numbers align with your goals.
Read Also: From Startups to Scaling: How a Virtual CFO Helps Businesses Thrive
Conclusion: Financial Clarity = Growth Confidence
A clean Q2 can prevent a chaotic year-end. It’s the inflection point where proactive founders pull ahead, and reactive ones scramble. If you’re not reviewing your burn rate, multi-currency transactions, hiring plans, and cash flow health now, you’re already behind schedule. The businesses that scale sustainably don’t wait for a crisis to occur. They reset early, audit often, and act decisively.
At KMK, we make that possible – with real-time reporting, outsourced CFO services, and tools that go beyond basic bookkeeping. We don’t just reconcile your accounts; we reconcile your strategy with your numbers. So, your next decision is informed by insights, not guesswork or numbers in the air.
Book a free consultation now with KMK. Connect with us at info@kmkventures.com to schedule a complimentary 30-minute Financial Reset call with our leadership team.
Harshvardhan Kothari is a qualified Chartered Accountant from the Institute of Chartered Accountants of India (ICAI) with over five years of post-qualification experience in accounting, financial management, and compliance. He possesses in-depth expertise in U.S. accounting practices, with a strong focus on maintaining regulatory standards and ensuring fiscal transparency. Known for his meticulous attention to detail and results-oriented approach, Harshvardhan has successfully managed and overseen complex financial operations, driving efficiency and delivering measurable outcomes across various business functions. Outside of his professional role, Harshvardhan is an avid sports enthusiast who enjoys playing cricket and table tennis.
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