079 Mastering the Mid-Year Review for Your Small Business
linktree.com/AllEaseAccounting
In this episode, we’re diving deep into the process of conducting a mid-year review for your small business. While most people set their resolutions in January, it's essential to regularly check in on your progress and make necessary adjustments. I’ll guide you through my proven method for mid-year reviews, which I use with all my bookkeeping clients after completing their June bookkeeping.
_________________________________
Sponsored by: The Bookkeeping Foundation Kit – Your essentials for setting up and managing your bookkeeping effectively. Click here to grab the Kit for $77.
Access the Mind the Gap Community here.
Download my free receipt organization guide here:
Book a consultation with me to learn which of my offers is right for you 👇🏻
00:00:00
Welcome to another episode of money. Through ease. I'm your host, Regan Bashara. I'm your numbers witch and a small business bookkeeper. I'm also an advanced certified QuickBooks Online Pro advisor. And here we are learning how to do our bookkeeping the right way. I've been doing bookkeeping and public accounting for 10 years now.
00:00:20
And today's episode, the topic is all about doing a mid year review.
00:00:25
And setting a mid year resolution, this episode is going to be split into two parts, so make sure you check back in next week for Part 2 of this episode where I talk about what I think you should set as a mid year resolution. Most people set their resolutions or their goals in January, but business owners need to be looking at their reports.
00:00:45
All the time throughout the year and adjusting as needed.
00:00:49
Before we get.
00:00:50
Started I want to let you know that this episode is sponsored by the Bookkeeping Foundation kit. This kit contains the essentials you need to set up your bookkeeping and do it the right.
00:01:01
I've packed my 10 years experience doing bookkeeping and public accounting into this quick digital course. Get your bookkeeping foundation kit by visiting the link in the show notes this week. We're talking about mid year resolutions and reviews, and it is June, almost July when this episode comes out.
00:01:21
And in July, I will be doing June's bookkeeping for all of my monthlies.
00:01:26
Now, if you've been following me for a while, you know that reconciliation is the most important part, probably of doing your bookkeeping, because that is where we check our numbers. That's where we check our data for accuracy is on reconciliation. And if you already know my three-step system for bookkeeping, you already know.
00:01:45
The reconciliation is important and that you need to do it every month because that's how often your bank statement comes out. So in July I will be doing my clients June bookkeeping because we have to wait until the next month for the bank statement to.
00:02:00
So in July is when I sit down and do this mid year review and check in for my bookkeeping clients and I'm going to tell you exactly what we do and how you can do this for your own business. So First off, we start with reconciling June's bookkeeping. We already know reconciling is an important part of the bookkeeping.
00:02:21
Process as part of my three-step bookkeeping system that you can learn about inside the bookkeeping foundation.
00:02:26
It and then we're going to look at your year to date transactions and reports. This is really where we dive into exactly what happened in your bookkeeping transaction by transaction, line by line. I usually look at every single category in my clients bookkeeping to see what transactions are in there.
00:02:47
And this is where I find that maybe something had a bank rule set up in QuickBooks Online and so it's been misclassified for the first half of the year. And I just didn't catch it on any of my other monthly bookkeeping review. Then maybe your review is really important.
00:03:02
To get an idea of how things have been classified overtime and whether or not you want to keep those classifications in those categories for your transactions and the more data we have, the better off we're going to be when it comes to our financial reports, you probably already know that a good science experiment is going to have.
00:03:23
A lot of data. You cannot do a science experiment and have only one subject that you are collecting data from, and the more subjects you have, or the larger your sample size, the better you're going to be at drawing conclusions from that data.
00:03:39
So when we do a media review, we are looking at six months of transactions and data in your bookkeeping and we look at the financial reports to see what is going on. Have you had any big purchases yet this year that we need to look at together? Are there trends and patterns that you're starting to notice that you don't really like and you want to change?
00:04:01
All of this information can be found in your bookkeeping financial reports. Another thing that we do is to verify your employee and subcontractor information.
00:04:12
Every year in January, when we are processing and sending out 1090 nines to subcontractors, and that information is as accurate as possible. So during the year, I'd like to check in with my clients and make sure to have their employees filled out a W4 for this year.
00:04:30
Have their subcontractors turned in their W Nines because if an employee moves during the year or they have a big life event like they got married or they had a child and so now they have a dependent.
00:04:42
To claim on their taxes. Those are big changes that happen all the time, but we need to keep up with that information in your bookkeeping to verify that it's as accurate as possible, and then this makes filing all of those forms in January super easy and stress free. So I will usually check in with my clients and ask them.
