The Mid-Year Business Financial Checkup: What to Review Now

A mid-year financial checkup is a great way to assess your business’s financial health, identify potential issues, and make necessary adjustments before year-end. Use this checklist to review key areas of your business finances and ensure you’re on track for success.

Review Your Financial Statements

• Profit and Loss Statement: Check revenue, expenses, and net profit trends compared to the previous year.
• Balance Sheet: Evaluate assets, liabilities, and equity to assess financial stability.
• Cash Flow Statement: Ensure you have a healthy cash flow to cover operational costs and upcoming expenses.

Assess Your Budget vs. Actual Performance

• Compare your actual income and expenses against your budget.
• Identify any major discrepancies and adjust your budget for the second half of the year.

Reconcile Bank and Credit Card Statements

• Ensure all transactions are recorded correctly in your accounting system.
• Investigate and resolve any discrepancies or unauthorized charges.

Review Accounts Receivable and Payable

• Follow up on overdue invoices to maintain a healthy cash flow.
• Assess outstanding bills and ensure timely payments to avoid penalties or late fees.

Evaluate Tax Payments and Compliance

• Ensure all estimated tax payments are up to date.
• Verify payroll tax filings and sales tax payments are accurate and submitted on time.
• Check for any upcoming tax deductions or credits that can reduce your tax liability.

Analyze Payroll and Employee Expenses

• Review payroll processing for accuracy.
• Ensure employee benefits and tax withholdings are properly accounted for.
• Assess overtime, bonuses, and other compensation expenses.

Audit Business Expenses and Cut Unnecessary Costs

• Identify non-essential expenses that can be reduced or eliminated.
• Look for opportunities to negotiate better rates with vendors.
• Assess the ROI on recurring software subscriptions and other services.

Check Business Debt and Interest Rates

• Review loan balances and ensure timely payments.
• Consider refinancing high-interest debt to reduce costs.
• Plan for future financing needs if growth or expansion is anticipated.

Evaluate Pricing and Profit Margins

• Analyze whether your pricing structure is competitive and profitable.
• Adjust product or service pricing as needed to maintain healthy margins.
• Consider customer feedback and market trends when making pricing decisions.

Assess Business Growth and Strategy

• Evaluate year-to-date growth compared to business goals.
• Identify new revenue opportunities or expansion plans.
• Adjust marketing and sales strategies based on current performance.

Review Your Technology and Accounting Processes

• Ensure your accounting software and financial tools are up to date.
• Automate repetitive tasks to improve efficiency.
• Consider outsourcing bookkeeping or financial tasks if necessary.

Plan for the Rest of the Year

• Set financial goals for the next six months.
• Create a strategy to address any financial weaknesses identified.
• Schedule another financial review before year-end to stay on track.

Taking the time to review your finances mid-year allows you to catch potential problems early and make informed decisions for the remainder of the year. Need help conducting your financial checkup? A professional accountant or bookkeeper can provide insights and strategies tailored to your business’s needs.