Congratulations, you finally submitted the yearly financial report and managed to complete the Stock-Based Compensation expense report. This small but significant section in your overall report might take way too much time and effort than you initially intended to.
Now for the bad news: if you didn’t follow one simple principle, this pesky SBC report will come back next year to take a chunk of your attention again. Luckily enough, we are here to explain exactly how to avoid reworking the SBC report once and for all.
Before we start,
just remember you can always contact us to receive a free, easy-to-use equity management tool, automated Cap Table, and the creation of cost-effective reports such as the 409A, SBC, and more.
Without further ado, let’s understand why the SBC report is a recurring Sisyphean task and how to easily avoid complicating it. As you might know, to begin working on your stock-based compensation report a well-updated cap table is required. Some companies haven't reverted to an automated cap table yet, and still believe that a spreadsheet is the only way to go.
Here is exactly where the problem occurred, building your entire cap table on an Excell and other spreadsheet platforms, relying on an actual person to fill them out, or withdrawing any information required. That is why creating an SBC report might take a long time and effort, it is based on information that isn't being updated automatically and therefore will need a hard adjustment when the time comes. The plot thickens when a company is trying to look at its history and understand what happened to stock options that were in former employees' hands and became vested. The spreadsheet fails to hold past information so after hundreds of recruits and leaves, knowing what is the current unallocated options pool is merely impossible.
Furthermore, some information such as any stock owners’ special rights or obligations won't show in the cap table at its spreadsheet version, so a deep dig into all of the old contracts will be required again and again every year. Small companies tend to outsource this process exactly for this reason, but if the outsourced company is working on a spreadsheet this process will still hunt the founder every year.
It’s time to imagine the best solution to this hard-to-swallow pill, think of a SaaS solution that can be addressed 24/7, it will include a smart automated cap table that will follow you as you go. When you will need to address the SBC expense report, all you will have to do is click a button, and receive it, defensible, audit-ready, within a few days and without any hustle. How to make this dream even more dreamy? Let’s imagine this cap table management tool is free, oh, by the way, it’s no dream or an imagination – That’s Altshare, a game-changer when it comes to seamlessly generating equity-based reports such as SBC Expense reports, 409A’s reports, and many others. The uniquely automated cap table only needs you to input any information once, then it will keep track and adjustments for a lifetime. Then, when the time comes to create these difficult-to-produce reports, it happens quickly and without any hustle.
No different than any other industry, this one is also made of early and late adopters. When it comes to technological adaptation, the early birds will definitely get the worm, as they will enjoy a step up that might take them far ahead from their competition.
It’s alright, some people still make calls with an old Nokia, but we all know what they are missing. Startup founders understand what others might haven't figured out yet: adapting to the new, groundbreaking technology is not merely one step for man, it’s a giant leap for mankind.
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