00:05:03
And you know, mention it to your employees, or I'll point out whether or not we have subcontractor W9 information in their QuickBooks account, and I'll say, can you reach out to the subcontractor and get their W 9 from them? That is a super easy thing to do. It takes maybe 30 minutes to sort through that information and make sure that it's all.
00:05:23
Verified another thing that that I've personally do and that I will pull up with them is check out their cash flow report or their statement of cash flows. So if you're a monthly bookkeeping client of mine, you probably know that if you pay on a six month plan, meaning you pay for six months of bookkeeping and.
00:05:43
Plants that you get 2 free consultations with me every year, one of those consultations we normally schedule in the summer. So around this time and we're doing this mid year review and analysis and check in together on that consultation and then most of the time we schedule the next consultation.
00:06:03
Sometime in October or November, right before the end of the year, just to make sure that everything's ready to go for them to file their taxes on time.
00:06:11
Time. So if we do that check in with each other, if we do that consultation in the middle of the year, I will pull up their cash flow report because if they have a goal for their business like a revenue goal or maybe they have a goal to expand their workforce and hire more employees, we look at the statement of cash flows report to see how money.
00:06:31
Flowing through their business, this report gives us a lot more information than just their profit and loss statement or their balance sheet.
00:06:39
And so by looking at that, we can determine whether or not their revenue goals are being met, what their progress is for their goals. Do anything, does anything need to change about their goals or the way they run their?
00:06:52
That report gives us so much information and I want to make sure that my clients look at it on a regular basis. Speaking of looking at your goals for the year, they're mid year review is a great time to do that. If you don't know already, you can't just set a goal and then not track it and then never think about it again. Never check in on the progress of it and just wait.
00:07:12
For you to hit your goal, that is not how goals work.
00:07:15
A goal is something that you track and that you have to keep up with the progress of. So in the mid year review, if my client has indicated to me that they set a goal for this year, that's when I sit down with them or I point out the progress towards the goal. You know mentioned like hey, you set a revenue goal for this much money this year.
00:07:35
And here's how far along we are on that. Do you need to change something up? What strategies have you implemented in your business this year that?
00:07:44
Are supposed to be getting you towards your goal and are they working? Do you need to change it right? Because the middle of the year is a great time to sit down and have a good chunk of data the first six months of the year of data to look at and see if you're on your way to meeting your goals and then you can analyze your progress and make changes as needed.
00:08:04
Or you can just completely scratch your goal and say never mind. I don't want to have that goal anymore. It wasn't realistic to begin with, and then you set a new goal.
00:08:13
So this is the last step of this process, which is to adjust your goals or to establish new ones for the remainder of the year. So starting with July, you have six months left in the year to get your **** together.
00:08:26
Right.
00:08:28
And this is a great time to look at what's been going on in your business and make any change.
00:08:34
Changes that you feel are necessary for the remainder of the year. It's also a great time to talk about estimated tax payments, which a lot of people have questions about. Understandably, if you're running a business, you probably know that you might need to make estimated tax payments, and I want to let you know that inside the mind, the gap.
00:08:54
Community this month. That is what our lesson content is about is estimated tax.
00:09:00
If you're not already a member of the community, the monthly subscription is only $7.00 a month, and you can cancel at any time. So check the link in the show notes to get that monthly subscription to the mine. The gap community. So this was part one of your mid year resolutions and mid year reviews for your bookkeeping.
00:09:20
And next week we are coming back to revisit this topic for Part 2 and I'm going to share with you.
00:09:24
So what my mid year resolution is, and I'm going to suggest a mid year resolution for you, especially if you're a QuickBooks Online user and I already have some information that will be available to you about making that resolution happen for your business. Getting yourself ready for the end of the year, getting yourself ready for taxes because.
00:09:45
It is going to be here faster than you think. I always say that no one ever believes me, but it's true. It comes faster than you think. So thank you so much for listening to this episode. If you learn something new, please respond to any e-mail that you see for me and let me know what you learned.
00:10:01
And if you want to get more in depth tutorials and support from me, remember to join the mind the gap community. This is a private virtual space for my clients. We're working on doing our bookkeeping right together and you can join the community for only $7.00 a month to receive more resources, check-ins, reminders from me and.
00:10:21
Even tutorials for QuickBooks Online. So head to the link in the show notes now to get subscribe. Thanks again for listening and I will see you next week. Bye.