It’s summertime and the livin’ is easy, which makes it easy for small business owners to overlook their mid-year financial review. Do yourself a favor and schedule an appointment with an accountant before you take off for vacation. Assuming your business’ fiscal year is the standard calendar year, now is the best time to analyze your overarching progress, ensure you’re on track for projected earnings, and course-correct if something isn’t working.
Keep your mid-year financial review simple by focusing on these four things:
Taxes All business taxes are anything but simple, especially for new entrepreneurs who may not have projected income to estimate from and are still understanding their tax obligations. How much should you set aside? How much could you stand to owe? Even if you’ve been operating for years with predictable earnings, a mid-year review is a good habit to ensure your estimated tax payments are in line with projected income.
Cycle financial planning It’s our job as accountants to help you identify and manage the financial needs and challenges that arise for your business at different times. When are your busy and slow seasons? How can you leverage your financial ebb and flow to your benefit? For example, maybe next year you’ll take your vacation in the fall because it’s slower than summertime and you won’t have to disrupt steadily flowing income.
Creating different bank accounts As a Profit First-certified accounting firm, we’re big on small business owners creating five key bank accounts for fund allocation. These accounts streamline processes and answer important mid-year questions like if you’re setting enough money aside for estimated taxes. This blog provides a full run-down of these five key accounts.
Expanding/new hires Mid-year is a great time to consider if you need more support in the form of employees. If you can’t afford to put someone on payroll, a less expensive and very rewarding option is to hire an intern. This could be an unpaid opportunity, or they could receive a quarterly or yearly stipend. The start of a new school year is right around the corner, making now the time to seek viable candidates.
Only 5% of small businesses achieve all their yearly goals. Whatever 12-month period your business uses for accounting purposes, a mid-year financial review is not something you want to skip. Learn more about how our experts can help your business thrive!