What is the worst thing you can do when it comes to taxes? If you said “not pay them”, you are correct. The second worst thing (ok we’ll try not to get super dramatic) would be to miss calculate them or lose out on filing correctly due to mis-steps along the way. That is why it’s a good idea to set up a mid-year accounting checkup. In this post we will cover just a few of the benefits of setting up your mid-year check up.
Ensure bookkeeping is in order
A mid-year check up can bring a lot of value to your business when looking to the future. But it also can really help look at your past and make sure your bookkeeping is in order. Doing this at the halfway point of the year will help you understand whether your bookkeeping records are in good order, or identify issues and make corrections.
Many businesses are turning to platforms such as Quickbooks (to just name one great resource) for helping to stay on top of their bookkeeping. By implementing accounting software such as Quickbooks, managing bookkeeping can be less cumbersome. Regardless of the platform, checking in with an accountant or tax professional can help identify any possible bookkeeping errors- and help fix/course correct. This saves time later in figuring out where finances went wrong.
To compare growth
Comparing growth from one quarter to the next is another benefit of a mid year checkup. By using intern statements generated for the first 6 months to compare against last year will help you determine if you are growing in revenue. You can then check if profits are growing or if they are decreasing. If the profits are stagnant or decreasing, a check up will help figure out why and course correct the issues.
A tax professional or accountant can help you look at possible categories or focal points and try to strategize with you ways to help increase the revenue or at least decrease the ways you may be bleeding profits.
To assess financial performance
Financial performance if a key metric to any business success and evaluating how well your business is doing at the mid way mark of a year is a wise idea. It’s a good move to conduct an actual vs budget analysis to help determine where you’re over or under in not only spending but in revenue.
But we don’t stop there- it’s wise to then make some other projections to see if those issues can be course corrected or sustained through years end. Assessing performance is not just for a rear view look, it’s also a forecast for the future.
To make tweaks
Knowing the benefits of financial projections and possible issues with where your headed coming into the second part of the year, it may be wise to consult and find tweaks to your business strategy.
The benefit of a mid-year evaluation is implementing the necessary adjustments and tweaks in real time. It may be the time to boost marketing efforts, advertising channels, increasing social media, hiring staff, or even refreshing inventory. All these tweaks can be better handled when you know not only where you have been but where you plan on going the rest of the year.
Identifying improvements is a good idea for any business at any point in the year. At the halfway point of the year, if you can identify one process area to improve – from marketing practices to inventory storage costs to payroll efficiencies and more – you could really boost the strength of the remaining year. Even a consultation of a few hours with an expert can result in tremendous improvements to your business operations and bottom line.
Strategy is key to business success. Strategizing however doesn’t have to be a one time thing. Before tax time, meeting with your tax professional is ideal to discuss strategies that can benefit your business’s bottom line in this current year, in preparation for ensuring that you’re current on all plans for next year.
For instance, your tax professional can advise you about the pros and cons of making a business purchase, and help to ensure that your income statements and other financials present a strong story when you’re ready to apply for financing for said purchase. All in all strategizing is a major gain in getting ahead.
Choosing to plan a mid-year business check up is a wise choice for any size business. It can be a simple process, and with the right help, such as PKJ Consulting, it can really set your business up for a strong finish to the year. To learn more or get started with your own business check up, check us out HERE and see what we can do for you.