Many small business owners perform reviews at the start or end of the year.
However, checking your progress halfway through your fiscal year may help you notice and resolve problems within your systems, processes, or products. A mid-year review allows you to take advantage of potential opportunities and ensure that your business is where it needs to be in order to meet year-end goals.
In actuality, now is the best time to conduct a mid-year check-in to assess your current situation and build on your strengths, while resolving weak points. Today your McAllen virtual CFO at Abigail Y. Murray CPA, LLC, is here to help you understand how to perform a mid-year review on your business’ finances.
Determine Your Goals
It’s easy for a small business owner to get caught up in the daily functions of their business and lose sight of the bigger picture. Going over your annual targets every six months lets you see where you actually are versus where you planned to be.
Unfortunately, because of COVID-19, circumstances have changed so dramatically that the objectives you set at the beginning of your fiscal year may no longer be feasible. Instead of waiting until the end of the year, celebrate your team’s achievements to date, reprioritize your goals, and focus on how to accomplish them.
Run the Numbers
Reviewing your business’ finances is crucial in order to determine where you stand and what is necessary for you to stay or get back on track. Check year-to-date sales figures against projections, review income and expenses, and figure out where to make adjustments.
Organizing your finances midway through the year will not only help you manage your budget and cash flow over the next six months, but will also simplify year-end tax preparation and ensure that you are maximizing small business deductions
Evaluate Products and Services
When performing a mid-year review, take time to verify your products or services with attention towards where you can add value to current customers and how you can bring in new ones. Focus on your company’s strengths and how you can leverage them to gain revenue.
Consider whether or not it’s time to get rid of products that are underperforming or service lines that aren’t contributing to your target. Enhance any obvious weaknesses or shift gears to help prevent a negative outcome on year-end results.
Consider Your Customers
It’s important to take stock of your customer relationships on an ongoing basis and address issues as soon as they arise. Reach out to satisfied customers or clients via surveys to help better understand how you can potentially improve the quality of your brand and your service.
Be sure to acknowledge the feedback you receive, and incorporate it into your customer service strategy. If clients have outstanding orders or unresolved complaints, handle the situation immediately. Even the most loyal customers will lose faith in businesses if they fail to deliver on what they promise.
Review Your Insurance Policies
Getting the right kind and amount of insurance to protect your organization and employees will help you avoid gaps in coverage when it is most needed. It’s in your best interest to go over your policies regularly to ensure that your coverage will continue to protect your assets.
Remember that your business can change over time, so, if you moved to a new building, raised revenue, hired new employees, or added services or products, it’s possible that your policies do not fully cover you. Consult with your insurance agent to determine whether you need an update.
A mid-year check-in can help you identify and resolve problems that have come about in the past six months, as well as put your small business in a better position for optimal performance the rest of the year.
Meet With Your Accountant
A good accountant can save you money and be a valuable resource when it comes to making critical decisions that can affect both your short and long-term goals. It is wise to meet with your accountant to review your current tax reporting and discuss any necessary changes.
Many small businesses pay estimated quarterly taxes mid-month, and it’s vital to determine if your revenue has increased since your initial projections, as this can influence your tax liability. To avoid incurring underpayment penalties, invest the time in reexamining your calculations and making any essential adjustments.
Your CPA can also identify opportunities to help you reduce taxes between now and the end of the year. These include deferring income, pre-paying expenses that may be deducted from your business income, and jumping on deductions including purchasing eligible business equipment.
Abigail Y. Murray CPA, LLC: Certified Public Accountant and VCFO Available to Help Your Small Business’ Finances
If you find yourself at mid-year without an accounting professional, virtual CFO, or without the data to proceed with your financial goals, choosing a qualified accountant should be a top priority. Your financial future depends on it!
You can rest assured knowing our McAllen VCFO is here for you. When you consult with Abigail Y. Murray CPA, LLC, we can help you find a way to get your business finances on track amidst the financial insecurity companies are currently facing.