Congrats—you’ve made it halfway through the year! And for a small business owner, that’s no small feat. From juggling action items, to goal setting, to running the register, you’ve worked hard to keep everything afloat. But when was the last time you took a step back to look at the big picture?
Mid-year is a perfect time to slow down and take stock of the financial health of your business. We get it, when faced with a never-ending to-do list, a mid-year business financial review can be tempting to skip. However, this intentional strategy pays dividends for your peace of mind, growth, and profits. If you’re wondering if you should conduct a mid-year business review, the answer is yes.
What is A Mid-Year Business Review and Why is it Important?
A mid-year business financial review is just what it sounds like: a time to review your yearly goals and track your progress. This structured audit takes into consideration your past, present, and future. You’ll reflect on the year’s performance thus far, take stock of where you are, and make any necessary adjustments to hit your future targets.
Despite the endless tasks involved in making a small business profitable, running around with your hair on fire isn’t a successful business strategy. Mid-year business financial reviews are strategic tools that allow you to zoom out, track your progress, and fine-tune your approach to reaching your goals. Mid-year is the perfect time—you have enough data to make informed adjustments and enough time to implement them and reap the benefits.
How to Conduct a Mid-Year Business Review
To make the most of the time you’ve set aside, there are a couple of non-negotiable elements to include in your business review:
- Track progress toward business goals: Start by reviewing the goals you set in January. Then, take a look at your key performance indicators to measure how you are trending. Consider which goals you’ve accomplished so far, which benchmarks you’ve hit and which you’ve missed, and even whether or not your goals are still relevant.
- Acknowledge what’s working: This is the time to celebrate your success! Spend time cataloguing what decisions and strategies are working. Whether it’s a great new hire, a trusty operational system, or an effective marketing plan, knowing what works is just as important as knowing what doesn’t so you can direct your time and energy effectively.
- Review cash flow, expenses, and budget: Getting clear about your financial position is at the heart of any mid-year business review. This goes much deeper than what you made last month or even a simple profit/loss statement. Investigate whether your expenses are rising faster than your revenue. Evaluate your budget—were there unexpected changes that you need to adjust for? Consider if your current rates are serving your goals, maybe it’s time to increase!
- Look at tax payments and planning: This is an often-overlooked step but one that is critical to your financial health. Failing to plan for tax time dramatically increases risk for unpleasant surprises when the tax bill is due. Work with your accountant to review your financial position and any tax payments you’ve already made. Then create an updated projection of your tax liability so you have a clear understanding of what you will likely owe when your financial year comes to a close.
- Adjust your strategies: Now that you’ve review your goals, successes, financial position, and tax planning, it’s time to make any remaining strategic adjustments. Take stock of each area: operations, marketing, accounting, personnel to ensure your day-to-day tasks are aligned with your goals.
How Can an Accountant Help?
Working with an accountant takes the guesswork out of financial reviews. Here’s how:
- They can provide a financial report that covers profitability, cashflow, and your year-to-date performance so you know exactly where you stand.
- They’re also masters of compliance and will ensure that you’re up-to-date on any regulations that pertain to your business.
- Anticipating any major financial decisions? They can help with that too through a proven mix of insight and guidance.
- And of course, they can help you understand your tax position and recommend strategies that will help you save at tax time.
In short, engaging an accountant can dramatically improve the accuracy and efficiency of your mid-year business review. If you’re a Roanoke small business owner, Neely’s Accounting is ready to help. At our modern office, we pride ourselves on offering big-city service with hometown values. And because we’re local, our accounting experts are always just a phone call away.
Ready to set yourself up for success this year? Contact us to learn more about our small business services and learn more about how we can help you reach your goals.