Summer reveals what January planning can’t – which goals survived contact with customers, cash flow, and capacity. A mid-year review helps turn these lessons into better decisions for the months ahead. Here are several areas to consider evaluating before the second half of the year begins.
Financial performance
Revenue and sales goals. Compare your year-to-date revenue against the goals you set at the beginning of the year. If you’re ahead or behind schedule, now is the time to adjust your expectations and strategy.
Profit margins. Revenue growth doesn’t always translate into profitability. Review margins across products and services to identify areas where rising costs may be reducing returns.
Cash flow health. Cash flow issues can develop even when sales are strong. Evaluate receivables, payables, and cash reserves to ensure your business remains financially flexible.
Employee and team performance
Staffing levels and workforce needs. Consider whether your current team has the capacity to support business goals through the rest of the year. Growth, turnover, or changing priorities may require adjustments.
Employee engagement and retention. Mid-year is a good opportunity to gauge morale and identify potential retention concerns. Simple conversations with employees can reveal issues before they become costly problems.
Training and development progress. Review the skills your team has gained so far this year and identify any gaps that could limit performance. Investing in employee development can improve both productivity and retention.
Customer experience and marketing
Customer satisfaction. Customer reviews, surveys, and support requests can provide valuable insights into the customer experience. Look for recurring themes that may require attention.
Customer retention and loyalty. Acquiring new customers is important, but retaining existing ones is often more profitable. Review repeat purchase rates and customer retention trends to understand long-term customer value.
Marketing effectiveness. Evaluate which marketing activities are generating results and which are falling short. Redirecting resources toward the most effective channels can improve return on investment.
Operations and productivity
Operational efficiency. Examine daily workflows to identify bottlenecks, redundancies, or unnecessary complexity. Small process improvements can create meaningful gains over time.
Technology and systems. Review the tools and systems your business relies on every day. Outdated software, manual processes, or underused technology may be limiting growth and efficiency.
Products and services
Product and service performance. Analyze which offerings are driving revenue, profitability, and customer interest. Mid-year is an ideal time to refine, expand, or retire products and services based on actual performance rather than assumptions.
A mid-year review doesn’t need to be complicated. By looking at the right areas now, your business can make practical adjustments, protect momentum, and enter the second half of the year with a clearer sense of where attention is needed most.
As always, should you have any questions or concerns regarding your tax situation please feel free to call.
If you are just starting a business or have been in one for a while, you quickly understand the importance of keeping good records. And as a financial person, having an owner that understands the basics of great bookkeeping makes it so much easier to help that owner understand what those books are telling him or her. So on that front, presented here are four keystone bookkeeping concepts that are worthy of discussion.
Selecting the proper accounting method. There are two different methods for recording transactions: cash-basis and accrual-basis. In general, the cash-basis method records a transaction when a payment is made or cash is received, while the accrual-basis method records the transaction upon delivery of the good or service, either as a sale or as a cost. Small businesses often use cash-basis as it is easier to track. Larger businesses who buy from vendors on account (accounts payable) generally use accrual-basis accounting. The key is to understand what method your business uses and whether it uses the same method for your books as it does on your tax return. The IRS allows the cash basis method for tax purposes for the majority of small business, but once a choice is made, it can only be changed with proper reporting to the IRS. Things to consider: How important is the matching principal to your business? This aligns revenue with related costs to get a clean picture of interim profitability. If this is important, accrual might be best. What about the importance of cash flow? If high, using cash basis will get you answers more quickly.
Create an account structure that fits the company. The main types of accounts in a business are assets, liabilities, equity, income, cost of goods sold, and other expenses. Each group will often have numerous accounts and sub-accounts associated with them. Having the right mix of accounts, created and grouped in an organized fashion, will help you properly classify transactions and prepare usable financial statements. Things to consider: If there is little activity in an account, consider summarizing it with other like items. Know why you need an account before you create it…to make business decisions? to compare to last year? for tax reasons?
Enter accurate and timely transactions. The value your data provides is dependent on each transaction being recorded correctly and on time. Entering transactions in the wrong account can cause major issues down the road. Financial reporting that is delayed can hide problems that need immediate attention. Some transactions are relatively straightforward, and some are more complex (like payroll, accruals, and deferrals).Things to consider: Conduct a flash report the first day of each month. This will get the ball rolling.
Establish financial statements for decision-making. The purpose of your statements should be to help you run your business and make decisions. For the bank, it’s to see if you are a great risk to lend money. To the government, it’s to pay taxes. Or for the prospective buyer, to value your company’s worth. Things to consider: Really understand the three key financial statements (income statement, balance sheet, and statement of cash flows). Know how they inter-relate and understand how to read them to make better decisions. What key accounts are the drivers of your business? What is the bank looking at?
If properly executed, your bookkeeping system will create accurate financial statements that can be used to make key financial decisions. Feel free to call with any questions or to discuss bookkeeping solutions for your business.
